Looking at the United States of America by the numbers

By James Shott

As the end of 2012 draws near, here are some interesting and revealing statistics about our country.

The Gross Domestic Product Growth Rate has been anemic all year, but had its biggest increase in the 3rd quarter, rising 2.7 percent. That was double the 2nd quarter’s 1.3 percent, and beat the 1st quarter’s 1.9 percent. From 1947 until 2012, the United States GDP Growth Rate averaged 3.2 percent.

* * *

In 2011 the population of the U.S. was 313.8 million and 153.6 million Americans were in the labor force. The nation produced total GDP of $15.1 trillion, roughly $49,000 in per capita GDP.

The U.S. Treasury collected tax revenue of a little more than $2.3 trillion and as a percent of GDP the economy is taxed at slightly more than 15 percent. However, the federal government spent about $3.8 trillion, creating a budget deficit of more than $1.3 trillion, or 8.63 percent of GDP. Each man woman and child citizen’s share of the cost of government is more than $12,000.

Currently, the national debt is roughly $16.3 trillion, which works out to about $51,000 per man, woman and child. This year’s federal budget deficit adds $3,500 or so of additional debt per citizen.

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The November jobs report listed 146,000 new jobs and a U-3 Unemployment Rate of 7.7 percent, two-tenths lower than the October figure. Unfortunately, this news is not as good as it appears. To have a truly meaningful effect on unemployment, more than 300,000 new jobs must be created each month. The Labor Department revised downward new job numbers in October from 171,000 to 138,000, and from September in 148,000 to 132,000.

The drop in the unemployment rate resulted not from lots of people going back to work, but because 350,000 people dropped out of the workforce.

The Labor Force Participation Rate dropped from 63.8 percent to 63.6 percent. The 146,000 new jobs have a much greater effect on a smaller labor force than on a larger labor force. If the labor force remained the same as it was in January 2009, U-3 unemployment would be 10.7 percent. The more accurate U-6 Unemployment Rate, which includes not only those working and those looking for work, but also those who have become discouraged and given up looking for jobs, is 14.6 percent for November.

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In June, a total of 142,415,000 people were employed in the U.S, according to the Bureau of Labor Statistics, including 19,938,000 who were employed by federal, state and local governments. By November, the total number of people employed had climbed to 143,262,000, an overall increase of 847,000 in the six months since June. In the same six-month period the number of people employed by government increased by 621,000 to 20,559,000. These 621,000 new government jobs equal 73.3 percent of the 847,000 new jobs created overall.

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Back in July of 2008 candidate Barack Obama said this about the $4 trillion in debt that we incurred under the Bush administration: “The problem is, is that the way Bush has done it over the last eight years is to take out a credit card from the Bank of China in the name of our children, driving up our national debt from $5 trillion for the first 42 presidents – #43 added $4 trillion by his lonesome, so that we now have over $9 trillion of debt that we are going to have to pay back — $30,000 for every man, woman and child. That’s irresponsible. It’s unpatriotic.”

According to the U.S. Treasury, on July 2, 2001, the national debt was approximately $5.7 trillion. On inauguration day 2009, the national debt stood at $10.6 trillion. Last Thursday, it stood at $16.3 trillion. That means the debt has increased $5.7 trillion during Mr. Obama’s first four years, and that is more than all presidents through Bill Clinton, and the first five months of George W. Bush’s tenure. In the name of U.S. taxpayers Mr. Obama has borrowed more than $49,500 per man, woman and child.

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Inflation in October was 2.2 percent, up from September at 2.0 percent, August at 1.7 percent and July at 1.4 percent. The highest level of inflation since 2000 was 5.6 percent in July of 2008.

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Are we drowning in regulations? Ayn Rand’s classic Atlas Shrugged in paperback has 1,088 pages. The 2011 Federal Register totals 82,419 pages, nearly 76 times more than Ms. Rand’s book. A popular estimate of the cost of regulations on the economy is $1.75 trillion annually, which is nearly 76 percent of total amount of tax revenue collected last year.

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In 1913 the U.S. tax code was 400 pages. Today, it’s more than 73,000 pages, which means we added on average 730 new pages each year. It is estimated that U.S. taxpayers pay $431.1 billion annually, or 19 percent of total tax revenue collected last year, just to comply with and administer the U.S. tax system.

Cross-posted from Observations

Tax-and-spend policies have not and cannot solve America’s problems

By James Shott

British millionaires are looking for greener pastures. As reported in The Telegraph of London, “In the 2009-10 tax year, more than 16,000 people declared an annual income of more than £1 million to HM Revenue and Customs,” but that “number fell to just 6,000 after Gordon Brown introduced the new 50 [percent] top rate of income tax shortly before the last general election.” The story goes on to say that it “is believed that rich Britons moved abroad or took steps to avoid paying the new levy by reducing their taxable incomes.” Consequently, the increase in tax revenues Prime Minister Brown had anticipated turned into a nearly £7 billion loss.

This should serve as a cautionary tale for America’s tax-and-spenders in the White House and Congress, who want to raise taxes on “the wealthy,” but it likely will float past them un-heeded. When you consider the details of the first post-election offer from the White House, it is clear that the administration does not comprehend such economic realities. The proposal: $1.6 trillion in higher taxes over 10 years, $180 billion in new spending and vague promises to cut only the growth of entitlement spending at an indeterminate future date, all while giving the president the power to unilaterally raise the debt ceiling.

The proposal calls for double the pre-election tax amount, additional spending and no specific amount of spending cuts or dates certain for them to take effect. And, there’s that last item, which gets immediately crossed-off: it’s unconstitutional.

As idiotic as that proposal is, understand that President Barack Obama appears serious about it.

Big government liberals live on entitlement spending, and many would die without it. The president’s proposal includes allowing the Bush tax cuts to expire for those making $250,000 a year or more, raising the top rate to nearly 40 percent, which he supposes will raise $80 billion annually. That’s enough to run the federal government for only 8.5 days. If America’s high earners follow the lead of the Brits and reduce taxable income or shift it into 2012, it will be even less than that relatively small amount.

But what is worse, when you understand that half of those affected by this rate increase are small businesses, it makes no sense to raise taxes on them with unemployment still more than 50 percent above normal levels nearly 42 months after the recession ended.

The tax-and-spenders need to get past their resentment of high earners and their appetite for their earnings, and get serious about fiscal reform. Out-of-control spending for entitlements, a bloated and inefficient government, a tax code that plays favorites, and other factors combine to produce huge annual deficits and 16 trillion in crushing debt, and it’s time to fix that.

Americans for Tax Reform has focused for years on getting newly elected U.S. Representatives and Senators to take a pledge against raising taxes, understanding that our problem is that we spend far too much, not that anyone needs higher tax rates. Grover Norquist, its president, is now a target of the tax-and-spenders for his organization’s efforts at controlling taxation. However, those Senators and Representatives didn’t make the pledge to Mr. Norquist, they pledged to their constituents they would vote against tax increases.

The problem we have today is not a new one. A Cary Orr political cartoon from 1934, in the midst of The Great Depression, shows a wagon filled with drunken people drinking from a “Power” bottle and shoveling bags of money out onto the road. On the back of the wagon is a sign reading, “Depleting the resources of the soundest government in the world.” And there’s a man on the side of the road painting a sign which says:

Plan of Action for U.S.

Spend! Spend! Spend!

Under the guise of recovery

Bust the government

Blame the capitalists for the failure

Junk the Constitution and declare a dictatorship

Other comments jotted around the scene say, “How red the sunrise is getting” near an ominous looking man labeled “Stalin,” and, “It worked in Russia.”

That is how Cary Orr saw what the government was doing then. And what is unsettling about this cartoon is the striking similarity to what is happening now.

He believed government’s actions were communistic. What our government is doing today may not be socialistic or communistic under the strict definition of those terms But an interesting coincidence is that the Communist Party USA is now organizing teleconferences and rallies supporting the plans to raise taxes and encouraging continued over-spending on entitlement programs.

We should recognize that no nation on Earth has ever achieved success that even approaches the level of success the United States of America achieved before it began changing from the capitalistic model that built it to a model that has produced mediocrity and fiscal peril worldwide.

We should heed the lessons of wrong-headed government policies that extended the Great Depression for years longer than it should have lasted, and try something different, like the economic principles of capitalism that built America.

Cross-posted from Observations

Items in the news: Three examples of labor unions behaving badly

By James H. Shott

Private sector labor unions have all-time low membership, which results from the fact that workers see a relatively low value in belonging to a union. Despite the lack of necessity for their continued efforts on the part of employees, unions nevertheless continue interceding to “improve” conditions that are already good enough for the vast majority of workers, a condition which threatens the continued existence of unions and thus threatens their leaders’ political influence and high pay levels.

The total compensation of some labor leaders places them firmly among President Barack Obama’s 1 percent of people making more than the $250,000 threshold that he believes should pay higher taxes, such as: AFL-CIO President Richard Trumka – $293,750; United Food and Commercial Workers President Joseph Hansen – $361,124; National Education Association President Dennis Van Roekel – $460,060; and American Federation of State, County & Municipal Employees President Gerald McEntee – $512,489.

In our still mostly-free country, if workers want to join a union they certainly may do so. But when you look closely, you see much union activity that does more harm than good, except for the relatively few workers that gain excessive benefits that hurt the businesses they work for and, of course, union leadership and the politicians with whom they are incestuously involved.

In one example from Thanksgiving week, the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union was a party in a dispute that resulted in the closing of Hostess Brands, an 85 year-old company that made Wonder Bread, Twinkies, and 28 other products.

The company had 372 separate bargaining contracts for workers, 42 multiemployer pension plans, 5,500 separate delivery routes and a vast production system.

Hostess has had financial problems for several years and had previously gotten concessions from the 12 different unions that represent its workers, but in this last round the Bakery Workers, which represents about 5,000 employees, refused concessions, even after management said if concessions were not accepted, the company would shut down.

The union claims that vulture capitalists sucked out hundreds of millions of dollars by leveraging up the company, and that management had given itself millions in pay raises while demanding worker cuts.

Actually, Ripplewood Holdings injected $150 million in three rounds of investment as the company’s troubles grew, and lost every dollar. The raises were a tiny portion of the company’s losses of nearly $500,000,000 in two years, but Ripplewood rescinded the raises and made each executive work for a dollar per year.

Hostess paid out almost $100 million in health benefits for retirees last year, but over half of it covered workers who never had worked at Hostess. You see, the Teamsters’ “multi-employer pension plan” transfers the pension obligations of a bankrupt company to surviving rivals, speeding up the collapse of troubled companies.

Union rules designed to create more union jobs forced Hostess to run separate truck fleets for delivering bread and its sweet products. Instead of one driver delivering to each of Hostess’ thousands of customers, union rules required two, one for sweets and one for bread. Union restrictions on distribution routes made it unprofitable to serve tiny outlets, yet the union barred Hostess from using non-union distributors.

Workers were asked to take an 8 percent pay cut and pay 17 percent of their health-care costs, like most other workers do, instead of zero. In return, the union would have received 25 percent ownership of Hostess plus $100 million of debt to be paid back to the unions.

Instead, the union made a decision that closed the company, and nearly 18,500 workers will lose their jobs as the company shuts 33 bakeries and 565 distribution centers, and 570 outlet stores.

And then there is the Service Employees International Union (SEIU) that was voted out at Aviation Safeguards at Los Angeles International Airport by company workers who wanted out of the SEIU. In response the union brought in 1,000 members who weren’t employees of the company to block entrances to the airport, inconveniencing hundreds of innocent travelers.

“We petitioned to leave the SEIU almost a year ago, and the contract ended,” Frederick McNeil of Aviation Safeguards said. “And now they’re bringing in outsiders to block travelers who are just trying to get home for the holidays. It’s ridiculous.”

The United Food and Commercial Workers organized Black Friday protests against Wal-Mart, and the National Labor Relations Board refused to respond in a timely manner to a Nov. 17 Wal-Mart petition to prohibit the protest, saying the request would be dealt with the week after Thanksgiving.

Relatively few Wal-Mart employees participated, and one protester carried a sign that said: “I’m getting paid $5.50 an hour by the union to protest Wal-Mart paying $9.50 an hour.”

In the 1920s renowned union leader Samuel Gompers was asked what organized labor wanted, and reportedly answered, “More,” a philosophy that endures today. Unions raise employee costs beyond the competitive level, increasing prices to consumers and putting negative economic pressure on businesses. If unions are to survive, they must cease being enemies of business and become partners with them, working for the mutual success of companies and their workers.

Cross-posted from Observations

The cost of Obamacare seriously threatens businesses and jobs

By James H. Shott

It is a simple concept: A business is an organization that provides products or services that it believes people need or want, and if it provides good quality at a fair price it should succeed. Some businesses are single-person entities, but most employ a few people or as many as thousands of people to perform tasks related to the production and sale of its products or services, and in return for their labor they receive agreed-upon compensation that enables them to buy things from other businesses like food, shelter, clothing and other needs and wants. It is what makes America run.

Since Leftists don’t understand the way businesses work, they view them with suspicion and not infrequently seek to punish them for doing things they must do to stay in business. They sometimes even seek to punish businesses when they don’t do things the Left thinks they should do, but which have no business-related function.

When you combine the Left’s abysmal understanding of business operations with its compulsion for government solutions to every perceived problem, and add in the habit of implementing solutions without fully considering the repercussions, the stage is set for mass chaos.

Case in point: The ominous effects of Obamacare on employers, particularly small businesses, have been discussed since healthcare reform was just a poisonous glimmer in the Leftist mind. But despite the ample economic reasons for why this healthcare reform was a bad idea, the Left still doesn’t get it: Obamacare raises operating costs for businesses that implement the plan, and when costs rise, businesses must raise prices and/or cut expenses to offset the increase. Higher prices discourage customers, who either find a better price from a competitor or just buy less of that product or service. Both put businesses at risk.

But the Left freaks out when companies opt to protect their customers and themselves from the harmful effects of higher prices when they focus on the biggest expense most businesses have: employee costs.

Because the Left’s solutions are poorly thought out, they fail the common sense test and therefore fail to persuade people to accept them on their merits. The Left then resorts to forcing its ideas on us. Barack Obama’s manic effort to replace traditional energy with “green” energy is a prime example of an idea that people rejected because they saw that it couldn’t work. Nevertheless, the Obama administration declared war on coal and oil production to force us to use inadequate wind and solar energy because they arrogantly believe they know what is best for the rest of us.

Since Obamacare increases health insurance costs, often doubling them, businesses have to decide how to offset those costs. They can cut expenses, raise prices, or some combination of the two. Those who can’t justify increasing prices and can’t cut enough other expenses must look at employment expense, and reduce full-time staff below the threshold level through staff reductions and/or reduce full-time employees to part-time hours. Even companies that decide not to implement Obamacare must pay a $2,000 per employee penalty.

But despite the fact that rising employee costs are the problem, the Leftists reject staff and hour reductions as unfair; believing the money to cover the enormous costs of Obamacare will simply appear out of thin air. Thus, when the Papa John’s pizza chain said it must raise prices or reduce employee hours to get expenses under control, the Left suggested boycotting Papa John’s: To convince the company to do nothing about increased employee expenses, the Lefties propose that people buy their pizza from a competitor. Only the Left would react to an employer trying to stay in business by boycotting it.

Other chains also are boycott targets for the same reason: Burger King, Domino’s Pizza, McDonald’s, and Applebee’s.

Obamacare’s anti-business and job-killing requirements are not the only reason the Left proposes a boycott; a business that doesn’t spend its money according to Leftist dogma also may be attacked.

A self-identified liberal website urges liberals to “bring these people down,” referring to a list of “fast food joints” that the website owner dislikes because of how they use their own money: Chick-fil-A, Cinnabon, White Castle, Waffle House, A&W, KFC, Long John Silver's, Pizza Hut, Taco Bell, IHOP, Arby's, Chili's, Cracker Barrel Old Country Store, Hardee's, Olive Garden, Red Lobster, LongHorn Steakhouse, Wendy's, and Outback Steakhouse.

All of these businesses deserve our support, and at least one organization supports businesses targeted by the Left’s loony idea. Rebooting America organized a Papa John’s Appreciation Day last week.

One employer who owns about 100 restaurants nationwide decided to pass on the costs to his customers along with reducing employee hours. He plans to put a 5 percent surcharge into effect to help offset the increased cost of health insurance and also to help customers see the harmful unintended or unadvertised effects of foolish, ill-considered policies like Obamacare.

In order to fix a healthcare problem that required only a little tweaking, our intrepid Leftist government instead tried to revamp an entire economic system and created a myriad of other serious problems. What’s really scary is that the worst is likely yet to come.

Cross-posted from Observations

One week out: The case against President Barack Obama’s re-election

Commentary by James H. Shott

Four years ago the left was filled with optimism and poised to win the presidential election. The Democrats had nominated the first African-American candidate for President of the United States, and millions were spellbound, and buoyed by his message of hope and change.

During his acceptance speech at the Democrat Convention, Barack Obama said, “we will be able to look back and tell our children that this was the moment when we began to provide care for the sick and good jobs to the jobless; this was the moment when the rise of the oceans began to slow and our planet began to heal; this was the moment when we ended a war and secured our nation and restored our image as the last, best hope on Earth.” The crowd went wild.

And it was about time we did those things. We had never cared for the sick before or provided jobs to the jobless. Or ended wars or been the last, best hope on Earth before.

In a campaign amazingly light on detail and substance, a dreadfully inexperienced Barack Obama won the election.

When he assumed office the country was in the midst of a recession, one President Obama frequently refers to as “The Great Recession.” As time passed and things didn’t improve as promised, this title has become a tool to make the downturn seem worse than it was to excuse his dismal performance on the nation’s crushing economic problems. Data show that other recessions were worse in one or more aspects than this recession, and while significant, the 2008 recession does not rate the honorific the president bestowed on it.

What does deserve our attention is the non-existent Obama recovery, which still has not taken hold 56 months after the recession began.

President Obama claims 5 million new jobs have been created during his term, but for the 37 weeks of 2012 through Sept. 15 the weekly new unemployment insurance claims average roughly 374,000, a total that dwarfs 5 million new jobs in just 37 weeks.

The U-6 unemployment rate stands at 14.6 percent as of September 30, and includes the unemployed, under-employed and those who have given up looking for work, a total of 22.6 million people.

Mr. Obama increased the national debt from $10.6 trillion on Jan. 20, 2009 by 51 percent, or $5.4 trillion, through a failed stimulus and a government spending spree. Despite spending all that borrowed money, since Q3 2009 GDP has averaged only 2.17 percent, substantially lower than the 3.25 percent average GDP through expansions and contractions since 1947.

Median household income has declined by 7.3 percent, and last year the Census Bureau reported more Americans in poverty than ever before in the more than 50 years that it has tracked poverty. Ironically, the group that has suffered the most during the Obama presidency has been black Americans, whose real incomes have fallen by more than 11 percent.

Had Mr. Obama set out immediately to address joblessness, and championed policies to spur the economy we would be far better off than we are. Instead, he wasted two years getting a bill passed to revamp the nation’s healthcare system, against the will of 60 percent of the people he serves.

Yet, the president does not regret wasting two years on Obamacare instead of focusing on the economy. In an interview with the Des Moines Register Mr. Obama said he had no regrets that he didn’t focus on the nation’s most pressing issue. “Absolutely not,” he said.

The dismal economic performance affects us all; however, the most remarkable failure is the scandalous behavior of the Obama administration before and after the terrorist attack on the U.S. consulate in Benghazi, Libya, where during a seven-hour attack four Americans were murdered. There was a reduced level of security before the attack, despite numerous requests to maintain the higher levels and even increase those levels because of recent attacks on U.S. facilities and mounting levels of violence.

Requests for help during the attack, including requests from personnel stationed nearby who wanted to help were denied. And worst of all, adequate answers to the many legitimate questions about what actually happened still have not been provided fully seven weeks after the attack. It is difficult to avoid assigning political motives to this behavior, which appears at this point as a clumsy cover-up to get through the election.

Add to this the Fast and Furious gun-running debacle, the ridiculous job-killing ban on drilling for our own oil on federal lands, and the war on coal killing thousands of coal jobs and thousands more in related industries like power plants, railroads and support businesses, and there simply is no reason to give this man more time to wreck the economy.

Barack Obama is not the god-like figure his fawning fans believe him to be, but a very average man who allowed the nation to continue to suffer while he pursued his ill-advised ideological goals.

On the campaign trail he now says, “I want your vote for what I’m going to do.” But we’ve heard that one before, and we can’t afford to fall for it again.

Cross-posted from Observations

Trying to understand job numbers that appear to challenge reality

Commentary by James H. Shott

After three years of a lackluster economy, unacceptably high unemployment, serious policy gaffes and generally poor performance, President Barack Obama really needed some positive development. But he didn’t get anything positive at the first presidential debate with challenger Mitt Romney, which was, to be kind, uninspiring.

And then – magically, two days after the debate – the September jobs report came out and in one fell swoop wiped away that negative. From the jobs report we learned that the U-3 unemployment rate fell from 8.1 to 7.8 percent, a surprisingly large drop, given what we’ve seen over the last three years, big enough to get below the magic 8.0 threshold that dogs incumbent presidents.

But then the big surprise: There were 873,000 more people working in September than in August.

Really? Nearly a million people found work in one month?

That number is wildly out of line with months of job number reports. According to the Bureau of Labor Statistics (BLS), “In 2012, employment growth has averaged 146,000 per month, compared with an average monthly gain of 153,000 in 2011.” And suddenly, just when Mr. Obama needed it most, 873,000 people find work. What’s going on?

The BLS has two monthly surveys that measure employment levels and trends: the Current Population Survey – the household survey – and the Current Employment Statistics survey – the payroll or establishment survey – which the BLS describes thusly: “The household survey and establishment survey both produce sample-based estimates of employment and both have strengths and limitations.” The establishment survey has a larger sample size and smaller margin of error than the household survey. “However, the household survey has a more expansive scope than the establishment survey.”

Economists say that over a period of months the two different surveys will show similar results, however, the household survey is erratic, with wild monthly swings up and down, and it is not unusual for responses to the survey to be made by proxies, who may answer for the targeted respondent. Any single month’s results cannot be depended upon for an accurate picture of employment changes from the previous month, whereas the establishment rate moves more steadily up or down.

Illustrating that point is that the establishment/payroll survey showed total nonfarm payroll employment rose by only 114,000 in September, which is substantially lower than the monthly average of 146,000 for 2012, but more in line with average job growth than is the household figure.

“We believe part of the drop in the unemployment rate over the last two months is a statistical quirk (the household data show an increase in employment of 873,000 in September, which is completely implausible and likely a result of sampling volatility),” say economists John Ryding and Conrad DeQuadros of RDQ Economics. “Moreover, declining labor force participation over the last year (resulting in 1.1 million people disappearing from the labor force) accounts for much of the rest of the decline,” they conclude.

Just how implausible is that 873,000 new jobs number that appeared in only a month? It is the highest one-month jump in 29 years.

Further, the BLS explains that jobs reflected in the household survey are different types of jobs than are tracked in the payroll survey. They include those in start-up businesses, the self-employed, unpaid family workers, agricultural workers, private household workers, and some are people who can’t find a regular job and have started working from home, perhaps selling items on E-Bay; jobs that are excluded by the establishment survey.

While the U-3 rate fell to 7.8 percent, it is still too high. The sky-high number reported in the household rate may reflect a turn in the oh-so-slow rate of job creation. But it may not. We’ll have to wait and see what happens next month.

Following this “October Surprise,” to maintain a healthy perspective, other statistics must be kept in mind: The economy is grinding forward, with GDP a mere 1.3 percent last quarter. Most knowledgeable observers say we need 200,000 to 250,000 new jobs each month to drive unemployment down at a suitable speed, not the 146,000 we’ve been averaging. And while the Labor Force Participation Rate ticked up to 63.6 percent from 63.5 percent, it is still near the 30-year low.

More relevant, the U-6 unemployment rate counts those who are underemployed and those who have given up looking for a job, and now sits at the seasonally adjusted rate of 14.7 percent.

The number of persons employed part time for economic reasons rose from 8.0 million in August to 8.6 million in September, because many workers saw their hours cut back or because they were unable to find a full-time job.

“The household survey painted a picture of a sharply falling unemployment rate—down 1.2 points over the last 12 months,” say Ryding and DeQuadros. “Such a rapid decline in the unemployment rate would be consistent with 4 percent to 5 percent real economic growth historically. Of course, the economy is not growing 4-to-5 percent, not even half that.”

Despite this surprising bit of good news, the economy is still under-performing, and nothing has changed to warrant four more years of Obamanomics. It’s way too little, and far too late.

Cross-posted from Observations

Like most investments, private equity firms are good for the economy

Commentary by James H. Shott

The purpose of every investment – however ordinary or unusual; however simple or complex – is to make money through earned interest or dividends, or profiting from sales of items, services or businesses.

Whether it is a passbook savings account or a Certificate of Deposit; corporate or municipal bonds or shares of stocks; your employer’s pension plan that grows in value to fund retirement; investing in a business and working to have more revenue than expenses; or investing in a private equity firm that buys existing businesses and hopes to build the value of those businesses, profit is the reason people invest.

Nearly everyone understands and accepts that they should collect earnings from a savings account or a stock purchase, but many of these same people are horrified when business owners sometimes make a good living or private equity firm partners make significant money in their activities.

Some seem to think that the purpose of business is to achieve social goals, and try to impose all sorts of their favored ideals on the business world. While many businesses do support community or charitable programs, these are secondary activities. Making a profit so they can remain in business is their primary purpose.

Like every other investment, the purpose of putting money at risk by investing in a private equity (PE) firm is to make a profit, and PE firms do that by buying companies and selling them. They don’t buy successful companies because the price of a successful company is already high, and trying to make a successful company even more successful, and therefore more valuable, is mostly a no-win situation.

Instead, they buy companies that are failing or underperforming, because like a house that hasn’t been taken care of and needs a lot of work, these companies can be purchased at a relatively low price.

Perhaps the company needs to upgrade its equipment or processes; maybe management is stagnant, failing to make good decisions or timely decisions; or it spreads production components too thinly over too many products; or sometimes it must reduce employment to save the company. A fresh look by new owners with particular expertise in what the company does may very well turn it into a profitable entity. That is the bet that private equity firms make.

The firm then uses its expertise to recommend steps to improve the operation and performance, and the company most often prospers, grows, and creates jobs. The improved company is naturally more valuable than when it was purchased, thus the selling price is higher, and sometimes much higher. In three to five years the PE firm would sell the company at a profit, making money for its investors.

This isn’t magic. This isn’t criminal. This isn’t greedy. It is purely logical. And, furthermore, it was the intention from the start, along with producing the positive economic benefits it created and the products and services that it produced to satisfy the wants and needs of consumers.

So, the people investing in private equity firms put their money on the line, risking it on the hope that the firm will successfully buy and turn around poorly performing companies, and sell them at a profit.

However, private equity firms do not always succeed in turning around a purchased company, and in such cases the failed company is closed and people lose their jobs, and yes, the investors lose money.

The private equity folks can’t win. They get criticized as greedy when they succeed in turning around a failing company and then selling it for a handsome profit, and when it fails to turn a company around and the company closes and people lose their jobs, they get portrayed as profit-hungry, selfish capitalists.

What many people do not or cannot understand is the fact that the companies PE firms cannot save likely would have shut down had they not stepped in, and likely much sooner if it had not been acquired. And then there are those who use the pain of lost jobs and closed businesses as opportunities to further their political goals.

This is yet another example of how the American public’s abysmal understanding of how the economy works not only impedes the process of implementing favorable policies that will allow the economy to grow, but also arms demagogues with tools to take advantage of us for their selfish purposes.

There are other facts that need to be emphasized. First, if PE firms weren’t successful most of the time, savvy people would not invest in them. And, private equity investors use their own money in these endeavors, rather than taxpayer money, so no public money is lost in the relatively few times that they fail to turn a company around.

In “American Restoration: The Role of Private Equity,” an article on the Heritage Foundation’s website by J.D. Foster, Ph.D., the author explains that private equity firms “don’t always succeed. But their very existence and the [large] profits they reportedly make testify that they succeed far more often than they fail, and a lot of Americans can thank their continued employment to the prowess of these American restorers.”

Cross-posted from Observations

The American media’s fraud and corruption are at an all-time high

 
Commentary by James H. Shott
 
Recent dishonesty demonstrates why the mainstream media is largely no longer worthy of the trust of the American people.
 
Following the massacre of movie-goers in an Aurora, Colorado theater early last Friday morning, ABC’s Brian Ross twisted himself into knots to connect the violence with the Tea Party on “Good Morning America” with George Stephanopoulos. Here is the text.

Stephanopoulos: I’m going to go to Brian Ross. You’ve been investigating the background of Jim Holmes here. You found something that might be significant.

Ross: There’s a Jim Holmes of Aurora, Colorado, page on the Colorado Tea Party site as well, talking about him joining the Tea Party last year. Now, we don’t know if this is the same Jim Holmes. But it’s Jim Holmes of Aurora, Colorado.

So, Mr. Ross, if you don’t know “if this is the same Jim Holmes,” why even mention this? It’s not like “Jim Holmes” is so unusual a name that it couldn’t be shared by multiple individuals. Is wild speculation your idea of responsible journalism? Or, are you just taking advantage of a horrible crime and the pain it caused to score cheap political points for your own ideology?
 
Even if it was the same Jim Holmes, there was no indication that the shooting had any connection whatsoever with the Tea Party. Like the shooting of Congresswoman Gabrielle Giffords last year, this is another pitiful and failed media attempt to tie the Tea Party to violent acts.
 
ABC issued a correction, and then an apology, and that likely will be the extent of its efforts at contrition. However, the family of the man Mr. Ross falsely connected to the shooting was still getting death threats days later.
 
Question: How can anyone trust Brian Ross’ reporting hereafter, or that of ABC?
 
The cable network MSNBC got caught manipulating a comment by Republican presidential candidate Mitt Romney, totally changing the context of a statement he made in order to ridicule and demean him.
 
The fraud that MSNBC anchor Andrea Mitchell palmed off on her viewers painted Mr. Romney as an out-of-touch elitist who doesn’t understand how retail commerce works.
 
Ms. Mitchell introduced a video clip, saying “I get the feeling – take a look at this – that Mitt Romney has not been to too many Wawa’s [convenience stores] along the roadside in Pennsylvania.” In the clip, Mr. Romney comments: “I was at Wawa’s, I wanted to order a sandwich.  You press the little touch tone keypad, alright, you just touch that, and you know, the sandwich comes at you, touch this, touch this, touch this, go pay the cashier, there’s your sandwich.  It’s amazing.”
 
Ms. Mitchell and her accomplice yuck it up at the candidate’s obvious ignorance of this common method of selling food: “It’s amazing,” she smirks. 
 
But she pulled a fast one on viewers who trust her to honestly tell them what is going on the in the world. What actually happened was that Mr. Romney, prior to relating the Wawa’s anecdote, commented on how a friend had a simple procedure badly mangled by incompetent government bureaucracy that required him to fill out a 33-page form to notify the government of his change of address. Twice. 
  
He was contrasting government inefficiency with the efficiency and innovative nature of the private sector. But that’s not the message Ms. Mitchell wanted her viewers to get, apparently.
 
Question: Is Andrea Mitchell’s reporting trustworthy?
 
After the shooting death of 17 year-old Trayvon Martin by George Zimmerman in Florida, a large number of people, aided by media reports, rushed to judgment accusing Mr. Zimmerman of a racially motivated killing of the young man we all came to know from the photo of an angelic-looking youngster taken when he was 12 years-old. 
 
Whether Mr. Zimmerman committed a crime, or merely defended himself will be determined at trial, which every American – even those knee-jerks who jumped to the conclusion that the shooting was racially motivated – needs to understand is the proper setting for such determinations.
 
News organizations are expected to accurately report to the public what is known about events. A well-informed public is less likely to react emotionally and inappropriately, as so many did in the Trayvon Martin shooting. These days it seems the mainstream media frequently ignores ethical standards.
 
Supporting that point is the way NBC News edited the recording of Mr. Zimmerman talking with a police dispatcher, and creating the impression that Mr. Zimmerman had a racial prejudice against Trayvon Martin. It then broadcast this deception on the “Today Show”: “This guy looks like he’s up to no good.  He looks black,” George Zimmerman tells police in NBC’s edited version.
 
Here, however, is original text of the call:

Zimmerman: This guy looks like he’s up to no good. Or he’s on drugs or something. It’s raining and he’s just walking around, looking about.

Dispatcher: OK, and this guy — is he black, white or Hispanic?

Zimmerman: He looks black.

In these examples, people were deliberately trying to manipulate you with fraudulent reporting, or they are incompetent. When news organizations slant the news, or manufacture the news, whatever the cause, it is unethical, underhanded and unforgiveable.
 
Cross-posted from Observations

Smart economic policies push states to top of business-friendly list

 

Commentary by James H. Shott

“Regulation and litigation are the bane of business,” according to CNBC in its 2012 America’s Top State for Business survey. “Sure, some of each is inevitable. But we graded the states on the perceived ‘friendliness’ of their legal and regulatory frameworks to business.”

While some states, counties and municipalities are friendly to businesses, others employ policies that drive them away. Among states, Texas and California epitomize these two extremes. With its free-market economic reforms of the last several years Texas has created more than 410,000 jobs since the recession began in 2007, while California has lost nearly 900,000 over that same period. Once again, Texas tops the CNBC list, the third time in five years, besting last year’s winner, Virginia, which dropped to third place.

If a state wants to create jobs, what should its governor and legislature do? Well, they could seek the wisdom of a professor of sociology, a police officer, or a pathologist, an NBA star, or a Nobel Laureate in physics, all knowledgeable people in their field. But to find out how to encourage job creation, you might get the most useful information from employers about what they look for in choosing a suitable environment in which to operate, and then make the state’s environment as close to what they told you as possible.

This common sense prescription desperately needs to be applied at the federal level, where anti-business policies that have kept the United States in recession-like conditions for the last 41 months thrive. Perhaps someone in a position of power in Washington will take notice of how states work to attract or repel business and it will serve as a wake-up call, although recent history argues strongly against that happening.

In answer to the question of how to create jobs, one CEO told Chief Executive Magazine the following: “Do not overtax business. Make sure your tax scheme does not drive business to another state,” he said. “Have a regulatory environment and regulators that encourage good business—not one that punishes businesses for minor infractions. Good employment laws help too. Let companies decide what benefits and terms will attract and keep the quality of employee they need. Rules that make it hard, if not impossible, to separate from a non-productive employee make companies fearful to hire or locate in a state.”

Businesses also seek an environment with consistent policies and regulations that allow them to plan for a significant period into the future, as well as an overall positive attitude toward business and a productive work ethic among its population.

None of that seems particularly radical, and in fact seems very logical. It just makes sense to keep taxes and regulations from impeding job creation, and during times of high unemployment to at least relax those that get in the way. Destructive federal policies have been in effect and stifling job creation throughout President Barack Obama’s term. In February 2009 the unemployment rate shot through the 8.0 percent barrier that the president assured us would never be breached, and it remains above that mark today.

The top five business friendly states in the CNBC survey are: Texas, Utah, Virginia, North Carolina, and North Dakota, while the bottom five are: Mississippi, Alaska, West Virginia, Hawaii, and finishing last, Rhode Island.

Most of the highest ranking states share features like lower tax burdens, governments more amenable to allowing economic growth, little or no union labor, and, as it turns out, state governments dominated by Republicans.

Of the top 10 states in the survey, seven have both Republican governors and legislatures, and of the bottom 10 states, six have Democrat governors and legislatures. Of the top ten states, only two have Democrat governors and in the top 20 there are only five Democrat governors.

It is also worth noting that Republican leaders in the high ranking states support economic policies that mirror the national Republican platform.

Obviously, facts illustrating which political party has policies that generally foster a better job creating environment will not please Democrats, but it is what it is. Of course, policies that promote a positive business environment are not necessarily restricted to Republicans, and Colorado’s business-friendly Democrat Governor John Hickenlooper proves the point: His state sits eighth among CNBC’s top states. It just happens that Republicans generally promote policies that encourage job creation, economic growth, and wealth creation, whereas Democrats, who adhere to liberal, or so-called “progressive,” values generally promote policies that obstruct these things.

It is not difficult to find the answer to the question, “in times of high unemployment and economic stress, which political party will be most likely to create an atmosphere that will allow the private sector to correct these problems?”

And once that answer is found, everyone who cares about creating jobs and improving the economy must vote for candidates that support policies like those adopted by the states at the top of the CNBC survey that will make it possible to improve the economy and create jobs, and finally turn Mr. Obama’s stagnated economy into a recovering economy.

Cross-posted from Observations

Wisconsin recall debacle casts negative light on labor unions

 

Commentary by James H. Shott

Wisconsin’s Republican Governor Scott Walker and Lieutenant Governor Rebecca Kleefisch, and three of four Republican state senators won the election last week against a public sector labor union-fueled recall movement.

Walker and Kleefisch both won handily against Democrat opponents, 53-46 percent and 53-47 percent, respectively, approximately the same margin by which Barack Obama won the presidency in 2008.

It was a much bigger victory, however, than some news outlets would have you believe. [begin ital] The New York Times [end ital] and [begin ital] The Washington Post, [end ital] for example, said Gov. Walker “survives” recall, as if he won by a point or even a single vote. Some media called Mr. Obama’s 2008 seven-point victory a landslide, but with a seven-point victory, Gov. Walker merely “survived.” Six- or seven-point margins are solid wins, but not landslides, even when Mr. Obama is the winner.

At the root of this upheaval was Wisconsin’s adoption last year of sweeping reforms that curbed collective bargaining rights among government workers, brought the state’s pension system into line with private sector pension systems, and empowered public sector workers to choose whether or not to pay union dues. This bill was passed to save Wisconsin some $30 million in the 2011 fiscal year, helping to reduce a substantial budget deficit.

This was an exercise in union excess. The fact that Scott Walker won the General Election and did what he promised to do in the campaign is not sufficient reason to demand a recall. Given the frequency with which campaign promises are forgotten after the election, one could make a case that the Governor’s performance is reason for celebration.

And speaking of his performance, it has been pretty good.

When he took office on January 3, 2011 the labor force was 3,068,342 strong, 2,828,816 people were working, 239,526 were unemployed, and the unemployment rate was 7.8 percent, according to the Bureau of Labor Statistics (BLS).

As of April of this year, BLS numbers showed marked improvement: the labor force was about the same at 3,068,900 workers, but 2,863,590 were employed, the number of unemployed had fallen to 205,310, and the unemployment rate was 6.7 percent. Approximately 34,000 of the unemployed had found a job. Is that level of improvement in little more than a year bad, or good?

The recall election is a mechanism designed to remove officials during a term of office, but is not a method intended to undo an election because some political faction is unhappy with the results. The people at-large made their decision, and the union faction did not prevail. Barring some illegal activity by those duly elected, everybody should just take a deep breath and wait until the next election.

The ill-conceived recall cost the state millions of dollars and distracted everyone in state government from doing the work they were elected or hired to do. According to polling data, many Democrat voters recognized that the recall was a bad idea, and voted against it because they disagreed with the recall movement more than they disagreed with Gov. Walker’s performance.

This effort is a black eye on the union, conjuring up images of children stamping their feet when they don’t get their way. It epitomizes what is wrong with labor unions, particularly public sector unions: excess.

There is nothing inherently wrong with organized labor, and indeed, there were very good reasons for labor to organize in the past. However, labor law has evolved to a point where laws now mostly control the relationship between employers and employees, eliminating the abuses that were the reason for unions to have originated. Unions simply are no longer needed to protect workers from abuse, and they now focus not on a safe and fair work environment, but on pay levels that are higher than market value and special perks, all of which boost costs for employers.

And that is particularly so in the case of public sector unions. Since government determines the labor climate and is the arbiter of labor disputes, to have a union representing government workers against the government is totally nonsensical.

The problem posed by the Wisconsin recall madness is far less the responsibility of rank and file union members, many of whom have no choice whether to join a union or not, than of union leadership – which uses political donations and pressure to gain excessive pay, benefits and special perks for members – and the politicians who were more responsive to the lure of financial support and votes than to their responsibility to the taxpayers for whom they work.

It is not the members’ fault if they have an unrealistic level of job perks, and they do feel they are treated unfairly when someone wants to take something away from them. Their position is understandable, even if their level of protest is not.

But the reality is that the level of pay and benefits of public employees places an unfair burden on the taxpayers, and has to be fixed to help restore fiscal stability to the state, and Scott Walker’s first responsibility is to all the people of Wisconsin, not the public employee union.

It is the first step in restoring balance to the realm of public employment.

Cross-posted from Observations

Liberal U.S. media working to subvert Mitt Romney’s candidacy

 

Commentary by James H. Shott

The experiences of Republican presidential candidate Mitt Romney last week illustrate how the media fail to provide adequate, objective and balanced coverage of serious campaign issues.

Campaigning in Colorado last week, Mr. Romney gave an interview to a local TV reporter, no doubt wanting to talk about his ideas for combating the horrible economic conditions, the need for jobs, and other weighty problems that threaten the nation.

The reporter began by asking about Mr. Romney’s inability to connect with Colorado Republicans, and following his 24-second answer then moved to same-sex marriage. Mr. Romney gave what he said was the same answer to this question as he has given from the beginning. The reporter then asked follow-up questions on that same subject. After two minutes of questions and answers on same-sex marriage, the reporter then asked if illegal aliens should receive in-state tuition. And then after that she asked Mr. Romney about medical marijuana.

So, given the opportunity to interview the likely Republican nominee for the office of President of the United States, a local reporter spends three minutes of the four and one-half minute interview asking about social issues.

Mr. Romney had about all he could stand, so he protested, since medical marijuana, same-sex marriage and tuition for illegals are neither the most important issues facing the nation, nor something about which a President of the United States should be concerned, since they are state issues.

And, indeed, there are obviously more important issues needing attention, such as the $16 trillion national debt that runs to $50,000 for every one of the more than 300 million Americans. How about the highest corporate tax rate in the world that makes U.S. corporations less competitive in the world market? How about the 16 percent of American workers – about 13 million, all together – that can’t find a job at all, or are underemployed? What about a nuclear Iran, and the mess in Afghanistan? How about the fact that the Democrats in charge of the U.S. Senate have shirked their obligation to pass a budget for three straight years?

None of that seemed important to the reporter, but she finally did get around to asking questions about energy.

While the Colorado reporter was focusing on less relevant topics, the intrepid investigators at The Washington Post were busy looking into Mr. Romney’s high school days, searching for archaic dirt. And, they found some.

Some of the former governor’s high school classmates from 1965 said that he had indulged in boyish behavior, and one incident allegedly involved forcibly cutting the long blonde hair of a boy a year younger than Mr. Romney, who the classmates said may have been gay. If true, this was clearly wrong and indefensible. But it was nearly 50 years ago in high school, and appears to be an isolated incident. Yet, The Post thought it was important enough for 5,000 words starting on page 1 above the fold. And since then these allegations have “evolved” into proof that Mitt Romney was a homophobic bully. He also is accused of pulling classmate Susie Jones’ hair in the third grade.

The Post’s crack investigators successfully found this 47 year-old story about Mr. Romney (13 times longer ago than the last budget passed by our Democrat-controlled Senate), but gave little attention to Barack Obama’s history with former members of the Weather Underground and his admitted “enthusiastic” drug use, and were unable to find any information about his mysterious college days, including his grades, his formal papers, his days at the Harvard Law Review, his friends, etc.

Some people’s past apparently deserves closer scrutiny than others. You can understand why The Post might regard Mr. Romney’s past as more important: he’s running for President.

It is relevant to note that the family of John Lauber, the victim of Mr. Romney’s alleged brutish haircut, is appalled that their relative would be used for political purposes. His older sister, Christine, was unaware that Mitt Romney, or anyone else, “bullied” her brother, who passed away from liver cancer in 2004, but she was clearly not pleased by the story. “Even if it did happen, John probably wouldn’t have said anything,” she said. “If he were still alive today, he would be furious.”

“The family of John Lauber is releasing a statement saying the portrayal of John is factually incorrect and we are aggrieved that he would be used to further a political agenda,” she said. “There will be no more comments from the family.”

The treatment of Mitt Romney in 2012 and the treatment of Barack Obama in 2008 couldn’t be more different. In the Romney story, an unproved allegation of bullying gets front page treatment from The Washington Post, but admitted drug use, et al, by Barack Obama goes virtually unreported.

By emphasizing peripheral issues like same-sex marriage, illegal alien tuition, medical marijuana, and high school behavior, the liberal media distracts attention from President Obama’s dismal record on the critical economic problems. And in the attempt to discredit Mr. Romney, The Washington Post story denigrates John Lauber’s memory and upsets his family, presumably because of its obligation to inform the public. Well, about some things, anyway.

Cross-posted from Observations

You can’t make this stuff up: reality is often stranger than fiction

 

Commentary by James H. Shott

A couple of items recently in the news illustrate the weirdness of some of the ideas that are put forth for serious consideration these days, and that actually gain support from some Americans.

Labor unions in Indiana are upset over the state’s recently passed right-to-work law. According to the National Right to Work Legal Defense Foundation, a right-to-work law “affirms the right of every American to work for a living without being compelled to belong to a union. Compulsory unionism in any form – ‘union,’ ‘closed,’ or ‘agency’ shop – is a contradiction of the Right to Work principle and the fundamental human right that the principle represents.”

Individual freedom such as the option not to belong to a labor union was a fundamental component of the United States Constitution, but that concept has Indiana’s unionists all out of sorts. They fear the new law will cause a decline in union membership, something that is so far not supported by the data in other right-to-work states. Nevertheless, Indiana unions recently filed a suit to overturn the law. The suit cites two reasons that the law violates the Thirteenth Amendment to the U.S. Constitution, which prohibits slavery and involuntary servitude. First, the suit complains that it requires dues-paying union members to work alongside non-dues-paying workers, terming that condition “compulsory service and/or involuntary servitude within the meaning of the amendment.”

Translation: If all workers are not forced to join the union, union workers effectively become slaves.
The second point, however, seems a fair criticism: that it is unfair to force “unions to furnish services to all persons in bargaining units that it represents, but it may not require payment for those services,” and once again they make a “slavery” connection. However, this complaint is even more foolish than the first one, since the unions asked for and received monopoly rights over collective bargaining, meaning they asked to be the bargaining agent for all workers, and were granted that status. You cannot rationally seek and accept the monopoly right to bargain for everyone, and then complain that representing non-union members effectively makes slaves out of union members.

Moreover, if we are talking about slavery, it is a far more persuasive argument that forcing workers to join the union and pay dues in order to have a job makes slaves of those who prefer not to join the union.
Next, in an irrational effort at political correctness (excuse the redundancy), the Applied Research Center (ARC) and its news site, Colorlines.com, are demonizing Americans who use perfectly proper language to accurately describe a law-breaking activity.

“Drop the I-Word” is a movement that attempts to do through distraction and demagoguery what rational thinking precludes. The “i-word” – illegals – is “a harmful slur,” according to the ARC, “a racially charged slur used to dehumanize and discriminate against immigrants and people of color regardless of migratory status. The i-word is shorthand for ‘illegal alien,’ ‘illegal immigrant’ and other harmful terms,” it says. The organization hopes that a majority of Americans will fall for this grand fraud that attempts to persuade us that the criminal act of people who sneak into the United States is really not a crime.

Somewhere in the Great Beyond George Orwell is smiling.

By accurately labeling the method willfully chosen by illegal immigrants to enter the U.S., the ARC asserts that we are denying people “basic human rights.” “No human being is illegal,” it proclaims. That may be true, but human beings can do illegal things, and sneaking into the country is one of them, thus the completely appropriate terms “illegal alien” and “illegal immigrant.”

Like the Indiana unions, the ARC does identify one piece of truth: “Immigrants without documents are regularly hired as cheap, exploited labor.” But this is not a result of correctly labeling them “illegal,” it results from the failure of the federal government to stem illegal immigration by enforcing immigration laws and guarding our borders. Businesses cannot hire and exploit illegal immigrants unless they are available to be hired and exploited.

Taking this absurdity to its illogical extreme, a video posted by the radical leftist organization MoveOn.org says calling illegal immigrants “illegal” fits the definition of a hate crime and calls for the word to be banned when used in the context of immigration. Rather than discuss the pros and cons of this issue, MoveOn.org prefers to silence the opposition, or better yet, imprison opponents to keep them from challenging goofy ideas like this one.

For Indiana unionists, apologists for illegal aliens/immigrants, and others inhabiting this strange other-world, working beside non-union workers is “slavery,” and illegal aliens are not illegal. Fitting nicely into this madness is the case of a Muslim U.S. Army officer crying "Allahu Akbar" while committing the jihadi murder of 12 soldiers. He is considered to have committed "workplace violence," but an American citizen with a Tea Party bumper sticker is regarded as a "domestic terrorist."

In this bizarre world the trees are a bright orange, the sky is chartreuse, the clouds are a rich puce, and standards and definitions change with the political winds. A society in the throes of such idiocy cannot long survive.

Cross-posted from Observations

Delusions of Incumbency…..

By: J Robert Giles
@JRobertGiles

“Hence that general is skillful in attack whose opponent does not know what to defend; and he is skillful in defense whose opponent does not know what to attack.”   - Sun Tzu

 

Yesterday, I read an article by Jana Neweley on her website. Jana writes from a perspective that is unfortunately quite unique but growing rapidly. In the article titled Note to Republicans: Pay No Attention to That Democrat Behind the Curtain; Jana does a fantastic job of explaining the democrat’s campaign strategy. D-D-D (Deflect Distract Deny)

(Excerpt from Jana’s Article)

In regards to the War on Religious Freedom, this is how it went on the Democrat’s side:

Phase One is DEFLECT = “This has nothing to do with religious freedom or the First Amendment. Republicans don’t want women to be healthy. They want women to suffer. They want women to die.”

Phase Two is DISTRACT = “Have you met Susan?” Introduction of a female college student, who uses birth control, in order to make their argument more convincing. “See, we told you so.”

Phase Three is DENY = Pay no attention to the “Democrat” behind the curtain. The continued denial that states the new HHS mandate has nothing to do with religious freedom. Nothing to do with the First Amendment. But then the Democrats, like Pelosi, go on to make it a national debate by declaring there’s a WAR ON WOMEN and it’s the Republicans who are to blame.

 
Jana goes on to explain the importance of honesty in defending ourselves against this type of attack. Everybody knows that “the truth will always find its way to the surface eventually.” That’s why it’s a cliché. Not only must we “tell” the truth, but we have to remind each other of what the truth is from time to time. Reality is going to be distorted over the coming months in ways none of us can currently imagine. His Barackness is going to manipulate facts, numbers, emotions, and opinions in his effort to obtain incumbency. It’s up to us to remain focused on the truth. His record will soon leave him unsure of what to defend and what to attack.  

The primaries seem to be all but over. Mitt Romney may or may not be the candidate you would have chosen on your own, but he’s most likely going to be the candidate facing off against Obama in November and the narrative has already begun. We must seize that narrative and maintain our ownership until we see Obama driving his brand new Chevy Volt off the White House parapet. It’s time to unite. It’s time to stop arguing about who would be a better candidate. That decision was made yesterday as Santorum dropped out of the race. Gingrich has terrific ideas and an even better passion, but he has no realistic shot at the nomination. Paul’s chances are even less likely, so put your personal differences aside and focus on the mission.

While defeating Barack Obama is certainly at the top of the priority list, I believe it is equally important to deliver a crushing blow to the ideology that has supported his Immaculate Ascension. We must systematically dismantle the very core of Obama’s belief system. The way to do that is to take the fight to them. Nothing is more demoralizing than to be beaten with your own weaponry. For example: Who doesn’t believe that Mark Sanchez will get hurt just before the inevitable Jets – Broncos playoff game next season? Tebow will step in, win the game dramatically…..give a sincere thanks to God, and then move on. Nothing against Peyton Manning but this story pretty much writes itself. We must use the weapons His Barackness is giving us. We must use those weapons to kick him and all of his little minions right in their Obamacles!

• S.L.A.P. – Stop Laugh Address Proceed
  · Stop – Don’t react immediately to accusations and lies.
• · Laugh – Take a moment to enjoy the humor in their fallacies.
• · Address – Distribute legitimate, easily proven facts; dismiss twisted version of reality quickly, efficiently, and convincingly.
• · Proceed –Direct the narrative immediately back to Obama’s record and the reality HE has created for this country. No more hope and change. He’s been reading us a children’s bedtime story but the kids fell asleep over three years ago. It’s time to read something a little more mature and nonfictional.

 

Predict what they’re going to throw at us. We’ve seen plenty of “film” of their “game plan.” Obama’s going to try to increase the level of pessimism in our country. He’ll fan the flames of the opinion that “nobody could do a good job with what’s left of our country so we might as well just leave it alone.” Jobs were lost because of natural disasters in Japan, not ineptitude…..”we’re drilling more than ever”…..”Bush raised the debt too”…..as Dick Morris so eloquently said yesterday in his daily message: By creating an atmosphere of pessimism, Obama “concedes the field of optimism to Romney.” We must seize that advantage and defend it with everything we’ve got. After all, it was optimism that put Obama in office. It was false optimism supported by fairy tales and pixie dust, held up by the efforts of other people, and constructed by outsourced labor, but it was optimism nonetheless. Optimism is the essential element of the American spirit and Obama has consistently ignored it. Optimism is what fuels free market innovation, entrepreneurial ambition, and success. Pessimism is the enemy of such things. Pessimism has never won a presidential election and we simply cannot allow Obama to take back the optimistic platform once he realizes pessimism is getting him nowhere.

He will skillfully insure that racism is manufactured in instances where it simply wasn’t an original motive. His media legions will make sure that those unwilling to look beyond the sound-byte see Obama as the only one capable of ending the sudden outburst of racially motivated hate in this country. Knock that one out of the air, folks! The color of Obama’s skin has absolutely NOTHING to do with his record. There is no “pigmentation” column…..it’s just wins and losses. It’s not a skin color that I’m voting against; it’s the horrendous track record of an appallingly inept President.

His Barackness will release the likes of Jay Carney and Joe Biden, his two most trusted little handbag Chihuahuas, to spread his scent wherever he is personally unavailable. They will appear in front of union supported crowds, trying to convince us all that the mistakes we think he’s made were actually the fault of his predecessor. He will appear in front of throngs of swooning liberal women. (Yes, that image is what the doctor shows you if you’ve had an erection for more than four hours! Cures that problem IMMEDIATELY!) He’ll tell us that voting against him is the same as punching your own mother, sister, wife, or daughter in the face. Again, we must S.L.A.P. this nonsense right in its ugly little face. There is NO War on Women…..that’s a distraction. There is a War on The Constitution and that’s the war to which we must allocate our ‘troops.’

He will continue to try to paint himself as sympathetic yet powerless in our fight against absurdly high gas prices. He and his drones will recite heavily manipulated statistics and figures to imply that these too are somehow the fault of another president. Nope! We’re not buying it, you walking psych study.
He will do his best to convince us that ObamaCare, even if ruled unconstitutional by the one branch with the authority and duty to do so, is exactly what we all need. He will paint the Supreme Court, who was gloriously capable when dismissing claims against his Birth Certificate, as inept and “unelected.” We know they’re “unelected.” They’re appointed by Presidents. They’re appointed to uphold the ideology of the President who appoints them. If the majority was liberal, he’d be praising their efficiency, I assure you.

He will inflate his accomplishments just as he has done with the auto bailout. He claims victories in a process that actually was designed by his predecessor. The parts of the bailout that failed were the parts that Barack Hussein Obama added to the original plan. Bush didn’t agree to sell Chrysler to Italy. Bush didn’t agree to the exclusive creation of union jobs. Bush didn’t suggest government ownership. Tell the truth.
Obama will use his media legions to convince us that he’s winning a race in which we can find no genuine evidence of his advantage. They will tell us that he’s so far ahead we might as well stay home on November 6^th. I don’t plan to follow that advice…..do you?

Tell the truth. Tell it often and tell it loudly. Do not be afraid for you have much more support and backing than you can possibly imagine. Do not be swayed by clever wordplay or narcissistic charm. Do not be persuaded by manufactured commonalities and adjusted reality. Tell the truth. Remind yourself of the truth and compare it to what you are being told in the news, or from the mouth of your country’s elected leader President. Let the anger that follows fuel you until you cast your vote.

As always, thanks for playing!

J. Robert Giles
 

Obama plays fast and furious with oil production data

Commentary by James H. Shott

President Barack Obama calls fossil fuels – coal, oil and natural gas – the “fuel of the past,” and heralds wind, solar and algae as the fuels of the future. But he ignored talking about the fuel of the present, as if it really doesn’t matter. But it does matter. The fuel of the present must exist in sufficient quantity, with sufficient infrastructure to get it to consumers, and be affordable. And there is only one source that meets those requirements: fossil fuels.

Despite his apparent disregard of this obvious fact, it does not take a rocket scientist, a community organizer, or even a law school lecturer to understand the importance of today’s situation: Fossil fuels work; green energy does not.

Favoring an impossible scenario, Mr. Obama resorts to being the class clown, offering playground humor to deflect the harsh criticism his foolish energy policy has earned. He told a fawning audience, "So do not tell me that we're not drilling. We're drilling all over this country. There are a few spots we're not drilling. We're not drilling in the National Mall. We're not drilling at your house."

Now, that’s a real knee-slapper. But the joke’s on those that believe this hogwash, and dream of plentiful wind farms standing motionless among dead birds waiting on a breeze, and seas of solar panels waiting in the dark for a cloudless sunrise.

Mr. Obama might have mentioned that we also are not drilling for oil off the Mid-Atlantic coast, off the Florida Gulf Coast and generally in the Gulf of Mexico, in the Arctic National Wildlife Refuge, on federal lands in the Rockies. You know: places where billions of barrels of American oil await an American company with American workers operating drilling rigs. In these areas, drilling leases are down 70 percent under the Obama administration’s fairy-tale energy strategy. And while the president yuks it up in campaign appearances, Americans still get pummeled at the gas pump and are ignored in the presidential narrative.

But humor was not the only trick up Mr. Obama’s sleeve. He also slipped in a large dose of taking credit where credit is not due, and added a substantial measure of distorted facts. “Under my administration, America is producing more oil today than at any time in the last eight years. That's a fact. That's a fact. We've quadrupled the number of operating oil rigs to a record high. So do not tell me that we're not drilling. We're drilling all over this country.”

Well, sort of. While that statement may be technically true, it turns reality on its head. By saying “under my administration” he suggests that it is because of his policies that drilling has increased. Actually, he had absolutely nothing to do with the policies that prompted all that drilling, which is being done on private land where he cannot stop it, as he has with drilling on federal lands. Oil production has increased in spite of his policies, not because of them. For the increase in drilling he can correctly blame George W. Bush.

The president should have stopped with the ridiculing of the clear thinkers who want to harvest our own oil and natural gas and build energy independence. But he just had to distort more facts for good measure. “America uses more than 20 percent of the world’s oil,” he declared. “If we drilled every square inch of this country …. we would still have only two percent of the world’s known oil reserves.”

Not so fast, Mr. President. The Institute for Energy Research reports that “in classic fashion, he’s using a technicality to skirt the facts and keep the myth of energy scarcity alive. The reality is that the U.S. has enough recoverable oil for the next 200 years, despite only having 2 percent of the world’s current proven oil reserves.”

Even The Washington Post decries the president’s tactic. “The president should drop this fact … or he runs the risk of misleading Americans about the extent of the U.S. oil resources.” It’s too late; he has already misled us.

According to the American Petroleum Institute’s online publication, Energy Tomorrow: “The market sees 87 percent of our offshore acreage off-limits, it sees Federal permits lagging in the areas we are allowed to develop in, both offshore and onshore.  It sees a million barrels a day from ANWR sitting on the sidelines, and it sees the U.S. blocking upwards of 800,000 barrels a day from Canada. The market sees that the U.S. could secure 100 percent of its liquid fuel needs by 2024.”

The CIA World Factbook lists the U.S. third in world oil production in 2011 at just below 9 percent of the total, a little behind Russia at 10.06 percent, and Saudi Arabia at 12.01 percent.

Apparently, Mr. Obama feels comfortable spreading falsehoods to the public, knowing that his fawning followers will believe anything he says, and the media, paralyzed by his charm, will not fact-check what he says.  But while he’s busy being fabulous, wowing the throngs, the country continues to suffer under punishing unemployment and gas prices predicted to set new records this summer.

Cross-posted from Observations

Barack Obama’s ideology produces pain for the American people

Commentary by James H. Shott


As President, Barack Obama has shown the occasional capacity to recognize good policies when he sees them.

As a candidate for president, Mr. Obama continuously condemned George W. Bush for the Guantanamo Bay enemy combatant facility, for enhanced interrogation techniques, rendition, black site interrogation facilities, virtually everything else the nation was doing in the “War on Terror,” and also for the wars in Iraq and Afghanistan. That technique played well with voters and helped him win the election.

But as president he learned that things look different from inside the Oval Office than from outside on the campaign trail, and he used and benefitted from those same anti-terrorism policies he so bitterly criticized in finding and disposing of Osama bin Laden.

If he can recognize and utilize successful policies in the areas of war and terrorism, he ought to be able to also do so in other important areas, such as economic policy and energy policy, particularly when the two are so critically important and so inextricably linked. And surely he understands that an unemployment rate above 7.0 percent, two full points below where it stands today, will sink his re-election in 2012.

Yes, the election is 19 months away, an eternity in politics, and a lot can happen. But none of the president’s leftist/socialist efforts to turn the economy around has accomplished much, and he shows no signs of getting government out of the way so that the economy can fix itself, as it has always done when government stays out of the way.

The White House keeps publicizing the number of jobs created each month, but notice that the unemployment rate has been above 8.0 percent since Mr. Obama took office, as high as 10.1, and it rose again to 9.0 in April. The more important number is the U-6, which includes those who are unemployed, underemployed, and who have given up looking for work. That number is 16.6 percent.

Creating jobs is obviously important, but maintaining existing jobs is just as important, and the Obama policies have failed spectacularly in that regard. We’re told of the thousands of new jobs created each month, but the unemployment rate is still 80 percent above normal levels. Unemployment rates were below 6.0 percent every year but one from 1995 through 2008.

Tim Cavanaugh notes on Reason.com that “less than a year after the trough of the 1958 recession, the economy had reversed an unemployment spike of more than four percentage points,” and “in 1981-1982, job growth more than erased a 3.1 percentage point increase in unemployment within 11 months, leaving the rate lower than it was before the recession.” The Obama solutions are not working.

Furthermore, the Obama administration’s moratorium on offshore drilling is not only keeping thousands of American oil industry workers on the unemployment rolls; it also deprives governments of needed revenue, and that problem will grow unless new drilling leases in the Gulf of Mexico are sold this year and drilling resumes.

After the Deepwater Horizon explosion in the Gulf last spring, the Obama administration issued a moratorium on all drilling, suspending 33 separate projects in various stages of development, halting new lease sales and suspending permitting on existing leases, producing a decline of an estimated 240,000 barrels a day in oil production in the Gulf this year, according to the U.S. Energy Information Administration. The Heritage Foundation’s Rob Bluey estimates that this loss of royalties, lease bids, and taxes “represents billions of dollars in potential revenue that could help close the federal deficit.”

Mr. Obama lifted the moratorium last October, but since then virtually nothing has changed; oil companies are faced with a deliberate slowing of the permitting process. This year could be the first since 1965 that the federal government did not sell leases in the Gulf.

Policy over-reactions like the drilling ban impede the recovery and keep unemployment high. This one also reduces the world-wide supply of oil.

Less American oil in the system lowers the world supply and pushes oil prices higher; the higher the price of oil, the higher the price of gasoline; the more expensive gasoline becomes, the more pain the American people feel and the less objectionable those inefficient and expensive electric cars and hybrids that Mr. Obama loves so become.

“Never let a crisis go to waste,” the theory goes, and the administration is still trying to shove immature, undeveloped, inefficient and expensive green energy down our throats. Now the administration is promoting a transportation authorization bill that would require the study and implementation of a plan to tax automobile drivers on how many miles they drive. More pain from the Obama administration in its attempt to force green energy on the American people.

We would not put an adolescent into any position of responsibility, but that is precisely what Mr. Obama is attempting to do with regard to his green energy vision.

If the president can understand how sensible and effective the anti-terror policies of George W. Bush are, he ought to be able to understand that “green” technologies will be naturally and enthusiastically accepted when they are practical and make economic sense.

Cross-posted from Observations