The Ryan Pick

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With his selection of Representative Paul Ryan of Wisconsin as his running mate, Mitt Romney has decided the 2012 presidential election. Barack Obama will be reelected president of the United States.

Ryan, the chairman of the House Budget Committee, brings Romney needed credibility with conservatives. Indeed, over the past few days establishment conservatives have been waging a pick-Ryan campaign in the media, and probably behind the scenes with Romney’s people as well. Ryan is a serious figure intellectually, and commands respect within establishment political circles. But he has spent over a decade in Congress, and as a result is viewed with some skepticism by Tea Party types. He will not excite the yahoo wing of the party as Sarah Palin did in 2008.

But just how much Ryan solidifies Romney’s support from the base is beside the point. Indeed, the Ryan pick shows just how out of touch Romney is with political realities. Conservatives were going to hold their noses and vote for Romney anyway, because they hate Obama. What Romney needed was a VP pick who would help him win over independents, particularly women. Ryan doesn’t do that. But the damage the Ryan pick does to Romney goes beyond this.

The problem is Ryan’s plan for Medicare. I’m not going to discuss the merits of the Ryan plan here; this is a piece about electoral politics. The Ryan plan will be pounded day in and day out by Democrats. By November Ryan and Romney will literally look like losers, irritable and worn from weeks and weeks of defending a plan that most people (and all oldsters) will perceive as the evisceration of a sacrosanct entitlement. Even people over 60 who belong to the Tea Party believe that their Medicare benefits must be preserved, no matter the cost.

Romney’s people may believe that Ryan will bring them Wisconsin, and winning that state becomes a bit more likely with Ryan on the ticket. But it’s still very much a reach for the Republicans. Scott Walker’s success in surviving the recall election earlier this year is not likely a harbinger of Republican prospects in November. Many Walker voters who were standing up against Wisconsin’s public employee unions (i.e., voting their pocketbooks), will not support cuts in Medicare and Social Security.

Had Romney been looking to pick off a battleground state, he should’ve picked Rob Portman of Ohio. Ohio is bigger than Wisconsin, and Republicans had a decent chance of carrying the state. Portman might have put them over the top there. The Ryan pick places Ohio more firmly in the Democratic column.

I originally thought that Romney would pick a woman or a Hispanic (Marco Rubio), because he lags badly with both groups. I did an analysis in June that gave President Obama 22 states and the District of Columbia with a total of 270 electoral votes, the minimum needed to win. With five months to go the election was clearly very much up for grabs. I thought then that Romney would pick Portman, as Ohio is a state Romney needs to win if he is to prevail. With the selection of Ryan, Romney has probably lost Ohio and Florida, which in June I had going to the Republicans. If Romney loses both Ohio and Florida, there is no way he gets to 270 electoral votes.

The idea that major structural reform of Medicare and Social Security will play politically, in a time of economic uncertainty and widespread voter despair, is utter nonsense. Yet that is what Romney apparently believes, based on his selection of Ryan. Romney truly is out of touch with reality. His dippiness was already apparent in his views on foreign policy. His economic policies — on tax reform, job creation, and yes, entitlement reform — were in fact far more sensible than anything put forward by the Democrats, and this constituted his main advantage over Obama. But by placing radical reform of Medicare and Social Security in the forefront of the political debate — that is, by picking Paul Ryan — Romney has cost himself the election. The only question now is how big Obama’s margin will be.




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Pulling Into Santa Cruz

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I’m down in California for a few days while my middle daughter attends a basketball camp at UC Santa Cruz. It’s been a pleasant trip, so far. And a window into the Golden State’s economic devolution.

If you’re not familiar with it, Santa Cruz is located on California’s central coast, south of San Jose and north of Santa Barbara. It’s a short drive from Carmel, where Clint Eastwood once served as mayor, and the famous Pebble Beach golf course. Some people consider this area the most scenic in the world.

Santa Cruz is the University of California’s “hippie” campus. A late addition to the UC system, Santa Cruz allows students great leeway in the courses they take; at one point, it offered a variation of the Great Books program that emphasized reading primary documents from various points in history, but that program has either vanished entirely or atrophied so severely that it’s unrecognizable.

The school’s sports teams are called, with knowing irony, the Banana Slugs. While most UC campuses compete athletically at the NCAA Division I level, the Slugs compete at the more laid-back Division II level.

When I checked my daughter in to the camp, I recognized parents of the aspiring college athletes — not the individuals, specifically, but their type. Driven, detail-oriented and deeply involved in their daughters’ prospects. They knew all about the head coach’s background and repeated his camp’s promise of an intimate setting and individualized attention to each young player. True to this promise, the coach was there when we all arrived and took a few moments to chat with each player and her family.

Some of the parents did recognize each other, literally. They compared notes about camps as far away as Texas and the East Coast. And these plugged-in parents were impressed that, even though the UC Santa Cruz camp is relatively small, it has attracted a corporate affiliation with the athletic gear giant Nike.

“We went to the Stanford camp and it’s just a factory,” one carefully-appointed mother said. “I mean, you can tell right away which girls they’re interested in. The rest are treated like cattle.”

There are two strategies among parents of young basketball players for drawing the attention and scholarship money of college teams. The first strategy is to put the player on a private club team that plays in tournaments and exhibitions to which college coaches and recruiters are invited. The second strategy is to attend summer camps hosted by target colleges and hope that the player makes a good impression.

At least twice, I saw trim middle-aged men wearing tie-dyed t-shirts climbing out of German cars that cost more than most people’s houses.

The two strategies tend to be mutually exclusive: the first is, in my opinion, somewhat passive; the second, a little more proactive. And the parents pursuing each tend to reflect the corresponding attitude.

After I checked my daughter in, I kissed her goodbye for a few days and headed out. There’s an important line between being involved and being a pushy “helicopter” parent. Even though my daughter’s just 16, I want her to stand on her own.

The city of Santa Cruz is pretty, perched on hills immediately above the Pacific Ocean. It has a mix of classic California bungalows and larger, vaguely Victorian houses. The commercial blocks demonstrate the carefully composed shabby chic common to high-end college towns. No Starbucks . . . but lots of locally-owned, even more precious coffee shops, with chalkboards announcing specials and damning — suicidally — the 1%.

The people are carefully composed, too. At least twice, I saw trim middle-aged men wearing tie-dyed UC Santa Cruz t-shirts climbing out of German cars that cost more than most people’s houses.

I was staying a few miles south in Watsonville, where I was able to Priceline a decent hotel here for less than half of what I would have paid for a worse place in Santa Cruz.

Watsonville is a working-class place aspiring to the middle class, full of big-box stores and chain restaurants. And, while Santa Cruz is predominately white, Watsonville is overwhelmingly brown.

There are long lines for just about everything in Watsonville — at the grocery store checkout, at Starbucks, at the bank. Getting dinner at a Panda Express, I instinctively asked the woman across the counter for dos entrees because that’s how everyone in front of me had done it.

Watsonville’s houses are smaller and more cheaply built than those up the road in Santa Cruz. The cars are older and more likely to be dented or discolored. In general, Watsonville has more in common with inland agricultural towns like Gilroy or Fresno. Most of the residents seem to be simple people, content with basic material comfort.

Watsonville has a number of big, ugly modernist government buildings. Its library, especially, looks terrible. The outside walls are adorned with giant faces, meant to represent the local “community.” The city is heavily Hispanic, so it’s no surprise that most of the giant faces look that way; but there are almost as many black faces pasted on the library. And I’ve seen few black people in the city or its stores and restaurants.

Most of all, the giant faces are ironic — and not in a knowing way, like the UC Santa Cruz Banana Slugs.

In my business, I’ve watched libraries shrivel up as a market segment, rendered less relevant by the Internet and cheap ebooks. In their fear of irrelevance, they’ve resorted to all sorts of odd outreach efforts. The giant faces on the Watsonville library are a fundamentally illiterate way to try to draw people into a place that’s about reading. And, in this inappropriate illiterate appeal, the faces are profoundly condescending.

The Porsche-driving leftists in Santa Cruz may be interested in reading hand-lettered coffee shop menus laced with wordy political screeds, but Watsonville is more interested in shopping at Target. When the economy in California eventually recovers, I suspect that recovery will have more to do with Watsonville than Santa Cruz.




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Government Motors Goes Subprime

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President Obama continues pointing to his crony bankruptcy bailout of GM as a success. Never mind that it stiffed the secured creditors to favor the UAW, a huge backer of Obama and the major cause of the domestic auto crisis to begin with. Never mind that that GM was allowed to carry forward losses from the bankrupt entity to offset future earnings, stiffing the taxpayer and giving it an unfair advantage over Ford and the foreign auto makers, none of whom got the bailout. Never mind that when GM went public again, the UAW was able to sell its shares first, which enabled it to be made whole while the taxpayers saw their shares diminish in value.

Now it turns out that much of the recent sales growth GM has bragged about is due to GM jacking up its sales with subprime loans.

In the auto industry (like other industries that sell products and offer financing to the customers), the credit worthiness of customers is judged by their FICO scores, which range on a scale from 300 to 850. Subprime customers are those with a score below 660. In the fourth quarter of 2010, subprime loans accounted for 4.8% of GM’s sales. In the first quarter of this year, they hit 8.32%, which is over one-third higher than the industry average (6%).

Why is GM taking on more risky debt in a chancy economy? Edward Niedermeyer (editor of The Truth About Cars) puts his finger on it: “[GM] may be trying to goose short-term sales with subprime lending to boost its stock price, which is tied to the government getting out of its GM investment.”

Indeed. The federal government still owns nearly 30% of the stock (500 million shares). The stock price is only about $20 per share, close to the post-IPO low. For us to get our $26 billion in direct support back, the price would have to hit $53 per share.

So GM — controlled by the Obama administration — is pushing junk loans. This is rich, coming from the same guy who sold the Dodd-Frank financial regulation bill by claiming that greedy capitalists had duped innocent buyers into risky subprime loans.

What’s greedy for capitalists must be ethical for neosocialists.




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You Didn't Build That Bridge, Mr. President

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I was so distracted by the president's demeanor as he was reproaching the business community that his words didn't quite register. I had to go back to read what he actually said, and it was worse than I thought:

“If You’ve Got a Business – You Didn’t Build That! Somebody Else Made That Happen.”

Well, apparently it bears repeating: When I, an entrepreneur or businessman, start a business, it usually takes years of persistent work before there is any return on investment: contrary to what you may have heard from modern-liberal bureaucrats, you cannot succeed in business without really trying. I suppose it's true that such an endeavor wouldn't have succeeded had I not been standing on centuries of mercantile tradition and experience, or for that matter had I not had electricity and running water. But that is only to state the obvious.

What, then, was the president getting at? Besides belittling the aspirations of the business class, what was the subtext of his remarks? That government provides the conditions for a civil society that make entrepreneurship possible? I think we already knew that. Newsflash, Mr. President: to the extent that I contribute to the commonweal, pay taxes, keep abreast of the issues, and vote, I am a member of that government. In other words, the agent or silent partner of my labors, the "somebody else [who] made that happen," was me.

Pericles is always relevant in this regard. In his funeral oration, as presented by Thucydides, he said,

Here each individual in interested not only in his own affairs but in the affairs of the state as well: even those who are mostly occupied with their own business are extremely well-informed on general politics — this is a peculiarity of ours: we do not say that a man who takes no interest in politics is a man who minds his own business; we say that he has no business here at all.

Perhaps this is what Lincoln was also getting at in the final flourish of the Gettysburg Address: "that government of the people, by the people, for the people, shall not perish from the earth."

There has always been some mystery surrounding his use of the words, "of the people." It is obvious that a government by the people is one run by commoners (as opposed to the landed aristocracy), and that a government for the people is one devised for the benefit of everyman (not just a hereditary class of kings or oligarchs), but what exactly did Lincoln mean by a government of the people?

I believe he recognized that insofar as we work, pay taxes, stay informed, and vote, we are not simply passive participants in the democratic process, but constitutive of democratic government itself.

So why do politicians insist on the obsolete dichotomy of government and governed? Is it because the citizenry need leaders to translate their will into effective policies? Or is this an elitist plot to exclude everyman from the esoteric operation of government? If the latter, I have a few words for you prodigies of incumbency occupying the plush seats of government: you didn't build that bridge or that superhighway. Somebody else made that happen.




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OMG! The Free Market Works!

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An unintentionally hilarious piece recently appeared in the Pravda of contemporary progressive liberalism, The New York Times.

This lachrymose report laments the fact that major public school districts around the country are losing customers — oops! students — and the result is layoffs. Of teacher union members, no less! Quelle horreur!

Between 2005 and 2010, Broward County (FL), Chicago, Cleveland, Columbus (OH), Detroit, Los Angeles, Philadelphia, San Bernardino, and Tucson have all lost students, some massively.

The article tells some tragic tales. LA let go of 8,500 teachers in the face of an enrollment drop of 56,000 students. Mesa Unified District lost 7,155 students and had to close four middle schools and lay off librarians — the ultimate evil.

The cutbacks are threatening offerings in art, foreign languages, and music.

But to what do the authors of this mournful article attribute this decline? They mention declining birthrates, unemployed parents moving elsewhere to find work, and illegal immigration crackdowns. But they also mention — tentatively and skeptically — the movement of students from regular district schools (essentially run by the teacher unions) to charter schools (run more or less autonomously, i.e., not under the unions’ thumb).

In Columbus, enrollment in charter schools rose by 9,000 students while enrollment in the public school district dropped by 6,150. One honest parent explained, “The classes were too big, the kids were unruly and didn’t pay attention to the teachers.” So she sent her dyslexic daughter to a nearby charter school, where — GASP! — “one of the teachers stayed after school every Friday to help her.”

In an institution where pleasing the customer is actually important, it’s no surprise that her daughter received the help she needed.

Nationwide, while the number of kids in regular public schools dropped by 5%, the number in charter schools rose by 60%.

Naturally, the public school system special interest groups — greedy unions, self-righteous teachers, callous administrators, and so on — are hysterical. For example, one Jeffrey Mirel, an “education historian” at the University of Michigan, bleated that public schools are in danger of becoming “the schools nobody wants.”

Wrong! Public schools have been for some timethe schools that nobody wants. Before the 1960s, teachers unions either didn't exist or — where they did — didn't exert the control they assumed in the 1970s. Teachers unions run schools for the benefit of their members only. So the problems started accelerating.But what’s happening right now is that some few lucky kids are being given the choice to get out — and they’re taking it.




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Populist Fizzle

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The Obama campaign and the DNC appear increasingly desperate in their attempts to find some attack on Romney that resonates with the American people. They’re desperate, of course, because the economy continues to drift in the doldrums, and the election looms.

The latest is a populist ploy. Key Democratic politicians started attacking Romney for having invested in foreign companies and having assets in Swiss and other offshore accounts. This was immediately trumpeted by the mainstream media. How dare Romney invest abroad! He’s the pioneer of offshoring!

Now, it is by no means illegal — yet — to put some of your portfolio into foreign assets, and it is in all the “Investing 101” books that you ought to do so. You need to diversify your assets to minimize risks, and this may include diversifying outside your home country. Putting money in a Swiss account, for example, is a good hedge against inflation, given the historic stability of the Swiss monetary system. But the Dems are banking on the fact that the average person doesn’t understand all this — and that is a very good bet.

Alas, however, the attack fizzled when it was discovered that Rep. Debbie Wasserman Schultz (D-FL), chair of the DNC, had herself invested abroad, repeatedly. She invested in the Davis Financial Fund, with holdings on the State Bank of India, as well as a Swiss private banking group. She also invested in the Fidelity Advisor Overseas Fund, which has holdings in HSBC (a British bank), Novo Nordisk (a Danish drug company),VW, Rakuten (a Japanese shipping firm) and so on.

It also turns out that another person who has invested abroad is the ever-offensive Rep. Nancy Pelosi (D-Venus), “head” (though not the brains) of the House Democrats. She earned millions from her investment in Matthews International Capital Management, which focuses primarily on Asian equities.

Obama, like his spiritual mentor Nixon, is much given to what psychologists call “projection” — calling others what you yourself are. Obama once accused McCain’s campaign of “throwing stuff up against the refrigerator to see what sticks.” Yes, President Obama, and you don't have an infamous "enemies list."

But it looks like this little piece of magnetized crap isn’t sticking. Try again, guys.




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The New Shape of Immigration

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There has been a veritable blizzard of major news stories lately. Between the continuing crisis of the European Union, the spate of major rulings from the Supreme Court, and the continuing presidential election campaign, we’re all a bit overwhelmed.

But a recent report from the Pew Research Center bears immigration news worth noting and commenting upon.

The report, aptly called “The Rise of Asian Americans,” is a hefty tome indeed, at 215 pages chock full of data. It reveals that for the first time in history, the plurality of all new American immigrants now hails from Asia — primarily China (23.2% of all Asian Americans), India (18.4%), Japan (7.5%), Korea (9.9%), the Philippines (19.7%), and Vietnam (10.0%).

As recently as 2007, the plurality of immigrants was Hispanic, primarily from Mexico. That year, 540,000 immigrants were Hispanic, compared to 390,000 Asians. But in 2010, Asians were 36% of new immigrants, while Hispanics dropped to 31%.

This culminates the decade-long, precipitous slide in Hispanic immigration, which was at 1.2 million in 2000, fell to about half that in 2002, went up to about 800,000 in 2005, and has dropped steadily since, to less than 400,000 in 2010.

By contrast, the number of Asian Americans quadrupled between 1980 and 2010, and now stands at 18.2 million, counting native- and foreign-born, adults and children. (The Pew Center’s count is slightly higher than the Census Bureau’s, with the difference being that Pew counts people with only one Asian parent as Asian. That is nearly 6% of the population, quite a rise from the 1% it was back in 1965. (By comparison, non-Hispanic whites are 63.3%, Hispanics are 16.7% and blacks 12.3%). The report projects that by mid-century, the number of Asian Americans will hit 41 million.

Of course, this is just a projection by the Pew Center, which is certainly reputable, but obviously fallible. Still, these figures are suggestive.

The reasons for this shift are varied. There are relevant demographic shifts abroad, such as the drop in the birth rate in Mexico, which as recently as the 1960s was one of the highest on the planet, with the average woman having nearly seven children — higher even than Indian and Chinese women — but now is roughly the same as the US rate (a little over two children per average woman).

But the report mentions what is clearly the major factor: our nation’s continuing shift from a manufacturing to an epistemic or knowledge-based economy. Blue-collar jobs, especially the low-skilled ones, simply have been increasingly less in demand over the past quarter-century. And a prolonged recession and slow recovery such as the one we are enduring only increases the gap in employment levels between blue- and white-collar workers.

So the disappearance of a lot of blue-collar jobs, especially in construction, has meant that more opportunities have opened for Asian immigrants, who tend to have higher educational attainment than recent Hispanic immigrants.

Add to this another factor: we have tightened the southern border, which means that Asians, who tend to get more student and high-tech (H1-B) work visas, are now in a better position to come here.

A major factor in their success is the fact that Asian Americans have a lower rate of single-parent households than does the population as a whole (20% versus 37%). They are more likely to be married than is average for Americans (59% versus 51%), and have fewer births to single mothers (16% versus 41%).

However, of paramount importance is the level of higher education. Nearly half (49%) of all Asian American workers have a bachelor’s degree, which is more than half again as many as the average — 28% — for all American workers. For non-Hispanic whites, it is 31%, for blacks 18%, and for Hispanics 13%.

Asian students — both American-born and foreign — tend disproportionately to choose more technical college majors, which is no doubt another factor in their success. In 2010, they received 45% of all engineering doctorates awarded at American universities, 38% of all computer and math doctorates, 33% of all physical sciences doctorates, 25% of all life sciences doctorates, and 19% of all social science doctorates.

Since Asians are culturally very inclined to pursue higher education, and since the US has an extensive but still relatively inexpensive source of higher education, and again since our economy is increasingly knowledge-based, it is no surprise that as a group Asian-Americans are moving sharply upward economically.

That rise has been as dramatic as it has been rapid. Asian Americans now have the highest median household income of any broad American ethnic group — European Americans included. Asian-American households average $66,000 a year, nearly a third higher than the median of all American households (which is $49,800). Whites average $54,000, Hispanics $40,000, and blacks $33,300.

Among Asian Americans, median annual family income varies. Indians average $88,000, Filipinos $75,000, Japanese $65,390, Chinese $65,050, Vietnamese $53,400, and Koreans $50,000. But all this is quite remarkable, considering that according to Pew’s figures, nearly three-fourths (74%) of Asian American adults were born abroad.




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It’s a Gas

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The massive growth in the production of natural gas, the result of using unconventional sources and methods (mainly the fracking of shale deposits) continues to demonstrate how free markets can transform the world, even in the face of statist oppression.

Two recent Wall Street Journal pieces illustrate this anew. The first reports that another industry is now converting its vehicles from diesel to natural gas — an industry you might not think of offhand. Ferryboat fleets, both here and in Canada, are making the switch because of the continuing (shale-)rock-bottom prices of natural gas.

From Staten Island to Washington State and British Columbia, ferry fleets are following the lead of Norway, which a decade ago started fueling ferries with liquefied natural gas (LNG).

One attraction of natural gas is, again, its pricing. Natural gas at the Henry Hub distribution center (a standard benchmark for natural gas pricing) hit a low of $1.95 per million BTUs this year, the lowest price in 13 years. This, while diesel skyrocketed by 140% from 2004 to 2011.

A second attraction is that, if spilled, LNG doesn’t form a toxic slick that requires costly cleanup, even as it should be so unfortunate as to kill off wildlife, or tourists, or both.

Third, LNG is actually less likely to be unfortunate, because it is less inflammable than diesel.

Of course, the switch will take time and upfront investment — as for instance, to build plants to chill and compress the gas, and new holding tanks for the ships. But the cost savings make the decision obvious, even if the timing isn’t.

The second WSJ piece is of more — shall I say — global importance. It reports that more and more US utility plants are switching from dirty coal to clean natural gas, not because of EPA coercion, but because of the coercion of free-market pricing.

Coal consumption by American power companies dropped by 18.8% in the fourth quarter of last year, compared to the previous quarter, and 9.4% compared to the fourth quarter of the year before. Again, the switch was driven by the drop in natural gas prices.

Peabody Energy, one of the biggest coal producers in the world, now estimates that American coal demand will drop by 10% this year, or 100 million tons.

The free market is helping to reduce air pollution. Obama, are you paying attention?




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Neo-Socialism: The Results Are In

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Despite his campaign promise to govern as a moderate, President Obama has aggressively pursued what can only be described as neosocialist economics. This is a system of governance within which the government essentially runs business, but not in its own name — so that when failures occur, it can disown responsibility and blame business instead. It is a new and “improved” socialism, so to say.

The program has included outright government takeovers of most of the auto industry and the student loan industry, massive new control of the financial industry, near total control of the health industry, near total dominance of the energy industry, stimulus spending bills (often favoring campaign donors), housing bailouts, cash for clunkers, cash for weatherproofing, and so on. All of this is Obama’s doing. So is the $5 trillion he has added to the national debt — pushing us past France in debt as a percentage of GDP.

The result has been a long, lingering malaise — the Obamalaise — posing as a “recovery.”

The latest jobs report starkly illustrates the failure of Obamanomics. It shows that last month the economy — in the third year of an economic recovery — created a ludicrous 80,000 jobs. Considering that the economy needs to create about 125,000 new jobs each month just to keep up with population growth, this was a profoundly pathetic report card. The unemployment rate stayed at 8.2%, only because — again — more people dropped out of the work force.

Worse, of the 80,000 jobs created, 25,000 of them — nearly a third — were temp jobs.

Even worse, in June, while a net 80,000 jobs were created, 85,000 people went on federal disability! Yes, more people got on the SSDI disability rolls than got productive jobs. Indeed, since June 2009, while Obamanomics has created 2.6 million jobs, it has put nearly 3.1 million new people on SSDI disability. Moreover, a whopping 275,000 additional people have applied for disability. Obama is truly the Disability King.

Add to this the fact that yet more people went on food stamps, cementing Obama’s rightful title as the Food Stamp King. In fact, from June 2009 to April of this year, the number of food stamp recipients exploded upwards by 11.3 million, or nearly a third.

Amazingly, while Obama has his highest support among blacks, followed by Hispanics, and his lowest support among whites, it turns out that white unemployment stands at 7.4%, Hispanic unemployment at 11%, and black unemployment at a gut-wrenching 14.4%.

The general unemployment rate has now been over 8% for 41 months in a row, which sets another new record — one that beats all previous administrations over the last six decades. And the length of time the average person has been unemployed under Obama’s “recovery” has been 20.6 weeks, completely eclipsing the earlier record of 10.5 weeks.

If the labor force participation rate were now what it was when this neosocialist administration took power, the unemployment rate would be 10.9%. It is only as “low” as it is because many people have stopped “participating” (i.e., looking for jobs).

Three years of Obamanomics recovery has created job growth of 75,000 a month on average, or 2.6 million in total. By contrast, Reaganomics (neoliberalism) over the same length of time averaged 273,000 a month, or 9.8 million in total.

Of course, the nation was smaller then. If we correct for population size, the Reagan neoliberal recovery produced the equivalent of 360,000 jobs a month over the same period, or a total of 13 million.

The “recovery” brought by Obamanomics created a total expansion of real GDP of only 6.7% over eleven months. Again, by comparison, Reaganomics brought a total expansion of real GDP of 17.6% in the same period — or well over two and a half times as great a growth rate.

So what shall we call the president: The Disability King? The Food Stamp King? The Long Term Unemployment King? The Slow Growth King?

Perhaps “the clown-prince of neosocialism” will do.




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Up in Smoke

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With the recent release of yet another dismal jobs report, commentators in the MSM have begun to ask, “Why aren’t jobs being created?” They should have been asking themselves this question for the last 40 months, but, hey, better late than never.

Yet the possibility that the explosive growth in regulation might play a role in deterring job growth is not something they spend much time discussing.

It should be.

A recent story gives us a fresh illustration of the role that regulation plays in destroying jobs. (By “regulation,” I mean all increases in statutory law, rulings by regulatory agencies, and expansions of common law aimed at controlling business activity.) It concerns a business that I, a nonsmoker, never heard of, one that has never been destroyed by regulation.

It turns out that in the face of huge taxes on cigarettes produced by the major tobacco companies, many cigarette smokers started frequenting small stores that owned “roll-your-own” (RYO) cigarette machines. The RYO machines allowed customers to buy loose tobacco, especially pipe tobacco (taxed at a far lower rate than manufactured cigarettes) and paper tubes in the shop, and use the RYO machine to churn out a carton of cigarettes in just a few minutes.

For a devoted smoker, the attraction of RYO shops is clear. They save about half the price of regular cigarettes. And they allow smokers to blend different and more flavorful tobaccos together, and use both tobacco and paper that are free from many of the chemical additives.

But naturally, the attractiveness of the shops angered two powerful groups. First, it pissed off puritan “progressives” who just cannot stand people smoking, and are always conducting an anti-smoking jihad. Not content with insane taxes on people who choose to consume a lawful product, they want to stop it altogether.

Second, it pissed off the major cigarette makers — aka Big Tobacco — who hate seeing customers choosing to buy cheaper in little shops around the country.

So in a classic case of rentseeking (businesses manipulating the regulatory system to hurt their competition, rather than producing a better or cheaper product) Big Tobacco found a politician — the truly execrable Sen. Max Baucus (D-MT) — to insert a small amendment to a massive transportation bill that redefines RYO shops so that they fall under the same category as Big Tobacco cigarette manufacturers, thus imposing a massive tax increase on them — one that is intended to destroy them, and probably will.

Baucus of course was happy to do this for the campaign cash Altria and other Big Tobacco companies shoveled at him. And those Big Tobacco companies are happy to stomp out of existence a group of little competitors. And Obama — who never met a regulation he didn’t like — was happy to sign the bill.

But the small businesses that bought the RYO machines have been screwed. Over a thousand of these machines (they cost over $36,000 each) were purchased, but are now virtually useless.

So, for example, Robert Weissen and his partners, who own a chain of six RYO shops in Las Vegas (cheekily named “Sin City Cigarette Factory”), says he will have to shut down the machines and lay off 40 people.

There are eight million regulations in our “progressive” (i.e., neosocialist) economy. This has been the story of just one of them.




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