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Archive for January, 2010

I am happy to see the government report a 5.7% increase in GDP for the 4th quarter of 2009. Undoubtedly, Team Obama will cite this as evidence that the Jobs Bill (formerly known as “The Recovery Act,” formerly known as “The Stimulus Bill”) is working.

As good as this news is, there is an elephant in the room, and that’s the 10% unemployment rate.

You may not know it, but I was once a CEO in the Supply Chain business. In particular, I worked very closely with some of the largest corporations in the world as they weathered the 2001 recession. Thanks to new business systems, these corporations had the ability to change their business plans in weeks to dramatically cut costs; literally close down bad business lines and expand profitable ones within a few months. Far too often, this meant expanding business outside of the US and laying off high priced American workers.

Obama and the democrats may call this greedy, but the tens of millions of Americans who have invested their retirement savings in the stocks of these companies say – THANK YOU!

I can also tell you that these companies all reacted negatively when Tom Daschle (former democrat majority leader in the senate before Harry Reid) initially blocked Bush’s attempt to lower taxes and offered up a $600 check to all Americans as an “economic stimulus.” It didn’t work, just like Obama’s “$8/week tax cut for 95% of all Americans” didn’t work. (more…)

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DJH: Much has and will be written about “fact checking” last night’s State of the Union Address. In fact, I link to two very good articles at the end of this piece. But facts and fact checking get tedious after a while, so rather than break down the 20-30 alleged facts Obama spewed last night and try to expose his deceit to you, I’d rather just focus on the 3 most outrageous moments.

1. Alito’s Joe Wilson Moment: If you watched the State of the Union Address last night, you saw Supreme Court Justice Samuel Alito mouth the words “not true,” when Obama said:

“With all due deference to separation of powers, last week the Supreme Court reversed a century of law that I believe will open the floodgates for special interests –- including foreign corporations –- to spend without limit in our elections. I don’t think American elections should be bankrolled by America’s most powerful interests, or worse, by foreign entities. They should be decided by the American people. And I’d urge Democrats and Republicans to pass a bill that helps to correct some of these problems.” (Watch VIDEO).

This is an outrageous moment because what Obama said was so untrue. Obama’s claim doesn’t hold water for two reasons. First, businesses have traditionally contributed equally to both democrat and republican candidates, so there is no big advantage going to the republicans from this ruling.

Second, what is not widely reported in this story is the fact that unions were exempt from the old campaign finance laws that were recently overturned and unions have traditionally contributed 92% of their campaign contributions to democrats! So. if anything, the SCOTUS ruling levels the political playing field (The Truth about Contributions.)

These aren’t the only reasons why this was so outrageous. Obama’s claim that this ruling would open out campaign contributions to foreign governments is truly mind boggling. The fact is that many have charged that his 2008 campaign coffers were stuffed by foreign contributions . The Obama campaign arrogantly refused to document “because there were just too many!”

2. Small Business Capital Gains Tax Break – This was clearly designed to be an applause line, but the underlying truth behind this concept is totally outrageous. In case you didn’t know, The Capital Gains tax only comes into play when someone sells an ownership in something that has increased in value. It is a huge factor in the stock market, where people buy a stock today and sell it down the road for a “capital gain.”

When it comes to small businesses, the concept is almost irrelevant. Very few small businesses get funded through someone buying stock in their company. Most small business funding comes from loans or personal savings and a capital gains tax cut does nothing to enhance this.

On the other hand, small businesses are about to get hit by a huge tax increase, when the Bush tax cuts are allowed to expire in 2010 by the democrat congress and that’s one of the big reasons why small businesses are not creating any new jobs under Obama, Pelosi, and Reid.

3. The College Loan Break for Public Servants – Finally, the most outrageous proposal Obama made last night was his special break for public servants when it comes to paying back their college loans

Obama said: “Let’s tell another 1 million students that when they graduate, they will be required to pay only 10 percent of their income on student loans, and all of their debt will be forgiven after 20 years — and forgiven after 10 years if they choose a career in public service,” Obama said.

Why on earth should government workers (AKA public servants) get a special break on paying back their college loans? It’s the children of workers in the private sector (Baby Boomers) who are struggling these days. These are “the days of wine and roses” for people who work for the government.

Look at the facts:

  • Government Salaries have Soared under Obama, in fact, the growth in six-figure salaries has pushed the average federal worker’s pay to $71,206, compared with $40,331 in the private sector.
  • In the last 2 years, the government has added 98,000 workers while the private sector has lost 7.34 million jobs!
  • At the end of 2009, the unemployment rate among government workers was a mere 3.6%, well below the level most economists consider to be “full employment.”On the other hand, the people who are truly struggling work in the private sector are with a heartbreaking 10.2% unemployment rate.

Doesn’t this outrage you?

So, I’m not going to lose any sleep worrying about fact checking Obama, I’ll leave that to others, but these outrageous moments in Obama’s speech last night lead me to believe that our careers will not only continue to be stolen in 2010, it may well get worse.

Dave

Main Stream Fact Checking

ABC NewsFact Check: President Obama’s State of the Union 2010

Fox NewsFact Check: How State of Union Compares With Reality

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DJH: About 25 years ago, I made friends with a bunch of firefighters. I remember envying their hours, benefits, and pensions, but at the same time, recognizing that the weekly paycheck they took home was pretty small. Not anyone. Thanks to sweetheart union contracts and the steady rise of COLA, most government jobs pay pretty well these days. In fact, as the story below illustrates, those government workers hailing to Washington DC have faired even better. They are now the fat cats with the big pay checks, except guess who pays their salary — we do. Oh yeah, they still get those sweetheart hours, benefits and life time pensions.

Dave

USA TODAY

By Dennis Cauchon

The number of federal workers earning six-figure salaries has exploded during the recession, according to a USA TODAY analysis of federal salary data.

Federal employees making salaries of $100,000 or more jumped from 14% to 19% of civil servants during the recession’s first 18 months — and that’s before overtime pay and bonuses are counted.

Federal workers are enjoying an extraordinary boom time — in pay and hiring — during a recession that has cost 7.3 million jobs in the private sector.

The highest-paid federal employees are doing best of all on salary increases. Defense Department civilian employees earning $150,000 or more increased from 1,868 in December 2007 to 10,100 in June 2009, the most recent figure available.

When the recession started, the Transportation Department had only one person earning a salary of $170,000 or more. Eighteen months later, 1,690 employees had salaries above $170,000.

The trend to six-figure salaries is occurring throughout the federal government, in agencies big and small, high-tech and low-tech. The primary cause: substantial pay raises and new salary rules.

“There’s no way to justify this to the American people. It’s ridiculous,” says Rep. Jason Chaffetz, R-Utah, a first-term lawmaker who is on the House’s federal workforce subcommittee.

Jessica Klement, government affairs director for the Federal Managers Association, says the federal workforce is highly paid because the government employs skilled people such as scientists, physicians and lawyers. She says federal employees make 26% less than private workers for comparable jobs.

USA TODAY analyzed the Office of Personnel Management’s database that tracks salaries of more than 2 million federal workers. Excluded from OPM’s data: the White House, Congress, the Postal Service, intelligence agencies and uniformed military personnel.

The growth in six-figure salaries has pushed the average federal worker’s pay to $71,206, compared with $40,331 in the private sector.

Key reasons for the boom in six-figure salaries:

• Pay hikes. Then-president Bush recommended — and Congress approved — across-the-board raises of 3% in January 2008 and 3.9% in January 2009. President Obama has recommended 2% pay raises in January 2010, the smallest since 1975. Most federal workers also get longevity pay hikes — called steps — that average 1.5% per year.

•New pay system. Congress created a new National Security Pay Scale for the Defense Department to reward merit, in addition to the across-the-board increases. The merit raises, which started in January 2008, were larger than expected and rewarded high-ranking employees. In October, Congress voted to end the new pay scale by 2012.

• Paycaps eased. Many top civil servants are prohibited from making more than an agency’s leader. But if Congress lifts the boss’ salary, others get raises, too. When the Federal Aviation Administration chief’s salary rose, nearly 1,700 employees’ had their salaries lifted above $170,000, too.

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DJH: I just heard that Obama plans to state in tonight’s State of the Union Address that Americans are mad about the economic woes they’ve been suffering through for the last 10 years. Hello Peabody — let’s get in the WAYBACK MACHINE and check out the state of the economy 4 years ago.

By the way, this story came from the left leaning Washington Post and came out 2 weeks after Pelosi, Ried and the democrats took over congress and starting spending money and raising taxes.

What would you give for an economy like 2006 in 2010?

Dave

Economy Gained Strength In 2006

Growth Dispels Recession Fears

By Nell Henderson

Washington Post Staff Writer

Thursday, February 1, 2007; A01

The U.S. economy turned in a surprisingly strong performance last year, new data show, growing 3.4 percent despite higher interest rates, high oil prices and the sharpest housing downturn in 15 years.

The report from the Commerce Department, showing that economic growth picked up in 2006 from the 3.2 percent growth of 2005, dispelled any lingering doubts about the momentum of the economy going into this year. Many economists predict growth will slow this year, but gone are the recession worries of last summer.

“Nothing, other than an external shock, will derail the economy this year,” said Eugenio J. Alemán, senior economist at Wells Fargo. “The economy’s in good shape.”

Unemployment and inflation fell last year while wages and salaries rose at their quickest pace in five years, according to a series of recent government reports. The reports suggest that troubles in housing and manufacturing, though painful for many people, have not caused the widespread economic damage that many experts had feared.

Federal Reserve policymakers held short-term interest rates steady yesterday, showing they are content — at least for now — with the state of the economy. They left their benchmark rate on overnight loans between banks unchanged at 5.25 percent, where it has been since June. But they indicated that they remain ready to raise borrowing costs if strong economic growth fuels a fresh bout of inflation.

President Bush hailed the news in a speech extolling the strong “state of the economy” on Wall Street, where he was also mobbed visiting the floor of the New York Stock Exchange. “As we begin this New Year, America’s businesses and entrepreneurs are creating new jobs every day,” he said. “Workers are making more money; their paychecks are going further. Consumers are confident, investors are optimistic.”

The bright picture contrasts with the outlook of last summer, when home sales were plummeting and oil was hitting $77 a barrel. Many analysts predicted that consumer spending would stall because of costly gasoline, rising unemployment, and stagnant or falling home prices.

But the economy’s buoyancy reflects two little-appreciated facts. First, the economy is less vulnerable to high oil prices than in the past, for several reasons, including improved efficiency.

Second, while the housing boom did give the economy a boost, the housing bust has not damaged the rapidly growing service industries, which employ about 80 percent of U.S. workers. And those jobs fuel consumer spending, which accounts for 70 percent of economic activity.

“This is not your grandfather’s economy,” said Richard Yamarone, director of economic research at Argus Research. “This is not a smokestack economy. . . . The consumer is the ultimate driver of the economy.”

Economic growth did slow sharply in the spring and summer from a torrid 5.6 percent annual rate in the first three months of the year to a 2.6 percent pace in the second quarter and then 2 percent in the third quarter.

Much of the decline was accounted for by home building, which fell at a 19 percent annual rate in both the third and fourth quarters.

Nonetheless, overall economic growth rebounded in the last three months of the year, with gross domestic product, the value of all goods and services produced in the country, rising at a robust 3.5 percent annual rate.

Unemployment drifted lower through the year, to 4.5 percent in December from 4.9 percent a year earlier. The job market remained tight as employers in health, education, finance and other service industries created many more new jobs than were cut by mortgage lenders, home builders and automakers.

And the economy got a lift as oil prices tumbled to about $61 a barrel by the end of 2006 — about where they had been a year earlier.

Drivers paying less at the pump had more to spend on shopping during the holiday season. Consumer spending rose at a blistering 4.4 percent annual rate in the last three months of the year, the Commerce Department said yesterday.

Falling oil prices helped shave the nation’s import bill at year-end, and strong economic growth overseas boosted demand for U.S. exports. The Commerce Department estimated that the improvement in trade added 1.6 percentage points to the rate of economic growth in the fourth quarter.

Businesses continued to build more offices, factories and other types of nonresidential structures, helping to cushion some of the effect of the housing downturn on construction industries.

And unusually warm weather probably prompted more shopping, hiring and construction than would have occurred in colder conditions, several economists said.

Although some of the year-end momentum reflected such temporary factors, analysts said, the tight labor market bodes well for 2007.

The Commerce Department report “shows you the ability of the economy to ride out the storm of the housing market,” said Wells Fargo’s Alemán. “The rest of the economy is so strong.” Inflation also cooled slightly last year. Consumer prices rose 2.8 percent, a bit less than the 2.9 percent gain recorded the year before, the agency said.

Many economists seek a sense of underlying inflation by looking at so-called core inflation, which excludes volatile food and fuel prices. Core prices rose 2.1 percent in 2006 after rising 2.2 percent in 2005.

The Fed noted the improvement but said in a statement that “inflation risks remain” because of the possibility that the tight labor market will fan price pressures.

A separate Labor Department report yesterday showed that wages and salaries rose 3.2 percent last year, the fastest rate in five years.

Employers’ labor costs — including both pay and benefits — rose 3.3 percent in 2006, up from the 3.1 percent gain in 2005.

Several analysts said the gains should not alarm the Fed. “Employers’ labor costs remain moderate and do not appear to be generating inflationary pressures,” said Jared Bernstein, senior economist at the Economic Policy Institute.

The economy is likely to grow about 2.4 percent this year — more slowly than last year but at a moderately good pace — according to the average prediction of economists surveyed by Blue Chip Indicators, a monthly publication.

Housing is likely to remain a drag on growth. Builders are still stuck with bloated inventories of unsold homes. Unemployment may rise this spring when builders break ground on far fewer new homes.

But several analysts said that despite these lingering soft spots, the Fed appears to have achieved the Holy Grail of central banking — a “soft landing” in which it raised interest rates last year just enough to cool price pressures without triggering a recession.

Now, the central bank is likely to leave interest rates on hold for a while, said Nariman Behravesh, chief economist for Global Insight. “The Fed has the economy where it wants it.”

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If your career has been stolen, or it just feels a little at risk lately, here are 7 questions you should ask yourself as you watch President Obama’s State Of The Union address tonight.

Why is he looking down his nose at us?

  1. When he talks about fiscal responsibility, does he really mean?
    1. I plan to raise taxes on anyone in America who has enough money to create jobs.
    2. I’m freezing spending in the 2011 budget in a few departments where I jacked up spending by more than 20% in 2009 and I may jack them up more in 2010.
    3. I’m going to add more fees and taxes on those banks that aren’t lending today and pray they lend more to small businesses in the future.
    4. I’m going to continue to lend banks all the money they want at zero interest and then borrow it back from them for 3% when they buy the billions of bonds I have to sell every week as I bloat the deficit.
    5. I plan to use the TARP funds that have been repaid for more union payoffs in Stimulus II?
    6. I plan to spend over $1 billion in tax payer money to bring Khalid Sheikh Mohammed to New York to try him for his role in 9/11, a crime he’s already pleaded guilty too.
  2. When does Obama get the most emotional: when he’s discussing those evil-doers on Wall Street, or the alleged terrorists in Al Qaeda.
  3. When he talks about reducing the cost of health care, does he provide an update on the task force he announced a year ago to study Tort Reform? In case you forgot, it was headed by Kathleen Sebelius, the former head of the Trial Lawyers Association in Kansas.
  4. When he talks about reducing the cost of health care, does he look at Joe Wilson? More importantly, does he mention the fact that the reason his health care plan won’t cover illegals is because he plans to make them all US Citizens.
  5. When he talks about the “Global Climate Crisis,” does he?
    1. Mention the emails that prove the data was forged for political reasons.
    2. Mention that there has been no global warming since 1987.
    3. Explain why Nancy Pelosi wasted over $1,000,000 of tax payer money flying cronies, their friends, and families in two 737’s and a G-5 to Copenhagen, where nothing was accomplished.
  6. When he points out some poor bastards in the audience who he’s helped, do they have a real job in the private sector, or do they work for the government?
  7. Is he doing anything whatsoever to create private sector jobs for Americans who do not belong to a labor union?
    Although 87% of the workers in the private sector do not belong to a union, 2 weeks after the 2009 State Of The Union address, President Obama signed an executive order blocking the $800 billion dollar stimulus package from funding jobs that were not associated with organized labor. To date, the only funds from the Stimulus Package that are allocated for non-union private sector workers are for extended unemployment benefits. The $80 billion dollar second stimulus package being developed in Congress only saves or creates union and government jobs as well.

Happy viewing!

Dave

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DJH: I was just starting to write a post on this silly Obama Spending Freeze and I came across this great price in US News and World Report that says it all.

Does Obama think the American people are stupid? We know that freezing spending on ONE EIGHTH of the budget at record high levels is not fiscal responsibility; it’s just a dishonest trick aimed at fooling dimwits!

By the way, US World and News Report is another liberal leaning member of the Main Stream Media to cry foul on Obama’s abysmal efforts to fix the economy. In fact, their editor — Mort Zuckerman actually worked to get Obama elected and has since publicly regretted it.

Dave


The Obama Spending Freeze is Simply Not Credible

January 26, 2010 05:22 PM ET
by Peter Roff

By Peter Roff, Thomas Jefferson Street blog

Following a string of embarrassing electoral and political defeats, the president has signaled major changes are coming. He is no longer going to be “Your Mama’s Obama”–the cool, smooth, rational, post-partisan candidate for president the country was introduced to in 2008. That’s out the window in favor of Obama 2.0, the populist firebrand, “fighter for you” who wants to lead a charge rather than simply effect change.

It’s a bold effort to redefine what any number of polls, including the Gallup presidential tracking poll, indicate is a failing but not yet unredeemable presidency. Most all the administration’s key legislative initiatives have hit the wall in Congress, with members of the president’s party increasingly looking for the exits rather than for another term. Obama’s response to this has been to change the rhetoric rather than the reality, starting with his new proposal to freeze non-defense, non-security related federal discretionary spending for the next three years.

The image of Obama as a reborn budget cutter as the concluding act of an almost year-long spending binge that would have made Bacchus blush is simply not credible, as Congressional Republicans were quick to point out.

House Minority Leader John Boehner said in a statement that the American people would be right “to be skeptical about his sudden change-of-heart.” Instead, the Ohio Republican said, the president should work with Congress “to adopt strict budget caps that limit federal spending on an annual basis, and put Congress on notice that he intends to enforce them.” (more…)

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DJH: Is there anyone (outside of Washington DC) who doesn’t know exactly what the Middle Class in America need right now? They need JOBS! After that, there are a number of other things they’d like: less government spending,  stop deficit spending, and stop raising taxes. They do not want the government to go deeper into debt to expand entitlement programs!

But inside The Beltway, specifically, inside the Obama administration, they know better.

Take a look at this laundry list of hand-outs that have been bundled into Obama’s relief package for the middle class. Most of them are nothing more than raising the qualifying income level on entitlement programs that have been around for years to help the poor. Is Obama’s plan for helping the middle class to treat them like they’re poor?

Take a look at this story — even the left leaning Washington Post can’t find much of value in here for the struggling middle class in America.

Dave

Obama proposes economic help for middle class

by Alec MacGillis
Tuesday, January 26, 2010

1. Expanding the child-care tax credit.

The child-care tax credit now starts at 35 percent of child-care costs for the poorest families and drops to 20 percent of costs for families earning $43,000 or more. The proposal calls for a credit of 35 percent of child-care costs for all families earning as much as $85,000, with the share declining above that income level. The White House estimates that this would reduce taxes by $900 for a typical family with $80,000 in income.

Analysis: This expansion would help many families closer to the $85,000 threshold but would not help the many families lower on the income ladder who pay no federal income taxes, because the credit is nonrefundable. The White House is seeking to help lower-income families by expanding federally subsidized child-care programs by more than 200,000 slots.

2. Limiting student loan payments.

Payments on federal student loans are capped at 15 percent of income above a basic living allowance. The proposal would lower that to 10 percent. Under a typical repayment plan, the monthly payment for a graduate earning $30,000 who owes $20,000 in loans would drop from $228 to $115. The proposal would also lower the number of years for which graduates must make payments before being forgiven their balance, from 25 years to 20.

Analysis: The administration is seeking a broader overhaul of student loans, scaling back the role of federally subsidized private lenders and using the savings to expand federal financial aid programs. This is a far more modest step, but it would defer payments for many graduates and stimulate the economy by giving them more money to spend in other ways. (more…)

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