Wall Street Weekly | 11/06/2009 11:45 am
Liz Peek: Obama Deaf to Election Warning But May Get Bailed Out
As bad as the recent jobs report is, the president is likely to receive some good news over the next several months …
Bears, Bulls, Chickens and Pigs: wOw’s Wall Street Weekly with Liz Peek (Week of 11/2)
Editor’s Note: Liz Peek is a financial columnist.The Bureau of Labor Statistics reports that the unemployment rate rose from 9.8% to 10.2% in October, the highest level since 1983. Job losses were primarily in construction, manufacturing and retail, and were worse than expected. This is not good news; the terrible job market clearly weighs on consumer sentiment and spending, slowing the recovery. The debilitating payroll cuts also produced some cranky voters this past Election Day.
All politics may be local, but it is hard not to read national significance into Tuesday’s election results. Voters rallied against high taxes and the worrisome economy, while in Virginia, disillusioned young and independent voters crossed the aisle yet again to elect a long-odds Republican.
Astonishingly, the Obama administration has chalked up this apparent warning shot to circumstances beyond their control. Neither tea parties nor sinking polls or, now, pointed election returns seem to have made the slightest dent in their enthusiasm for policies that the majority of Americans do not embrace. Speaker Nancy Pelosi could barely contain her glee that the Democrats had picked up an extra House seat in New York – all the better to ram health-care legislation through. Remember Obama’s words on the night he was elected? "I will listen to you, especially when we disagree."
Americans are genuinely concerned about their country’s fiscal prospects, and about Obama’s programs that will create even worse deficits down the road. Fundamentally, they are worried that a shrinking number of people are supporting a growing segment of the population. The jobs being "saved" or added currently are mainly government jobs; the private sector continues to lay off workers. Even a caveman (with all due respect) gets that this is an unworkable trend.
In 2007 economist Gary Shilling wrote that 52.6% of Americans received "significant income from government programs, up from 49.4% in 2000 and 28.3% in 1950." These figures included, for 2007, 19 million Americans on food stamps, 57 million receiving Social Security payments, over 4 million collecting income from the Veterans’ Administration and millions more employed by the government. For sure, the figure has risen in the past two years as increasing numbers have received unemployment assistance and as the government has propped up banks and autos.
At the same time, a growing number of Americans do not contribute to our tax roles. The Tax Foundation reports that about one-third of our population files returns but pays no taxes, up from 18% in the early 1980s, while another 20 million Americans do not file returns at all.
This is not about social justice. It’s about a shifting of the economic burden in a way that is unsustainable. As baby boomers approach retirement and begin to receive Social Security, the number of people paying in more than they are taking out is going to shrink yet again. Add to that inevitability the millions that will receive health care under the legislation working its way through Congress and it is no wonder that young voters shifted gears. They see the burden contained in the legislation that Democrats are so eager to adopt. It is worth noting that, in 1980, 55% of Americans were receiving government handouts – a level that ushered in the Reagan revolution.
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433 Reader Comments (so far…) Sign In or Register to comment
Laurel, I never discuss abortion and religion on any of the sites I frequent because I feel that those two categories are personal. So, I can’t see how you can assume anything about me.
The democrats are joining the independents and the independents are joining the republicans. I am VERY MUCH for the war on terror. I remember 9/11 and I remember the recent arrests that were made in our country….our own terrorist sleeper cells living among us here in America coming in prior to 9/11 as immigrants. In fact, ANYONE who isn’t concerned about the war on terror is thrown into the loon category.
As far as Palin goes, I am a moderate republican. I don’t always agree with everything with the candidate I go with. My concern is the economy and balancing the budget. This country always needs to be ready to jump in and help those countries who want a democracy.
I think that the Republican party is turning in the pary of the Independent conservatives. Individuals standing together, not a organization of paid thugs worshipping one man.
Speaking of Owens…..
Owens Breaks 4 Campaign Promises in First Hour of Congress
GOUVERNEUR, NY - Congressman-elect Bill Owens was sworn in at noon today.
Owens indicated in a press release released shortly afterwards that he was now in favor of the the "Affordable Healthcare for America Act" bill in direct contrast to his earlier position during the election campaign.
According to Politico.com, Mr. Owens assured voters that he felt the public option had no place in the health care reform bill. Contrary to that position, Mr. Owens now indicates that he intends to vote in favor of the bill even though it now contains a public option.
UPDATED: A spokesman for Congressman Owens indicated correctly that Mr. Owens had recanted his solid position against public option later in the campaign, clarifying that he did not wish public option to be a ‘litmus test’ for the Health Reform bill and that on Oct. 30th, several days prior to the election, in a debate had stated that he generally supported the public option as it was now written (at that time.)
Mr. Owens also indicated during his campaign that he was firmly opposed to cutting Medicare benefits, taxing health care benefits, and increased taxes on the middle class in any way as you can see clearly in the screenshot below, taken directly from Mr. Owens’ campaign website.
The House Health reform bill contains sections that cut Medicare benefits, tax existing health care benefits, and increases taxes on the middle class, yet Mr. Owens stated today that he will now vote in favor of those things contrary to what he had promised the voters of NY’s 23rd Congressional District that he would vote against.
Mr. Owens indicated in his press release today that "This legislation will reform the insurance industry and provide increased access to affordable healthcare without taxing healthcare benefits, cutting Medicare benefits or raising taxes on the middle class, and that is exactly the direction we need to go."
When The Gouverneur Times attempted to contact Mr. Owens to clarify this information, we received no direct response to our phone or email inquiries. Both FactCheck.org and the Congressional Budget Office agree that HR 3962 contains potentially hundreds of billions of dollars in planned cuts to Medicare, yet Mr. Owens indicates that he supports this legislation and says that it does not cut Medicare benefits. Either Mr. Owens has been snowed or the public is about to be.
HR 3962 also includes a range of various taxes on middle-class families as well as language to repeal tax relief already in place. Has Congressman Owens blindly followed Ms. Pelosi’s rhetoric in believing that the end to a tax cut is not the same thing as an increase in taxes or is he hedging his bet with very carefully chosen words?
HR 3962 now also contains language that allows illegal immigrants to be covered under the legislation. When The Gouverneur Times attempted to contact Mr. Owens for clarification of this language, we received no response other than the press release heretofore mentioned. Specifically, we asked if illegal immigrants would be forced to purchase healthcare insurance as citizens will be and whether or not they would be forced to do so at standard rates or if they would qualify for the public option subsidy.
The Associated Press said this morning that: "House leaders said that, in keeping with the Hispanic Caucus’ demands, there was not likely to be any prohibition added to the House bill against illegal immigrants shopping in the exchange."
In a speech made to Congress a short time ago, President Obama had stated that the bill would not contain support for illegal immigrants - a statement for which he was called a "liar" by Rep. Joe Wilson. Rep. Wilson was severely chastised for his comment at the time though it would now seem to be true.
The mixed-up mess that was the 23rd Congressional District Special Election was a close race between Democrat Bill Owens and Conservative Doug Hoffman. Many feel that it was unlikely Mr. Owens would have won those crucial few thousand votes if the voting public was aware of his intent with regard to the Health Care bill. The majority of residents in this district do not support the Health Reform bill as it is now written and many feel like they’ve become victims of a fraud perpetrated by their chosen candidate.
Breaking campaign promises is not unusual for politicians… it’s a cliche. This is almost certainly a record though. Mr. Owens broke no less than 4 promises in his first 24 hours in office.
http://www.gouverneurtimes.com/index.php?option=com_content&view=article&id=7623:owens-to-break-campaign-promises&catid=60:st-lawrence-news&Itemid=175
Always good to have another viewpoint: this from Krugman:
About that good news: not that long ago the U.S. economy was in free fall. Without the recovery act, the free fall would probably have continued, as unemployed workers slashed their spending, cash-strapped state and local governments engaged in mass layoffs, and more.
The stimulus didn’t completely eliminate these effects, but it was enough to break the vicious circle of economic decline. Aid to the unemployed and help for state and local governments were probably the most important factors. If you want to see the recovery act in action, visit a classroom: your local school probably would have had to fire a lot of teachers if the stimulus hadn’t been enacted.
What I keep hearing from Washington is one of two arguments: either (1) the stimulus has failed, unemployment is still rising, so we shouldn’t do any more, or (2) the stimulus has succeeded, G.D.P. is growing, so we don’t need to do any more. The truth, which is that the stimulus was too little of a good thing — that it helped, but it wasn’t big enough — seems to be too complicated for an era of sound-bite politics.
But can we afford to do more? We can’t afford not to.
High unemployment doesn’t just punish the economy today; it punishes the future, too. In the face of a depressed economy, businesses have slashed investment spending — both spending on plant and equipment and “intangible” investments in such things as product development and worker training. This will hurt the economy’s potential for years to come.
Deficit hawks like to complain that today’s young people will end up having to pay higher taxes to service the debt we’re running up right now. But anyone who really cared about the prospects of young Americans would be pushing for much more job creation, since the burden of high unemployment falls disproportionately on young workers — and those who enter the work force in years of high unemployment suffer permanent career damage, never catching up with those who graduated in better times.
Even the claim that we’ll have to pay for stimulus spending now with higher taxes later is mostly wrong. Spending more on recovery will lead to a stronger economy, both now and in the future — and a stronger economy means more government revenue. Stimulus spending probably doesn’t pay for itself, but its true cost, even in a narrow fiscal sense, is only a fraction of the headline number.
O.K., I know I’m being impractical: major economic programs can’t pass Congress without the support of relatively conservative Democrats, and these Democrats have been telling reporters that they have lost their appetite for stimulus.
But I hope their stomachs start rumbling soon. We now know that stimulus works, but we aren’t doing nearly enough of it. For the sake of today’s unemployed, and for the sake of the nation’s future, we need to do much more.
Callie you took the words out of my mouth - those Dems on this site dislike Liz’s posts YET they are always the first one’s to respond and call names….wish I could say it surprises me but have grown use to it.
I am not sure but hasnt Obama increased the national debt in one year in which it took Bush 8 to do? That for me speaks volumes!
Not to mention Obama called a press conference yesterday to talk about Ft. Hood YET he said maybe a couple of sentences…he used the other time to talk about everything else…what kind of message does that send to our Military - you know the one he is Commander in Chief of? Has he gone there yet oh no wait he went to Walter Reid instead - if that was Bush - the Dems would have his head on a platter if he didnt fly down to Ft Hood asap…
Obama is not liked as he was a year ago - yes there are some people who expected Obama to come in wave his wand and it all go POOF and when they are now figuring out it doesnt work that way and some of those lose their jobs anyway - they are pissed…If McCain had won the Dems would be riding his back on everythng and making it all worse.
C Hardy,
Great point about how Obama spoke about Fort Hood. How very ignorant was that? Just another slap in the face to our fine Military. I can’t believe this man is our president. This is a nightmare! 2012 cannot get here fast enough. I just hope our Country can last before he takes it down with him.