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
Welcome and Hurrah!, Katharine Gray!! You are so right on every line, and you said it so WELL!!!
Already we are seeing with what disdain other leaders regard our president. They smile and nod, and laugh at him behind his back for his weakness. What fools we have in this administration to think their placating policies will engender anything but contempt.
I agree…Welcome Kate!!!
Wow Katherine Gray — I am applauding. And Amen! Please stay around - I like what you say! I agree with you 100%!
Sing it out loud and often!
Liz Peek is absolutely correct when she warns us that "a shrinking number of people are supporting a growing segment of the population".
With the possible increase of the income tax on the wealthier in our country from 35% to 40% and the Speaker’s increase of another 5.2% on those Americans to fund Health Care, I see a wicked and evil return to the post Reagan era when some Americans were paying almost 3/4 of their income to taxes, both federal and State.
The monies the President and the Speaker plan to take away from the wealthier in taxes is the monies used for investment in America to create jobs, finance entrepreneurs, expand existing businesses and raise the GNP. The President and the Speaker will weaken America and their policies will continue to weaken an already poor job market, let alone the continued devaluation of the dollar.
Once again, can you imagine the deficit Obama will leave for the next incoming president? Pay attention to how Obama and his administration are going in the wrong direction. The unemployment at 10.2% is a strong indicator that they were wrong from the start. Ignoring our largest employer of jobs was the wrong thing to do. I believe they know that by now. That’s why they must get the healthcare bill through to save face. My opinion is that the healthcare bill will never see the light of day. As of today they don’t have the votes. And they probably never will because they mismanaged the whole program from the start. This is the worst administration this country has ever seen.
Deber,
And they just passed a 1.3 trillion dollar health bill in the House. But no sweat, Obama is not going to sign a bill that will raise our deficit by one cent. He said it, several times in fact. So let him be clear now.
Deber,
Like I have told you before, I sure do hope you are right. It’s funny how the dems voted last night, the ones who voted no, were doing that to save their own butt at next election. But Pelosi had it figured she only needed enough to pass it and let the others vote nay to save their skin. What a well thought out plan. Like we couldn’t see through that one.
Divisive and impassioned criticism seems pointless. What bothers me are the naysayers who pronounce the entire Obama administration’s legistlative efforts [the recovery act, bailouts, and health care reform] as fatal disasters facing all Americans. Sure. The problems inherited by the current administration were addressed in a crisis environment, and the quick fixes were certainly imperfect. Yet, there seems to be no clear consensus from the naysayers as to what might work if the administration was back in the hands of the GOP. Indeed, what political figures would emerge from a party that is experiencing its own inner debacles?
Current, health care reform is being attacked. In fact, many have vehemently stated that they hope that Obama/Pelosi’s health care reform bill will not pass. Frankly, I’m not sure if there is a sensible/feasible remedy for Americans in need of health care when our current system is so seriously flawed. Yet, while I do not claim to have expertise to suggest what I believe might work, conventional wisdom tells me that reform is imperative to address the urgent and growing demands for adequate health care … now, rather than later.
So what is that answer to providing health care to American citizens in this economic climate? Denis Cortese, President and CEO of the Mayo Clinic is among the experts whose ideas about health care reform I agree with.
Please click below, for an interview he had with CHARLIE ROSE in July.
http://www.charlierose.com/view/interview/10496
My point is that criticism is more legitimate if and when alternative solutions are suggested, and thus more compelling [to adopt].
Republicans seem to want to go backward and not forward. I see an exciting future with a new beginning. We shipped jobs overseas and will not get them back. WE must prepare for a new future with green jobs. This is the future.
I hope Republicans can start working on a new future in which we have a strong and healthy economy. This will take a bi-partisan effort.
The Republican mission statement can’t continue to be "I hope he fails". If President Obama and the government fails - our country fails.
I want my country back -
starry nite, if you consider unsustainable debt exciting then you shall receive your wish. No one wants Obama to fail. Just because we adamantly do not agree with the direction he is taking OUR country doesn’t translate to wanting him to fail. We want him to get it right.
I want MY country back, too.
Starry..how do the Republicans start working on a strong healthy economy when every day the Dems find new ways to add more and more costs to already struggling business?