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.