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Responsibility for the middle class wealth crash

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If you’ve been here a while, you may recall that I posted an article called “Responsibility for the national debt part deux: control of the purse strings of Congress is the real determinant”, which demonstrated that the truest indicator for the economic health of the country is which party is in control of Congress.  It is worth a re-read.  Recent events called that post back to mind.

As you may have heard, the Washington Post published an article called “Americans saw wealth plummet 40 percent from 2007 to 2010, Federal Reserve says“.  I think the title tells it all.

Now let’s review: who had complete control of Congress from 2008 to 2010?  Yes, it was Queen Pelosi and her flying monkeys, the same Pelosi that was on the today’s CBS This Morning show telling us all how Øbama will focus on jobs (yet again) in his second term: “the president was a job creator from day one“.  The same “economic giant” Pelosi that told us that welfare and food stamps create jobs.

I bring this up because you can be sure that the Democrats (with the possible exception of Carter) will pull the old “under Bush’s watch” meme out, as has Øbama, to defect attention and responsibility for the poor economy.  Or should I say “the worst economy since the Great Depression?”  😉  It might also explain why they are trying so desperately to convince the middle class that Romney is bad for them.  To wit:

The recent recession wiped out nearly two decades of Americans’ wealth, according to government data released Monday, with ­middle-class families bearing the brunt of the decline.

The Federal Reserve said the median net worth of families plunged by 39 percent in just three years, from $126,400 in 2007 to $77,300 in 2010. That puts Americans roughly on par with where they were in 1992.

I think it is pretty obvious (although not from reading this article in the WaPo) that it is Øbama and the congressional Democrats that are bad for the middle class.  Clearly, they doth protest to much.

By no means does this let Øbama (or Bush) off the hook, but a president does have a fair degree of influence, particularly when in agreement (or in thrall) with the party in control of Congress, but the true purse strings are in the hands of Congress, which explains why Harry Reid is snuffing out all legislation from the Republican controlled House: he can’t afford to have the Republicans look good, and a (correct) conclusion be drawn that Republicans generally improve the economy, while Democrats drag it down.

Like Reagan, a strong, principled, well spoken president, who understands economics, can improve the economy by influencing a Democrat controlled Congress to go against its base nature.  It is even easier when Democrats are in the minority.

Remember in November.

The stimulus pulls an o fer! Didn’t stop the recession and create jobs

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I run this in light of the resignation of yet another Obama economic guru … Larry Summers. It’s a great analysis of how the stimulus didn’t solve anything other than fatten the pockets of Washington elites. But then if you are unemployed … you already knew that. Read more

Uh oh … Schiff tells Yahoo the economy is in worse shape not better

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From Jim Hoft at Gatewaypundit. Connecticut Senatorial candidate and the man who warned America about the housing bubble and the ensuing financial collapse, Peter Schiff is at it again. This is well worth the listen because he explains why he believes the economy is in worse shape than in 2008 and headed for another collapse.

The Yahoo printed story is over at Gateway. I have seen pundits like Mr Schif call big changes in the economy before, only to watch them collapse and not the economy, the second time around. The difference with Schiff is his reasoning and critical thought. Scary though, heh?

Thomas Sowell On The Housing Crisis

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Thomas Sowell is a very bright man with uncommon common sense. A guest on my show only once (he is very tough to nail down), a free market thinker he does a great job of tracing the root cause of the current financial crisis, an even if you are one to believe that “greedy bankers” caused the collapse by eagerly plunging into the sub-prime market, you need to know who encouraged the “greed” and enabled these bankers and mortgage brokers to make loans that in years past would never have been considered. As usual Thomas Sowell touches on the very erosion of America’s soul: a willingness to compromise values and principals in the name of the “greater society”. The results as you will read, were disastrous.

What was lacking in the housing market, they say, was government regulation of the market’s “greed.” That makes great moral melodrama, but it turns the facts upside down.
It was precisely government intervention which turned a thriving industry into a basket case.
An economist specializing in financial markets gave a glimpse of the history of housing markets when he said: “Lending money to American homebuyers had been one of the least risky and most profitable businesses a bank could engage in for nearly a century.” That was what the market was like before the government intervened. Like many government interventions, it began small and later grew.

Take the time to read the entire article. It is short. It is the truth and is an example where the best intentions of governments can go so awry.

Scared? Maybe you have good reason. Take New Poll!

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Running through last night’s video and I came across a continuing theme throughout … Democrats and RINOs trying to frighten America to death … a financial death of $1 Trillion dollars (pay no attention to the deal … it will be a trillion I can assure you).

Below you will find two videos … first the scare mongers

httpv://www.youtube.com/watch?v=hdQH7oh92RU

Now the voice of reason from two well respected economic pundits, Ben Stein and Dave Ramsey.

httpv://www.youtube.com/watch?v=HnCPFWglX0o

Even if you believe it will get worse (and that seems to be likely) the question you need to ask is … will this stimulus help the private sector where the jobs are lost … your job is lost … or just save public works jobs?

And what good is a public sector job without a healthy private sector … hmmmm? Just askin, that’s all.

Nothing To Fear?

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With thousands getting pink slips in Connecticut … from WTIC to CIGNA and United Technologies, it’s a pretty easy question to answer. The economy is receding and if you are on that end of it … its not good. But how bad a recession depends on how long you go between jobs.

As for those people who still have jobs … it hasn’t been a bad four years despite what major networks and newspapers report. And even without government … no especially without government … the economy will come back. It always does. Hat Tip to Instapundit.

It’s the way the modern world works. Things improve. Incomes rise, work hours fall, the quality of goods improves.  Few things in economics are as consistent as the growth of real GDP per capita over the past 200 years:

Right now when you head off to Mall as I did today to upgrade my computing and TV recording equipment for the show I was a little stunned at how difficult it was to find a parking space. Much of that, were I trying to explain it in an economics paper, I might attribute to severance packages still available? Or those who still have jobs are still shopping. Or people still have savings and money to spend, wisely, and are not as afraid as the media would have us believe. Or .. they are looking but not spending.

I dismiss the last. The people I saw were spending, but not wildly. Could it be we are just beginning a period of responsible economic behavior after two decades of a drunken stupor?

Democrats Blame Bush for Everything – PROVE IT

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I’m calling out all Democrats and liberals. Prove it. Prove that President Bush did this, and it resulted in that. I’m talking a clear case of cause and effect. Jobs, housing, oil prices, gas prices, global warming… Pick your poison and give it a shot.

Reuters just posted a story, Democrats Slam Bush on Gloomy Jobs Report. Read more

Why Not Just Change the Definition of a Recession?

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During the past decade, there has been this push to change the definition of words. Don’t like the definition of marriage? Go change it.

How about the definition of an expulsion? When I was in high school, if you got expelled, you were expected to never step foot on campus again, period. These days, a expulsion is expressed in a number of days. That used to be a suspension didn’t it?

In The Hartford Courant’s business section today, they are pushing the recession theme again. If not redefining a recession, they are certainly promoting that fact that we’re in the beginning phases of one. Run for the hills!

With all of the media gloom and doom during the past seven years, you’d think that we’ve been in-and-out of a recession since GWB took office. Here’s the link to the full article.

“Recessions are only apparent with hindsight,” said Nicholas Perna, economic adviser to Western Financial Corp.

It’s likely that when “we look back at the first quarter of 2008, we’ll see we are in a recession,” said Nariman Behravesh, chief economist and executive vice president of Boston-based Global Insight, an economic consulting firm. A recession is commonly defined as a decline in real gross domestic product over two consecutive quarters.

Well, in my day it was three consecutive quarters, but who’s counting.

If you look back at GDP percentage change based on chained-year 2000 dollars, you’ll see a bump in the road in 2000 and 2001, the biggest bump in the third quarter of 2001. (Do you remember why?)

2001 Q3 = -1.4 percent
2001 Q1 = -0.5 percent
2000 Q3 = -0.5 percent

You have to go back to the fourth quarter in 1990 and the first quarter in 1991 to find two quarters back-to-back with negative growth in GDP, and all the way back to the winter of 1974-1975 to find three quarters of negative growth – the true definition of a recession.

  • Every single quarter since October of 2001 has shown a positive growth in GDP.
  • The GDP has almost tripled since 1991.
  • Personal income has doubled since 1991.

There certainly have been bumps in the road, and there always will be, but come on!

So why change the definition of a recession? Well if you can’t get what you want, you might as well lie or change the rules of the game. Right now, the liberal press and college indoctrination centers want power and control, so they will changed definitions at will to fit their agenda – simple as that.

Last month I posted commentary concerning the fact that Massachusetts will most likely loose a congressional seat after the 2010 census. It’s the same game plan. Since the current rules – on how to count people – don’t work for them, they want to change the rules of the game and find more people to count; maybe change the algorithm or something.

All they need is a calculator; and a dictionary.

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