WSJ: OBAMA WORST PRESIDENT FOR MIDDLE CLASS 'IN MODERN TIMES'

WSJ: OBAMA WORST PRESIDENT FOR MIDDLE CLASS 'IN MODERN TIMES'

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by JOEL B. POLLAK 25 Jul 2013, 8:08 AM PDT
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The Wall Street Journal published a lead editorial on Thursday that responded harshly to President Barack Obama's new series of economic speeches. "The President called his speech 'A Better Bargain for the Middle Class,' but no President has done worse by the middle class in modern times," the editorial noted.

The article went on to highlight several key areas in which the Obama presidency has harmed middle-class Americans.

The economy has become more unequal under Obama. "For four and a half years, Mr. Obama has focused his policies on reducing inequality rather than increasing growth," the Journal notes. "The predictable result has been more inequality and less growth." The rich have done well; the middle class has struggled.

Middle class incomes have fallen under Obama. The Journal points out that median real household income has fallen by 5%--not just since the start of the recession under George W. Bush, but also since the start of the economy recovery in 2009, for which Obama and the Democrats have often claimed sole credit.

The administration has constantly failed to meet promises of faster growth. Contrary to Obama's cherry-picked statistics in his recent speech, theJournal reminds readers that the Obama recovery is "one of the weakest on record," despite repeated rosy projections by the White House and the media of fast growth.

Obama has made entitlements are a drag on the middle class. TheJournal focuses on ObamaCare, which has hurt job creation and created uncertainty. It could have also mentioned the failing state of Social Security and Medicare, which Obama has failed to reform, and the future cost of Obama's staggering debt.

Even Obama's few pro-growth initiatives are not serious. Despite the Journal's early, enthusiastic support for immigration reform as an engine for expansion, the authors of the editorial finally admit: "we're not sure [Obama] wants even that to pass...he may be setting it up to use as a campaign wedge in 2014."

http://www.breitbart.com/Big-Journal...n-Modern-Times

Just How Bad Is The US Economy?

http://www.zerohedge.com/sites/defau.../picture-5.jpg Submitted by Tyler Durden on 07/25/2013 22:10 -0400

There appears to be a level of optimism priced into every macro-economic forecast. Whether this is simply mean-reverting models or a systematic need to justify an ever-increasing equity market is unclear but over the past few years the consensus GDP growth forecast has fallen by around 0.7 percentage points over the year before its final release (as hope turns to reality). So just how bad is the current environment? With the latest update of Q2 2013's GDP consensus forecast now at 1.0%, the last year has seen the consensus drop a stunning 2.0 percentage points (almost triple the average loss of hope). Of course, as we noted here, we'll make it all up in H2 2013 (even as CEO after CEO adjust down their outlooks). Have no fear though - as Jason Schenker from Prestige Economics still believes we will get a +2.2% print for Q2 2013.

http://www.zerohedge.com/sites/defau...130725_GDP.jpg


with the distribution quite concentrated...

http://www.zerohedge.com/sites/defau...30725_GDP1.jpg


though there are still plenty of optimists...

http://www.zerohedge.com/sites/defau...30725_GDP2.jpg


Charts: Bloomberg

(h/t @Not_Jim_Cramer)

http://www.zerohedge.com/news/2013-0...bad-us-economy

Democrats and Economic Alchemy

by MICHAEL TANNER on JULY 25, 2013

There was a time when people believed in magic. Say the right words and one could turn lead into gold; the laws of the natural world did not matter.
Today, too many politicians operate as if they have discovered special powers that allow them to rise above other laws — such as those of economics. All they need to do is to invoke the proper spell or incantation and the outcome they want will come to pass.
Take, for example, the Washington, D.C., city council. They recently became the latest group of politicians to decide that many workers were not being paid enough. They might have tried to fix the city’s high taxes and anti-business regulations, the kind of reforms needed to bring better-paying jobs to the city. Instead, they simply spoke the magic words and declared that, henceforth, big-box stores, such as Walmart or Home Depot, would pay their workers $12.50 per hour.
But here’s where the laws of economics come in: The amount of compensation a worker receives is more or less a function of his or her productivity. Walmart is not going to pay workers $12.50 per hour unless those workers provide roughly $12.50 worth of productivity. As Greg Mankiw notes, “Economic theory says that the wage a worker earns, measured in units of output, equals the amount of output the worker can produce.” This oversimplifies, of course. There are other factors involved. But one can’t just arbitrarily declare a worker’s value.
So, it should come as no surprise that Walmart has already announced that, if the law goes into effect (it faces a possible mayoral veto), the company will cancel plans to build three stores in the District and will explore the logistics of canceling the three others that are under construction. The net result will be a loss of at least 1,800 jobs.
In a similar way, reality trumps magic when President Obama declares that companies have to provide workers with health insurance. A worker’s compensation is not just wages but the full cost of employing that worker, including taxes, benefits, and health insurance. Obamacare’s employer mandate — now delayed but not canceled — simply increases the cost of employing workers.
It shouldn’t be a surprise, then, when employers are reluctant to hire new workers, or when they shift to part-time workers who are not subject to that mandate. According to a Gallup Poll, 41 percent of small businesses said they have already held off on plans to hire new employees, and 38 percent said they’ve pulled back on plans to expand their businesses in other ways. Worse, 11 percent indicate that they have already laid off workers or cut back their hours. And we have seen a dramatic increase in part-time workers. According to the June jobs report from the Bureau of Labor Statistics, the number of part-time workers rose by almost 600,000 from March to June of this year, with the number of Americans in part-time work for economic reasons rising to 8.2 million, while full-time jobs fell by 240,000.
Politicians cling to plenty of other magical fantasies — for example, the belief that government can create jobs. The president and many in Congress may believe that they can simply speak those jobs into existence. But government has no resources with which to create jobs unless it first takes those resources from the private, job-creating sector. As Frédéric Bastiat wrote in “The Seen and the Unseen,” when government “gives jobs to certain workers … it deprives certain other laborers of employment. That is what is not seen.” That is why Bastiat concluded that trying to increase employment through government was “a ruinous hoax, an impossibility, a contradiction.”
Politicians seem to have a magic spell for every occasion. If they create a program to fight poverty, poverty will disappear. Yet despite 126 separate federal anti-poverty programs, adding up to nearly $1 trillion in spending per year when combined with state efforts, poverty persists, nearly unchanged.
If they declare that “no child will be left behind,” our failing schools will get better. But despite more federal intrusion into local schools and massive increases in federal education spending, we see little improvement.
If they say that Social Security and Medicare are solvent, trillions of dollars in unfunded liabilities will simply disappear. Yet every year those programs plunge deeper in debt.
Politicians on the right have their own versions of magic, of course. Passing a law will not make people more moral; you can’t impose democracy on non-democratic societies by wishing (no matter how many tanks you sprinkle into the pot); and not every tax cut pays for itself.
Government is not a wizard. Politicians can’t make things happen just because they want them to, any more than the alchemists of old could transmute lead into gold. It’s not a question of good intentions. It’s just the way the world — the real world — works. If politicians would realize this, we might do a better job of actually dealing with the problems we face.

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Tagged as: entitlements, government is insolvent, medicaid, medicare, michael tanner,welfare

http://www.conservativeactionalerts....nomic-alchemy/