MioMyo
2009-06-05 01:47:19 UTC
As Rove sticks it into the collective eye of the Left Fringe especially
snake head Carville....
http://online.wsj.com/article/SB124407228244683091.html
Tomorrow will likely bring more bad news for President Barack Obama on the
number one issue for voters -- the economy. The Labor Department's monthly
job report will almost certainly show unemployment topping 9%, with a couple
hundred thousand more jobs lost in May.
It will get worse before jobs get better. Congressional Budget Director
Douglas W. Elmendorf recently predicted that unemployment will continue
rising into the second half of next year and peak above 10%.
Mr. Obama has an ingenious approach to job losses: He describes them as job
gains. For example, last week the president claimed that 150,000 jobs had
been created or saved because of his stimulus package. He boasted, "And
that's just the beginning."
However, at the beginning of January, 134.3 million people were employed. At
the start of May, 132.4 million Americans were working. How was Mr. Obama
magically able to conjure this loss of 1.9 million jobs into an increase of
150,000 jobs?
As my former White House deputy press secretary Tony Fratto points out on
his blog, the Labor Department does not and cannot collect data on "jobs
saved." So the Obama administration is asking that we accept its
"clairvoyant ability to estimate," and the White House press corps has let
Mr. Obama's ludicrous claim go virtually unchallenged.
Still, there are limits to Mr. Obama's rhetorical tricks. Even he cannot
turn job losses into real job gains. And he won't be rescued by stimulus
spending.
Former National Economic Council Director Keith Hennessey made a persuasive
case on his blog that the stimulus will be ineffective because the
additional economic growth it spurs will come six to nine months later than
it could have.
This is partly because, as the Congressional Budget Office estimates, only
$185 billion (23% of a $787 billion stimulus package) will be spent this
fiscal year. The government will spend an additional $399 billion next
fiscal year. The balance -- $203 billion -- will be spent between fiscal
years 2011 and 2019, long after the economy has turned on its own power and
for its own reasons. In addition, much of the stimulus that went this year
for tax cuts and transfer payments has been saved, not spent. (The national
savings rate went from less than 0% to about 5%.)
If the Obama administration were more serious about growing the economy than
just growing government, the stimulus would have been front-loaded into this
fiscal year.
In addition, the claim made by Team Obama that every dollar in stimulus
translates into a dollar-and-a-half in growth is economic fiction. The costs
of stimulus reduce future growth. No country has ever spent itself to
prosperity. The price of stimulus has to be paid sometime.
Any real improvement in the economy so far is more likely the result of the
Federal Reserve expanding the money supply and the Fed and Treasury shoring
up the financial sector.
But the Fed's actions are risky. Easy money and expansionary policies are
not sustainable. We may soon be in for a bout of inflation unless the Fed
soaks up much of the money it flooded into the system. The government is
also likely to hamper private investment as it uses a vast amount of capital
to finance its debt. And when the Fed stomps on its monetary brakes, as
eventually it must, we'll get sluggish growth.
The irony for Democrats is that the Fed may hit the brakes in the run-up to
the 2010 congressional elections or the 2012 presidential election.
It is becoming clear that the economy is now the top issue. Mr. Obama's
presidency may well rise or fall on it. The economy will be his
responsibility long before next year's elections. Americans may give him a
chance to turn things around, but voters can turn unforgiving very quickly
if promised jobs don't materialize.
That's what happened in Louisiana, where voters accepted Democrat Gov.
Kathleen Blanco's missteps before Hurricane Katrina but brutally rejected
her afterward because she failed to turn the state around.
Until now, the new president has benefited from public willingness to give
him a honeymoon. He decided to use that grace period to push for the largest
expansion of government in U.S. history and to reward political allies (see
the sweetheart deals Big Labor received in the GM and Chrysler
bankruptcies).
The difficulty for Mr. Obama will be when the public sees where his
decisions lead -- higher inflation, higher interest rates, higher taxes,
sluggish growth, and a jobless recovery.
snake head Carville....
http://online.wsj.com/article/SB124407228244683091.html
Tomorrow will likely bring more bad news for President Barack Obama on the
number one issue for voters -- the economy. The Labor Department's monthly
job report will almost certainly show unemployment topping 9%, with a couple
hundred thousand more jobs lost in May.
It will get worse before jobs get better. Congressional Budget Director
Douglas W. Elmendorf recently predicted that unemployment will continue
rising into the second half of next year and peak above 10%.
Mr. Obama has an ingenious approach to job losses: He describes them as job
gains. For example, last week the president claimed that 150,000 jobs had
been created or saved because of his stimulus package. He boasted, "And
that's just the beginning."
However, at the beginning of January, 134.3 million people were employed. At
the start of May, 132.4 million Americans were working. How was Mr. Obama
magically able to conjure this loss of 1.9 million jobs into an increase of
150,000 jobs?
As my former White House deputy press secretary Tony Fratto points out on
his blog, the Labor Department does not and cannot collect data on "jobs
saved." So the Obama administration is asking that we accept its
"clairvoyant ability to estimate," and the White House press corps has let
Mr. Obama's ludicrous claim go virtually unchallenged.
Still, there are limits to Mr. Obama's rhetorical tricks. Even he cannot
turn job losses into real job gains. And he won't be rescued by stimulus
spending.
Former National Economic Council Director Keith Hennessey made a persuasive
case on his blog that the stimulus will be ineffective because the
additional economic growth it spurs will come six to nine months later than
it could have.
This is partly because, as the Congressional Budget Office estimates, only
$185 billion (23% of a $787 billion stimulus package) will be spent this
fiscal year. The government will spend an additional $399 billion next
fiscal year. The balance -- $203 billion -- will be spent between fiscal
years 2011 and 2019, long after the economy has turned on its own power and
for its own reasons. In addition, much of the stimulus that went this year
for tax cuts and transfer payments has been saved, not spent. (The national
savings rate went from less than 0% to about 5%.)
If the Obama administration were more serious about growing the economy than
just growing government, the stimulus would have been front-loaded into this
fiscal year.
In addition, the claim made by Team Obama that every dollar in stimulus
translates into a dollar-and-a-half in growth is economic fiction. The costs
of stimulus reduce future growth. No country has ever spent itself to
prosperity. The price of stimulus has to be paid sometime.
Any real improvement in the economy so far is more likely the result of the
Federal Reserve expanding the money supply and the Fed and Treasury shoring
up the financial sector.
But the Fed's actions are risky. Easy money and expansionary policies are
not sustainable. We may soon be in for a bout of inflation unless the Fed
soaks up much of the money it flooded into the system. The government is
also likely to hamper private investment as it uses a vast amount of capital
to finance its debt. And when the Fed stomps on its monetary brakes, as
eventually it must, we'll get sluggish growth.
The irony for Democrats is that the Fed may hit the brakes in the run-up to
the 2010 congressional elections or the 2012 presidential election.
It is becoming clear that the economy is now the top issue. Mr. Obama's
presidency may well rise or fall on it. The economy will be his
responsibility long before next year's elections. Americans may give him a
chance to turn things around, but voters can turn unforgiving very quickly
if promised jobs don't materialize.
That's what happened in Louisiana, where voters accepted Democrat Gov.
Kathleen Blanco's missteps before Hurricane Katrina but brutally rejected
her afterward because she failed to turn the state around.
Until now, the new president has benefited from public willingness to give
him a honeymoon. He decided to use that grace period to push for the largest
expansion of government in U.S. history and to reward political allies (see
the sweetheart deals Big Labor received in the GM and Chrysler
bankruptcies).
The difficulty for Mr. Obama will be when the public sees where his
decisions lead -- higher inflation, higher interest rates, higher taxes,
sluggish growth, and a jobless recovery.