Is the recession over yet? – II

“What is the use of living, if it be not to strive for noble causes and to make this muddled world a better place for those who will live in it after we are gone?” — Winston Churchill

Statisticians say the recession ended mid-2009, four and a half years ago. But what do you think? Does it feel like the recession ended or does it feel like we are still in a recession? In a recent poll, 74% said we are still in a recession.

It’s no wonder most people feel that the recession never ended. Employment is miserable. GDP growth is pathetic. Median family income is down for four straight years. Almost 50 million Americans live below the federal poverty line. A record 47 million people are on food stamps. One pundit declared that “More people in the United States are poor, unemployed, underemployed, looking for work, disgusted and quit looking for work, on food stamps, and on disability than anytime in our history.”

If those words look familiar it is because I first wrote them three months ago. In that column, the focus was on the worst employment picture in more than 30 years. Three recent pieces of economic news make this a good time to look more broadly at the economy.

1) On April 22, the New York Times reported that the U.S. no longer has the highest Median Family Income in the world. Canada is now #1.
2) April 30, the headline news was that in the first quarter of 2014, the U.S. economy grew at an almost non-existent rate of 0.1%.
3) That same day other headlines stated that China would soon pass the U.S. as the world’s largest economy.

Our economy stinks and we will have more such headlines if we don’t fix it. So, how do we fix it? The first step is to replace all the politicians who don’t even realize there is a problem, who do the same wrong things year after year expecting different results.

For decades, probably for more than a century, the U.S. has had the richest middle class in the world. Not just the richest middle class, but also the richest lower class, the richest upper class, and even the richest poor people. Those in the bottom 10% were much better off than the bottom 10% in any other country.

U.S. median family income is now down for five years in a row. In Canada, median family income is up for four of the last five years. Is it pure coincidence that Canada has been governed by Conservatives in recent years, the U.S. by Progressives?

The Index of Economic Freedom is an annual scoring of some 180 nations by ten measures of economic freedom. As the Index states, “The ideals of economic freedom are strongly associated with healthier societies, cleaner environments, greater per capita wealth, human development, democracy, and poverty elimination.”

The U.S. was rated economically “free” in 2006. Since then, its freedom score has dropped 6 points, it has fallen out of the top 10 to now #12 and is ranked only “mostly free”. The U.S. has lost economic freedom for seven years in a row, particularly in the areas of property rights, and freedom from corruption.

Conversely, Canada has increased its freedom score by more than 10 points over the last 20 years. It is currently ranked #6, and is rated “free”.

Hmm, is there a pattern here? The U.S. loses economic freedom seven years in a row and median family income goes down for five years in a row. Canada increases its economic freedom and median family income goes up four of the last five years. It now has the world’s highest median family income.

GDP growth in this so-called “recovery” has been pathetic. For four years it has been around 1.5% to 2%. That is the slowest by far of all the recoveries in 65 years. The Federal Reserve Bank of Minneapolis has a nice interactive chart of all postwar recoveries. The current recovery amounts to merely an 11.1% increase in GDP over the almost five years since the recovery began. Many of the previous recoveries had double or almost triple that growth. This recovery is barely half the average of the ten previous recoveries.

Imagine if we had had as much as average growth in the last five years. Investor’s Business Daily estimates that we would now have $1.3 trillion higher income. That is about $10,000 higher per household. That is the cost of bad economic policies.

Apologists for the Obama “recovery” say that the recession was especially severe. Historically, the more severe the recession, the stronger the recovery. It should have been easy to produce better than average numbers. They now say that financial recessions take longer to recover. But that’s not what they said back in 2009 and into 2010. Back then they forecast a strong recovery. It was only after their economic plans failed that they started spouting the “financial recession” excuse.

The Democrat Party would be wise to heed the words of one of its Presidential candidates from some 20 years ago, the late Senator Paul Tsongas, who said, “You cannot redistribute wealth that you never created. You cannot be pro-jobs and anti-business at the same time. You cannot love employment and hate employers.”

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Oh, the Shame!

“This country has gotten where it is in spite of politics, not by the aid of it. That we have carried as much political bunk as we have and still survived shows we are a super nation.” — Will Rogers

According to a recent report, “Taxachusetts” now has a lower business tax burden than NH. For decades, we have ridiculed Massachusetts for its high taxes. Now it seems that our business tax rates are even higher than theirs. Among the six New England states, NH is outranked by both Connecticut and Massachusetts for low business taxes.

Did you know that the share of state taxes paid by businesses is almost 60%? In Massachusetts, businesses pay about 35% of the state’s taxes. NH businesses pay the fourth highest percentage of state taxes in the entire country.

With businesses paying so much of our taxes and employing most of our people, shouldn’t we want more businesses, hiring more employees, paying more taxes? Sadly, Governor Hassan and House Democrats have done nothing to encourage businesses to move to or expand in NH. Of the 180 Democrat bills passed by the House, not a single one makes NH more attractive for business.

Some 20 years ago a Democratic Presidential candidate remarked that “You cannot be pro-jobs and anti-business at the same time. You cannot love employment and hate employers.” Today’s Democratic politicians often seem to be anti-business and to hate employers.

NH House Democrats this year have passed some 30 bills that make life a little more difficult, a little more expensive for businesses. None of those bills alone will kill a business, but together they will make some businesses decide, “It’s just not worth it. Too much hassle, too much risk.” Collectively, they create a “Closed for Business” sign around NH.

There were some bills that were ever so slightly pro-business. Democrats sponsored some; Republicans sponsored many more. But all of those pro-business bills were killed. 

Did you know that a convenience store that sells beer and wine is mandated to keep $3,000 of groceries in stock? A bipartisan proposal would have removed the mandate and let stores stock what their customers wanted rather than what politicians wanted. That bill was killed. A few days later a seacoast paper reported that a gas station was fined $250 for not having the requisite amount of groceries on hand.

I can’t help wondering how many inspectors we taxpayers are funding to travel around from store to store counting how much groceries each has in stock. Is that really a good use of taxpayers’ dollars? How about letting the business owner stock what he thinks his customers want? If he thinks they want to buy hamburgers and hot dogs along with beer, then let him stock those items. If he thinks his customers want nothing more than wine and cigars, then so be it. Let the customer be king, not the politicians.

In a recent poll, 74% said we are still in a recession. It’s no wonder: Employment is miserable. GDP growth is pathetic. Median family income is down for four straight years. If you are like most people, you think our representatives should be working to help the economy grow and create more jobs. The Democrats down in Concord have not been doing that, nor have they made any effort to fix the problems with ObamaCare such as people losing their hospitals, their doctors, their plans, and seeing 35% increases in their premiums and deductibles.

So just how have the Do-nothing Democrats been spending their time? You might say they have been rearranging the deck chairs on the Titanic. They have no concept of the big problems ordinary people are facing, so they have made piddling little changes to our laws. They have passed bills to establish thirteen new committees, to add members to some advisory councils, and even to support voting rights in Washington, DC.

The Democratic House passed a bill to tax paint $0.75 per gallon. They tried to ban children under 18 from using tanning facilities even with permission of their parents. That bill seemed headed for passage until members realized the absurdity that young girls would be able to get an abortion without parental consent but would not be able to get a tan even with parental consent.

What else have the Democrats spent time on? Two social issues come to mind. They tried twice to restrict the rights of law-abiding gun owners, while doing nothing about criminals. The first bill took more than an hour of debate but in the end was decisively killed by more than 2:1. The second bill also took more than an hour of debate. The vote was closer but the measure was again defeated.

Another hot button for Democrats is voter identification. They offered four separate bills that would make it easier for out-of-state persons to vote fraudulently in NH. They like to claim that there is no voter fraud but how can you find fraud if you don’t look for it? Last year, North Carolina strengthened its voter ID laws; this year they are investigating some 800 cases of apparent fraud, and another 35,000 cases of possible fraud. 

Come November could we please elect representatives (and a Governor) who will work on the economy and jobs?

Poll: jobs, economy, government most important problems

From Gallup:

Three issues — jobs, economy, and government — have been at the top of the “most important problem” list since the beginning of the year.

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Americans are about equally likely to name unemployment and dissatisfaction with government as the most important problems facing the U.S., with the economy in general following closely behind. These issues have ranked at the top of the most important problem list since the beginning of 2014.

Nearly one in five Americans still cite government itself as the nation’s top problem.

Independents name as their top four problems:
  • Dissatisfaction with government
  • Jobs
  • Economy in general
  • Poor healthcare

See the full poll here.

‘Taxachusetts’ has lower business tax burden than NH

A new report by the Massachusetts Budget and Policy Center says that Massachusetts actually has a lower business tax burden than most states, including New Hampshire. Regionally, NH is behind both Connecticut and Massachusetts for combined business and local taxes.
Nationally, NH is fourth highest for the share of total state taxes paid by businesses. NH businesses pay 59.4% of all taxes. In Massachusetts, they pay about 34.5%.
If we want a growing economy, creating more jobs, then we must find a way to make NH more attractive to businesses.

Is the recession over yet?

“Be thankful we’re not getting all the government we’re paying for.” — Will Rogers

Statisticians say the recession ended mid-2009, four and a half years ago. But what do you think? Does it feel like the recession ended or does it feel like we are still in a recession? In a recent poll, 74% said we are still in a recession.

It’s no wonder most people feel that the recession never ended. Employment is miserable. GDP growth is pathetic. Median family income is down for four straight years. Almost 50 million Americans live below the federal poverty line. A record 47 million people are on food stamps. One pundit declared that “More people in the United States are poor, unemployed, underemployed, looking for work, disgusted and quit looking for work, on food stamps, and on disability than anytime in our history.”

But the December jobs report says that unemployment dropped from 7.0% down to 6.7%. Doesn’t that show that the economy is improving? Well, no. Almost all of the reaction, other than from hopelessly partisan hacks, says that the report is bad news. E.g. CNN described it as “weakest job growth in years”, USAToday referred to it as “unexpectedly weak jobs report”. Many reported that there were “only” or “just” 74,000 new jobs, the worst in almost a year. (UPDATE: The January Jobs Report is better but “is another disappointing jobs report”. “Job growth remains weak,” “disappoints again”.)

Not so well known is that jobs have to increase by about 150,000 every month just to keep up with the increase in population. Since 2009, when the recession supposedly ended, the civilian population age 16 and above has grown from 236 million to 246 million. Meanwhile, the number who were employed grew from 140 million to 144 million. In other words, of the 10 million who entered the working age population, only 4 million found a job.

Compare the current “recovery” with two others. From 1983 to 1987, population grew by almost 9 million; jobs by almost 12 million. From 1993 to 1997, population grew by a bit over 8 million, jobs a bit over 9 million. Those were strong recoveries – employment grew even faster than population. In the eleven recoveries since they started collecting statistics in 1948, the current recovery is by far the weakest and slowest.

US News magazine has a fascinating chart from the Federal Reserve of St. Louis. It shows both the unemployment rate and the EMployment rate from 1948 through 2013. They show the data for employment and unemployment separately because the two are calculated differently. But for more than 60 years, covering 10 recessions, employment and unemployment are mirror images of each other. When employment goes up, unemployment goes down and vice versa.

This time is different. For the first time in the history of these employment statistics, employment is NOT moving up. By the government calculations, unemployment has improved but employment as a percentage of the population has held steady for four years at a level much worse than we have seen for 30 years.

employment to population

But how can unemployment go down without employment going up? If you stop being unemployed doesn’t that mean you are employed? Well, no. Many people are not counted as either employed or unemployed; they are counted as “Not in labor force”. If you have been unemployed for so long that you give up looking, then you stop being counted as unemployed, and are instead counted as no longer in the labor force.

A record high 92 million people are counted as no longer in the labor force, an increase of 10 million in just 4 years. Some people will say that it is because baby boomers are retiring. That’s a nice theory but the numbers say otherwise. Those aged 55 and above have actually seen their employment numbers grow by 6 million people. It is the younger workers from 16-54 who have lost jobs – 8 million jobs.

In the four years of the current “recovery” the number of Millennials working full-time has decreased every year. The number living at home with their parents has grown every year. This is a human tragedy.

On top of all the ongoing poor employment numbers, the non-partisan Congressional Budget Office (CBO) recently estimated that ObamaCare will cost 2.3 million jobs by 2021. Apologists quickly countered that it would not be because people lost their jobs; rather it would be because people decided not to work. “When Americans quit looking for work because they conclude not working beats working, America faces a significant problem” says a white paper from Express Employment Professionals.

Some say that were are in a “New normal”. Many of us – I hope most of us – do not believe in a “fate that will fall on us no matter what we do.” For most of its existence, the United States has been the freest, most prosperous nation on earth. It is long established that freedom and prosperity go hand in hand; more freedom produces greater prosperity.

Sadly, the U.S. has moved away from freedom to a more and more intrusive government. The Index of Economic Freedom reported just last month that “The U.S. is the only country to have recorded a loss of economic freedom each of the past seven years.” Hmm, could that explain the awful employment?

Great article by Rand Paul

One of Rand Paul’s strengths is that he connects well with his audiences. This article is addressed to college students but has a good message for all of us.

The federal government now attempts to micromanage American life at practically every level.

The government tells you what kind of lightbulbs you can buy, what kind of toilet can be in your home, how much water can come out of your showerhead. Privacy is seemingly an antiquated notion, with government snoops able to access third-party records, such as phone records, e-mails, financial records, and pretty much any other personal information they want, without a judge’s warrant.
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America has drifted away from the constitutional principles of limited government, separation of powers, and individual liberty.
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We need to do a better job of communicating why big government is the problem—why it is bad for the economy, freedom, and a restrained, yet strong, foreign policy.
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conservative solutions are tangible too. We’re not just saying no to more government. Our proposals will lead the way to more prosperity, more stable families, political decisions made at the local level, a dollar that holds up in a global marketplace, an education system that puts students and parents first, a vibrant culture supported by religious institutions, and opportunities for young people like you to grow and lead America into a renewed age of freedom.
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Our political opponents and the media like to portray conservatives as unconcerned about the poor, senior citizens, and minorities. Nothing could be further from the truth. But we need to do a better job of communicating the promise of conservatism, not simply the failures of liberalism. We advocate not for special privileges for “the rich” but rather for a flourishing economy that lifts everyone up, creating millions of jobs and lessening the burden of taxes and government regulation.

We need to shout to anyone who will listen, “More freedom and less government means more jobs, more wealth, and a better life for everyone.” Despite the trillions of taxpayer dollars spent on bailouts and “stimulus” plans over the past several years, the economy hasn’t fully recovered from the Great Recession.

One in six Americans lives in poverty, more than at any other time in the past several decades. This is unacceptable.
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Decentralization of power is the best policy. Government is more efficient, more just, and more personal when it is smaller and more local. By decentralizing government, we strengthen communities, allowing people to depend on and care for one another, rather than on some distant, incompetent bureaucracy masquerading as defender of the common good. This is a message we need to do a better job communicating.

Read the whole thing.

Scott Walker: stand on conservative principles

In a WSJ op-ed, Gov. Scott Walker says that the way he won the center, even including many Obama supporters, was by showing “the courage to stand on principle”. Against enormous pressure, he stood up for conservative principles.

The way Republicans can win those in the middle is not by abandoning their principles. To the contrary, the courage to stand on principle is what these voters respect. The way to win the center is to lead.

That’s why those arguing that conservatives have to “moderate” their views if they want to appeal to the country are so wrong. If our principles were the problem, then why are so many Republican governors winning elections by campaigning on them? Since Barack Obama took office in 2009, the GOP has gone from controlling both the legislature and governor’s mansion in nine states to 23 states today. Not one sitting Republican governor has lost a general election since 2007.

Republicans did not win those races by running from principles. They won by applying principles in ways that are relevant to the lives of citizens.

… Republicans focus on improving education, caring for the poor, reforming government, lowering taxes, fixing entitlements, reducing dependency, improving health care, and creating jobs and opportunity for the unemployed.

Republicans need to do more than simply say no to Mr. Obama and his party’s big-government agenda. They can offer Americans positive solutions for the nation’s challenges—to reduce dependency, and create hope, opportunity, and upward mobility for all citizens. They need to make not just the economic case for conservative reforms but the moral case as well—showing how conservative policies and ideas will make America not only a more prosperous society but a more just and fair one as well.

Too many people in politics today spend their time trying not to lose instead of trying to do the right thing. They would better serve the country by worrying more about the next generation than the next election. The irony is that politicians who spend more time worrying about the next generation than about the next election often tend to win the next election—because voters are starved for leadership.