How can this be happening?

The Red Ranger: Just another sign that the Obama economy is a disaster.

How can household income be going down since the recession was over?  Shouldn’t income go up in a recovery?  If not what is the definition of a recovery?

I do not solely blame Obama for this but he is a big contributing factor.  Look what Obamacare is doing to jobs in this country.  75% of new jobs are part-time.  Companies are cutting back people’s hours so that they do not fall under Obamacare.  Now companies are starting to cut out spousal medical benefits if they can get them elsewhere.  I honestly believe that the vast upheaval in the medical insurance arena is exactly what Obama and the Dems want.  They want it all to fall apart so badly that a government run and controlled healthcare system looks better and better to the masses.

We are on the long inexorable match toward a fully socialist society.

Nattering Naybob: There are many factors at play here, and I am gratified that you are not blaming Obama solely. One factor that you fail to mention is income inequality. Corporate profits and the salaries and pay packages for corporate CEOs are at an all-time high. And this article from the New York Times (a little lengthy but well worth the time investment) lays out a frightening situation of how poorly these United States stacks up in a host of human metrics. And I do not think any one person as President can make a difference until we find a way to bridge the partisan divide. I think that is the single key issue in all of this that has to be overcome.

Regarding your claim that “Obama and the Dems” want the medical insurance industry to fall apart… I think that is not an accurate characterization. Conversely I believe that a Socialist form of healthcare for people whose circumstances prevent them from otherwise getting access–without disrupting the extant health care coverage and apparatus for people with them means to purchase more comprehensive coverage–is not a bad thing. I think Obama’s biggest mistake in the run-up to his healthcare legislation was not including a simple “Medicare for all” provision, which some have referred to as the “public option”. But Obama thought that excluding this option would signal a willingness to compromise with the Republicans, which would then reap benefits later. But Obama failed to realize that Republicans in Congress now, are generally not sane people.

The Red Ranger: I believe that this income inequality has accelerated under Obama and he has done nothing to reverse the trend.  While CEO’s are an easy target given their sometimes outlandish pay packages I do not think that this is really the root cause of the issue just due to the mere fact that there are so few of them.

In regard to healthcare, I too believe that there should be a fallback for those who cannot help themselves.  But again, like in so many other discussions I have a hard time when those you won’t help themselves or make bad decisions piggyback with those who cannot help themselves.

Natterng Naybob: Unfortunately I think that it has to be considered “the cost of doing business” if any type of assistance or relief program, counts among its rolls those who are truly undeserving whether it be the result of fraud or recklessness. I am all for the vigilant weeding out of these miscreants. But I am opposed to punishing those who are truly needy and have had some honest misfortune in their lives from getting help, because of the (what I regard to be) statistically low instances of the fraud or undeservedness of others.

Oops…

The Red Ranger: So last week came news that the GDP shrank in the 4th Qtr. by -0.1%.  We are halfway to a recession.  Although these numbers will probably be revised to show a 0.1% increase so that Obama can avoid a recession at least for the time being.  I am glad he is being laser focused on the economy and job creation, has he mentioned anything about that recently.  I guess he is too busy trying to get 11 million illegal aliens to be citizens and taking away people’s constitutional rights to own guns.

One interesting tidbit is that some of the decline seems to be due to lower government spending mainly military related.  If that trend holds true then that is a long-term positive for the economy.  Also, consumer spending was up about 2% but that will probably be wiped out in Q1 2013 with the increase in payroll taxes.

Overall, we continue to muddle along with the only thing really keeping us afloat is the Fed continually pumping dollars into the economy.  However, that is going to have to end soon.

Nattering Naybob: Meanwhile the stock market is nearing an all-time high. Not to mention corporate profits setting records the past calendar year. Perhaps this is evidence that what’s good for Wall Street is not necessarily good door for Main Street, a cliché’ to which The Red Ranger has subscribed in the past.

The metrics that you cited were only a few of the many that trended upward in the recent economic reporting. The bottom line is that the severe cuts that have been mandated by Republicans, and the Republicans’ threat to shut down the government if their extortionist threats are not met, are the main causes for the shrinking of the GDP. Quit fear-mongering this issue, my good man.

The Red Ranger: You are correct in your analysis that what is currently good for Wall Street may not necessarily be good for Main Street.  The underlying reason for this is due to the fact that the Fed is artificially reducing interest rates and pumping dollars into the economy to mask the fact that there is no job creation under Obama.

Can you provide proof of other metrics ticking upwards.  I believe that consumer confidence fell to its lowest level in a number of years.  Rather than calling the cuts mandated by Republicans severe I would call them necessary to offset the reckless spending and additional debt accumulation that has occurred under Obama’s drunken sailor-like spending ways.

Nattering Naybob: The Consumer Metrics Institute, which has been one of favorite websites since the advent of the Internet, lays out many positive economic indicators. Only in this era of Republican obstructionism can there actually be a substantial decrease in government spending (which is what your gang of ruffians has been clamoring about for decades) yet Obama gets blamed for its resulting perceived temporary adverse impact on the economy.

The Red Ranger: Interesting website.  I briefly perused it and noted that they were seeming to imply that the Obama administration pushed DOD expenditures into the third quarter to show an inflated view of the GDP growth in Q3 prior to the election.  Of course we all know that that could not of possibly happened since the Obama administration is the first administration in US history to be completely open, honest and free of any ulterior motives.

Also, I believe that the President has again managed to miss the deadline for submitting a budget.  Of well it is only a law that he submit a budget by the first Monday in February.

Nattering Naybob: Funny how I don’t ever hear you complaining about the Republican practice of Gerrymandering to garner electoral advantage, the same way I hear you complaining about some mis-understanding regarding the submission of a budget or some such trivia.

The Red Ranger: I believe that both parties engage equally in gerrymandering which I am not sure is illegal.  Whereas not submitting a budget in a timely fashion is a crime.

Our biggest problems, Part two

This is Part 2 of an examination of The Red Ranger’s seven of “Our biggest problems” (see Part 1 here). We resume with…

 The Red Ranger:
Issue # 5: Rising gasoline prices 
Gas prices, which seemed to be heading downward several months ago, have now gone in the opposite direction and are nearing $4.00/gallon again; they may already be there in some parts of the country. In regard to gasoline prices I believe that this is one area where some greater control may be warranted. It has always baffled me how the impact of any negative event always has the immediate impact of increasing gas prices but the effects of positive events are always muted and delayed. I rate this impact as MINIMAL at this time, only because we have become accustomed to higher gas prices since Obama took office and made that his goal.

Nattering Naybob: There is very little that Presidents can do to influence gas prices. Any President is in a “damned if you do, damned if you don’t” bind when it comes to steering the country towards sources of energy other than petroleum derivatives. If he (or “she”, someday, hopefully in 2016) takes steps to divert demand away from the oil industry, Republicans (and some Democrats from oil-producing states), cries foul. Regarding the charge that Obama “made [it] his goal” to increase oil prices, that is nothing more than another urban myth propagated by Republicans while sitting around their “Get Obama” campfire. In the March 13th edition of “The Fact Checker”, the Washington Post gave this bogus claim, “Three Pinocchios”. The article is a little lengthy but it covers all sides of whether he did or didn’t.

The Red Ranger: So in reading the article, Obama didn’t come out against higher gas prices initially but wanted to put more money in people’s pockets. Is this just another veiled attempt for wealth redistribution where lower income families would get more money to pay for their gas at the expense of higher income families. He didn’t come out against higher gas prices until he realized his initial statement was causing him grief. Also, Energy Secretary Chu, has stated that the US needs to get its gas prices as high as Europe. I have not heard Obama refute that statement and since Chu is part of Obama’s administration I have to believe he supports this position.

Nattering Naybob: I see… when Obama wants to put more money in people’s pockets, it is “wealth distribution”. When Obama is perceived as taking money out of people’s pockets, he is accused of… well, taking money out of people’s pockets. This is typical of the Modern Republican habit of ALWAYS having some kind of “yeah, but” response for every scenario no matter what happens. If Obama suddenly announced that he had discovered a definitive, final cure for cancer, your reply would be “he should have allowed the private sector to cure cancer”, or “what took him so long to cure cancer, he’s been in office over three years”, or “sure, he cures cancer NOW…. right before the election. What a cheap stunt”. Regarding the statements made by Chu, these were uttered BEFORE he joined the administration, and Chu recanted them subsequently, as outlined in an article in USA Today by David Jackson on March 14th, 2012:
 

As for Chu’s comment, White House spokesman Jay Carney said critics “who try to suggest that the statement of someone who wasn’t even in government at the time is somehow a more significant indicator of the president’s policy than the president’s policy are engaging in politics on this issue.” After yesterday’s Senate hearing, Chu himself said: “There is a real hardship that Americans are suffering at the gasoline pump. The recovery is fragile. Another spike in gasoline prices could put that recovery at jeopardy. So there are many, many reasons why we do not want the price of gasoline to go up.”

The Red Ranger: Chu recanted his statement so that gullible people like yourself would be fooled into thinking that this wasn’t the Energy department’s policy going forward.  Or maybe Chu really was so desperate for the position that he was willing to give up his stated beliefs and make a 180% change on policy  just to get the position (unlikely).  Am I to believe that there wasn’t one equal candidate to Chu out there who was on the record agreeing with Obama’s policy without having to recant prior statements.

….On to Issue 6: Stagnant wages
This is one of the major obstacles to future prosperity in the US. Unless you are part of a government union, meaningful wage increases are getting harder and harder to come by. As world economies become more and more intertwined wages are tending toward an equilibrium that is above those in third world countries but below those in developed countries thereby raising the standard of living in some countries and lowering it in others. I don’t really see how the US can grow with wages increasing at 2% and basic necessities increasing at 4%. We will all be doing without in the future. I rate this one as SEVERE.

Nattering Naybob: Not much argument here that wages are stagnant. I think that American workers as a whole have become the victims of their own productivity. Corporate profits are at an all-time high as detailed in this June article from business.insider.com, but wages remain, conversely, at an all-time low based on real-dollar adjustments. From my decidedly “un-studied” perspective, I think there are two problems with this, first, why would corporations high more workers if the ones the ones they have, keep taking on more responsibilities in the wake of the layoffs and downsizing of the last decade or so? Second, the workers who DO remain employed, trying to avoid the specter of unemployment in this tough job market, seem only too willing (understandably) to take on this extra work if it means saving their own job.

There are other factors to this, including the erosion of unions, woeful inadequacy of the minimum wage, the eagerness to send American jobs overseas to workers who are content to receive literally pennies on the dollar compared to wages (however stagnant) back in America… but these topics are too complex to talk about in this post, perhaps a future SGM offering.

The Red Ranger: Agree with your thoughts on workers. I certainly am constantly taking on more responsibilities but like you astutely point out that with my improved productivity I can take them on without as much hardship as in the past. I disagree with your comments about unions as I believe that unions are one of the biggest causes of our issues in the first place. Why do federal employees need unions (I believe that even FDR said that was wrong). The same progressives who tout the benefits of government largess are the ones who belong to unions to protect them from the evil government who may force them to work too much. Not to rile up our loyal readers too much but why do teachers need unions?  So now the Chicago teachers go on strike throwing 400,000 kids out into the streets of Chicago. Just what Chicago needs given the lawlessness that is running rampant there currently. If the teachers truly cared about their students they would work without a contract. If one kid who should have been in school gets killed during the strike they should throw the head of the teacher’s union in jail.

Nattering Naybob: Using the trademark Red Ranger reasoning, if a teacher invokes their contractual right to strike, and a child is “killed” as a result (specious as that connection may be), is that the same thing as when a Republican governor tries to eviscerate a police department, or cuts firefighters to pay for a tax cut for the rich, and someone dies as a result, is that governor responsible for the death? And please explain the criteria for forming a union? Why should public sector employees be prevented from forming unions? Or are you against the concept of unions totally?

The Red Ranger: Chicago teachers are just about the highest paid in the country and have the shortest workday. Chicago is facing serious financial challenges, funny how that happens when you have Dems in charge and they consistently spend more than they bring in. While they may have the right to strike that doesn’t make it the right thing to do.Just like the Dems, and you in a previous discussion, view the constitution as an outdated document that has not kept up with the times, I view unions as outdated and unnecessary except in a few limited conditions.

Nattering Naybob: I think you had a seventh problem, any chance we can defer this to another post?….

The Red Ranger: No…

Issue # 7: The fiscal cliff is coming
Given the current makeup in Congress I do not see how anything productive will arise on this problem. I am hoping to be pleasantly surprised but am not holding my breath. 

We are on the fringes of the perfect storm. Since the consumer drives 70% of the US economy we are on the precipice of a very long and scary decline. I just do not see any way around it at this time. The Fed cannot do much more to stimulate the economy. QE1 and QE2 have basically just kept us afloat. Any future QE will just do the same. If the Fed is doing QE 6,7 and 8 isn’t safe to say that the QE efforts did not work otherwise they would not have had to keep doing them.
Rating is ON HOLD, pending future decisions to address.

Nattering Naybob: My response is simple. Until both parties put aside their differences and come up with a plan in which they both give up something, and walk hand-in-hand “over the cliff”, so that one party does not seem to be solely wearing the black hat, nothing will get done with regards to the fiscal cliff. Hopefully after Obama is re-elected (a prospect that has become more likely since the respective Conventions, as reported by the reliably non-partisan and insightful political prognosticator Nate Silver), the Republicans will stop trying to impede Obama at every turn and realize that the American people come out the losers when partisan ideology trumps all.

The Red Ranger: No surprise that Obama gets a bump after the way the conventions were handled by the media.  Any short-term bump from the skewed coverage will shortly wear off after another dismal jobs report.  Maybe my next topic will be about the way the administration distorts the jobs figures. 

Natering Naybob: Another odious and tiresome Modern Republican tactic: Obama receives good poll numbers, it is the work of the fawning, liberal, “main stream media”. Obama receives bad poll numbers, “the American people are finally rejecting his Socialist agenda”. Red Ranger, we all understand the Modern Republican shtick, and we are tired of it.

The Red Ranger: I know you cling to the belief that CBS, NBC and ABC are the bastions of true and honest journalism but those days are long gone.