Today in 1968, Jimi Hendrix recorded “All Along the Watchtower,” musically assisted by Brian Jones of the Rolling Stones and Dave Mason of Traffic:
The number one album today in 1978 was the best selling movie soundtrack of all time:
Daniel J. Mitchell examines Islamist … taxes:
Based on my writings, some people may think I’m 100 percent against higher taxes.
But that’s not exactly true. In some cases, I like punitive taxation. Or, to be more precise, I sometimes take pleasure when punitive tax policy backfires on bad people.
Here’s an example. An interesting article in Slate, authored by Adam Chodorow of Arizona State University Law School, looks at how a terrorist group’s attempt to form a government is being stymied by an inability to collect taxes.
Revolution is easy. Governing is hard. And there are few things more difficult than taxes. Operating a country requires money, and that typically requires taxes. …
The population in this area is estimated to be between 7 million and 8 million, about the same as the population of Washington state. While ISIS currently collects about $1 billion annually, countries of similar size collect about $16 billion, suggesting that ISIS has a long way to go if it wants to operate like a real state.
But the comparatively low levels of tax revenue are not because of a Hong Kong-type commitment to limited government.
Instead, the terror group is discovering that people don’t like giving their money to politicians and bureaucrats, even ones motivated by Islamic fundamentalism.
Taxes aren’t a great way to ingratiate oneself with the governed. … More than one government has fallen because of its tax policy. ISIS must face these challenges just as any emerging polity does… ISIS may have displayed prowess on the battlefield, but it has revealed that it is as stymied and constrained by the complexities of taxation as the rest of us. …
ISIS’s taxes appear to be … no more popular in the territory it controls than they would be here in the U.S. As the Times reported, ISIS’s taxes are now so onerous that large numbers of people, who were apparently willing to tolerate ISIS’s religious authoritarianism, are fleeing Syria and Iraq to escape them. At some point people will either rise up or leave, threatening ISIS’s internal revenue source.
So taxes are becoming so onerous that taxpayers (and taxable income) are escaping.
Hmm… excessive taxation leading to less taxable economic activity. That seems like a familiar concept — something I’ve written about one or two times. Or maybe 50 or 100 times.
Ah, yes, our old friend, the Laffer Curve!
ISIS is … constrained by a lack of administrative resources and the simple reality once sketched on the back of a cocktail napkin by the economist Arthur Laffer: that tax rates can only get so high before they actually drive down government revenues.
Given current conditions, ISIS may be near or at the limits of its ability to tax, even if it can recruit jihadi tax accountants to its cause. Thus … it’s not clear how much room the group has to grow internal revenues. More important, its efforts to do so may do more to damage its prospects than outside forces can accomplish.
This sounds like the tax equivalent of War of the Worlds, the H.G. Wells’ classic in which alien invaders wreak havoc on earth until they are felled by bacteria.
Tom Cruise was the star of a 2005 movie adaptation of this story, but I’m thinking I could rekindle my acting career and star in a movie of how the Laffer Curve thwarts ISIS!
But to have a happy ending, ISIS has to be defeated. And Professor Chodorow closes his article with a very helpful suggestion.
Rather than send in ground troops … view our tax code as a weapon of mass destruction. … We could make full use of it in the war on ISIS, perhaps by translating it into Arabic in the hopes that the group adopts it.
Sounds like the advice I once gave about threatening Assad with Obamacare.
Proof of yet another area where Barack Obama is a complete disaster comes from Jalopnik:
The National Transportation Safety Board just released its Most Wanted list for 2016. In hopes to end the boozing and the cruising once and for all, the agency wants states to drop their drunk driving blood alcohol content limit from .08 to .05 or lower.
The NTSB, an independent federal agency whose main jobs are to determine the cause of transportation accidents and to promote safety on our roadways, has been after a lower blood alcohol content limit for years now. We wrote about their proposal to bring that limit down to .05 back in 2013, and it looks like they’re still not backing down.
With a sub-heading “End Substance Impairment In Transportation,” the NTSB 2016 Most Wanted List Of Transportation Improvements discusses the prevalence of driver impairment in fatal accidents and proposes ways to reduce such tragedies.
The board’s suggestions include heavier use of sobriety checkpoints, ignition interlocks to prevent drunkards from starting their cars, treatment and supervision of repeat DUI offenders, and lowering the DUI blood alcohol content limit from .08 down to .05. …
This limit would mean your average american could consume only approximately two drinks in an hour, and that doesn’t jive well with the folks who want to sell you alcohol. The American Beverage Institute, a trade group based in Washington D.C. that lobbies for alcohol-serving restaurants, is pissed about the NTSB’s suggestion. The group’s managing director, Sarah Longwell thinks the proposal is targeting the wrong people, telling The Hill:
Instead of targeting the heavily intoxicated drivers who cause most fatal drunk driving crashes, the NTSB wants to penalize responsible adults who enjoy one or two drinks with dinner.
Longwell thinks we’ve been there, done that, saying:
More than a decade ago, we lowered the legal limit from 0.1 percent to 0.08 after groups like Mothers Against Drunk Driving promised a huge drop in fatalities. Yet the proportion of traffic fatalities caused by drunk drivers has remained the same for the past 15 years. Why would moving to .05 suddenly stop truly drunk drivers from getting behind the wheel? The fact is, it won’t.
… But you have to wonder: if states decide to follow the NTSB’s advice and drop the limit, how many more Americans will end up with DUIs? How many Americans currently regularly drive with a blood alcohol content between .05 and .08 after a night on the town?
Sobriety checkpoints are as unconstitutional as speed- or red-light cameras. Given the Obama administration’s blatant disregard for the Constitution, it’s hardly surprising that Obama’s NTSB favors more of them.
The bigger question is whether or not reducing the legal intoxication level will actually lead to more drunk driving arrests. It actually won’t, at least until more totalitarian traffic law enforcement accompanies the lower levels. Police officers have to have probable cause of a traffic violation to pull over someone. Drivers do not generally get arrested for drunk driving right at .08. Ask your nearest law enforcement officer to estimate the average blood alcohol level of his or her drunk driving arrest. You’d be surprised how high the number is.
Elizabeth Harrington adds:
The agency issued the recommendation while admitting that “the amount consumed and crash risk is not well understood.”
“We need more and better data to understand the scope of the problem and the effectiveness of countermeasures,” they said. …
The National Transportation Safety Board also is seeking a ban on hands-free technology in cars.
“Hands-free cell phone use causes cognitive distraction,” said Christopher Hart, acting chairman of the National Transportation Safety Board, during a press conference announcing the recommendations.
“We have recommended prohibiting all cell phone use, including hands-free, because a driver’s mind must be on the driving, just as their hands must be on the wheel,” he said.
The agency called for a “cultural change” for its recommendation, since no states or the District of Columbia currently outlaw hands-free devices.
“Since people have limited attention, each auxiliary task impairs our processing of the primary task. For safety-critical operations, distraction must be managed, even engineered, to ensure safe operations,” according to the agency’s recommendations.
So logically the NTSB favors eliminating roadside features such as signs, other vehicles, and passengers. They are all distractions.
The number one British single today in 1966:
The number one single today in 1968:
The number one single today in 1975:
Stanley Kurtz writes on the biggest city outside southwest Wisconsin:
Welcome to the world of “Affirmatively Furthering Fair Housing” (AFFH), President Obama’s transformative new regulation. How will AFFH work? The city of Dubuque gives us one of our best and most frightening previews yet. I hope the presidential candidates are watching, because Obama’s new AFFH regulation and the Dubuque fiasco ought to be an issue in this year’s Iowa caucuses. I also hope American citizens pay attention to the travesty in Dubuque, because it’s not too late to save your hometown from Dubuque’s fate. (I’ll tell you how to do this below.)
An account of Dubuque as a forerunner of a post-AFFH world comes to us courtesy of a stunning report by Deborah Thornton, a policy analyst for Iowa’s Public Interest Institute. The report tells the story of how Dubuque was pressured to cede large swaths of its governing authority to the Department of Housing and Urban Development, which has forced the city to direct its limited low-income “Section 8” housing resources, not to its own needy citizens, but to voucher-holders from Chicago.
Unlike the more familiar forerunner of AFFH, Westchester County, Dubuque is not an upper-middle-class suburb but a small and economically struggling city. At $44,600, median income in Dubuque is well below the state median of $51,843. Like other nearby Mississippi river towns with aging populations, Dubuque is hard-pressed to provide good jobs and decent housing for the low-income people already there: poor families with children, retired elderly, and disabled adults. The city’s priority is to revive its economy by keeping its young people from moving away, and by attracting new residents who are willing and able to start businesses. Like any city, Dubuque’s first obligation is to see to the needs of the citizens who already live there, vote, and pay taxes. Or so it was in pre-AFFH America.
Our story begins about eight years ago. Just as Dubuque was reeling from the effects of the 2008 recession and dealing with an uptick in its own low-income housing needs, the city was hit with a wave of “Section 8” low-income housing voucher applicants from Chicago. A few years earlier, Chicago had systematically demolished its most drug- and crime-ridden high-rise public housing facilities, using grants from HUD. Yet through its own mismanagement, Chicago had failed to properly replace its now depleted low-income housing stock, leaving many Chicago residents looking to use their Section 8 vouchers elsewhere.
With many more Section 8 applicants than it could house, Dubuque instituted a low-income housing point system granting preference to Dubuque residents, county residents, state residents, and out-of-state residents, in that order. Although HUD’s rules ostensibly allow localities to craft their own housing priorities, Dubuque’s point system was deemed unacceptable by HUD. The feds undertook a review of Dubuque’s housing policy that effectively treated the city as part of greater Chicago.
This, of course, is ridiculous. Dubuque is 200 miles and a four- to five-hour drive away from Chicago, even without traffic. And of course the two cities are in different states. But by effectively treating Dubuque and Chicago as part of the same “region,” HUD was able to declare Dubuque’s low-income housing point system discriminatory. Since the vast majority of Section 8 applicants from Chicago were African-Americans, Dubuque’s preferences for citizens of its own city, county, and state were deemed racist. HUD insisted that Dubuque would have to admit housing applicants in conformity with the demographics of the larger (HUD-defined) region. Somehow Dubuque had become a satellite of Chicago.
Having previously accepted HUD funding through the Housing Choice Voucher (Section 8) program, as well as HUD’s Community Development Block Grant program, Dubuque was formally obligated to “affirmatively further fair housing” in whatever way HUD defined that obligation. Refusal to submit to HUD’s dictates would have led to the withdrawal of federal funding, a lawsuit for supposed discrimination, or both. The cowed elected officials of Dubuque accordingly signed a “voluntary” (in truth, forced) consent agreement that effectively ceded control of the city’s housing policy to HUD for at least five years.
Under HUD’s detailed oversight, Dubuque must now actively recruit Section 8 voucher holders from the Chicago area. In fact, as of January 2015, the percentage of African-American voucher users in Dubuque was larger than the percentage of African-Americans living in Chicago. The problem is that very few of these new public housing residents have ever lived or paid taxes in Dubuque, or even Iowa. The feds have essentially commandeered Dubuque to solve Chicago’s public housing shortage. HUD’s diktat also imposes a huge administrative burden on Dubuque, with monthly, quarterly, annual, and five-year plans to be filed and followed up on. (Yes, a “five-year plan.”) Having “voluntarily” consented to a federal takeover, Dubuque is now obligated to follow HUD’s every command for at least five years.
Thornton rightly notes that Dubuque is a template for the coming implementation of AFFH. The rule will make it easy for HUD to effectively annex other Iowa river-towns—like Clinton, Davenport, and Burlington—to greater Chicago, although those cities are no closer to Chicago than Dubuque. The same pattern will play out nationally under AFFH, Thornton warns.
In a post-AFFH world, every region of the United States will be compelled “to meet nationally determined standards for the management and makeup of every aspect” of local life, says Thornton. AFFH will also force local communities into regional consortia directed by what Thornton calls “unelected governing boards who do not represent the voters.” Those electorally unaccountable regional commissions, she continues, “will set targets for the desired percentage of ‘types’ of people to live in each area of the region.” Cities and businesses, “buried under mounds of paperwork,” will have no choice but to submit.
How can a housing rule control every aspect of local life? It’s far easier than you might imagine. AFFH redefines “fair housing” to include proximity to transportation, jobs, and schools. This will effectively extend the power that HUD now exercises over Dubuque’s housing policy to nearly every other aspect of local development and planning. Under AFFH, once a town takes HUD money, it effectively loses control not only over housing but schools, zoning, transportation, the environment, and business location. As Thornton concludes, “If you take their money, you play by their rules.”
Dubuque shows that, over time, Obama’s AFFH rule could spell the end of local government in America. Thornton rightly warns against the regional consortia provided for in AFFH. Once HUD pressures a municipality into such a regional governing entity, local control is lost. But the Dubuque case strikes me as an even scarier precedent than Thornton implies. A city may not even have to formally join a regional consortium to lose its capacity for self-government.
After all, HUD didn’t need to force Dubuque to formally join a regional consortium in order to turn it into a satellite of Chicago. All the feds had to do was classify Dubuque as part of greater Chicago, then judge the city’s housing demographics as out-of-balance with reference to the racial and ethnic make-up of the region as a whole. At that point, a trumped-up charge of racism and threats to withdraw funding or file a lawsuit “logically” followed. Without joining anything, Dubuque is for all practical purposes now part of Chicago, essentially because HUD has declared it so.
AFFH makes this trick particularly easy to pull off because the rule instructs all localities in receipt of federal grants to analyze their housing practices with reference to “regional data” provided by HUD. By forcing every town, small city, or suburb that takes HUD money to evaluate the “fairness” of its demographic mix with reference to the demographics of the nearest mega-city, HUD can effectively institute regional government in America by fiat. If the ethnic mix of your town is substantially different than the ethnic mix of a city even 200 miles, a five-hour drive, and another state away, you will have to recruit that city’s dominant ethnicities to populate your low-income housing, so long as HUD declares you to be in that “region.” As Iowa is to Chicago, so may New Hampshire soon be to Boston. Are you listening presidential candidates?
In its story on the announcement of AFFH, The New York Times quoted Secretary Julian Castro downplaying HUD’s intended enforcement efforts. Castro portrays the cutoff of federal funds as a last resort that he barely intends to use, if at all. Dubuque makes a mockery of Castro’s claim, unless you credit the absurd pretense that the Dubuque’s compliance agreement was in fact voluntary, rather than the response of a financially-strapped town to threats of federal defunding and/or lawsuits—threats levied on the basis of a thoroughly contrived “regionalist” premise. When it comes to housing, Secretary Castro is now forcibly controlling virtually every move Dubuque makes.
Come to think of it, Dubuque may not be in the state of Chicago after all. What state is Dubuque really in? If you answered H.U.D., you are correct.
If you don’t want your hometown to become the next Dubuque, there’s something you can do to prevent it right now. Organize your neighbors and force your local government to stop taking HUD money. (For more on how to do this, go here.)
What was Dubuque’s response? Kurtz posted this Friday:
Today’s Dubuque Telegraph Herald features a story on the reaction of local and federal officials to my account. Bottom line: they’re angry about the piece but refuse to provide any evidence that it’s mistaken. Dubuque City Manager Mike Van Milligen says “the city will not respond to the author’s opinions,” but claims my story is a mere blog post containing inaccuracies. So Millgen says my story is inaccurate, but he refuses to explain what’s mistaken. Meanwhile, HUD’s lead spokesman, Brian Sullivan, dismisses my article as “apocalyptic,” without explaining why it’s wrong. Fortunately, the Telegraph Herald gave me a chance to respond to charges of political bias. If this is the best HUD can do to parry claims of federal overreach, they are in serious trouble once the country gets wind of the truth about AFFH.
Mike Rowe claims …
I’ve just received a request from The White House! On behalf of The President, I’ve been asked to share some talking points directly with each one of you, regarding the need to expand background checks on those citizens who wish to purchase a gun!
Just kidding.
For some reason, I was not among those celebrities selected to assist The White House in this endeavor. I’ve since recovered from my initial disappointment, and identified three possible explanations for the oversight.
1. The White House did not ask for my assistance, because they do not believe I’m famous enough to persuade anyone of anything.
2. The White House did not ask for my assistance, because they do not believe I would tweet out someone else’s words and claim them as my own.
3. The White House did not ask for my assistance, because they do not believe I support background checks.
With respect to #1, The White House is correct. My powers of persuasion, like my celebrity, are limited.
Regarding #2, The White House is correct again. I would never post someone else’s talking points as if they were my own. My own particular brand of hubris requires me to use my own words, which is probably why everyone in my office has developed a permanent facial tick.
As for #3 though, The White House would be mistaken to assume that I oppose background checks on gun purchases. I do not. I’m just skeptical that expanding a broken system is the best way to keep guns away from bad guys and lunatics.
Currently, thousands of people deemed mentally incompetent by the courts are NOT registered in our National Check System. That’s insane, if you’ll pardon the irony, in part because it’s so easily correctible. Likewise, The ATF says that most states report less than 80% of their felony convictions to the national system. As a result, nearly 7 million convicted felons are not currently registered. Is it any surprise that nearly every mass killer in recent memory passed a background check?
Seems to me, our current system is only as good as the records in it, and right now, those records are laughably incomplete. But even more troubling are the tens of thousands of people who ARE in the system, that keep trying to buy guns illegally with absolutely no consequence.
Lying on your application to purchase a firearm is a federal offense, but very few are prosecuted for doing so. According to Politico, the Feds have prosecuted just 1.5% of all those individuals who have attempted to purchase a gun illegally. If my math is correct, that means 98.5% of people who are NOT allowed to own a gun, have not been prosecuted for trying to buy one.
Maybe it’s a manpower problem? Maybe it’s a resource problem? But whatever the reason, many thousands of individuals who try to purchase a gun illegally are allowed to keep on trying. Many eventually succeed, and then use that gun in the commission of a crime. This strikes me a serious problem. And yet, I’ve received no tweets from my favorite action heroes, asking me to support an effort to fix the system we have. Why is that?
To be clear, I’m not a member of The NRA. Last time I joined a club it was The Boy Scouts, and that was a long time ago. But from what I can tell, the NRA is not the reason that so many criminals and lunatics are able to buy guns today. Nor do they appear to oppose the kind of overhaul that would give us a more effective check system. In fact, wasn’t it The NRA that demanded background checks back in the mid-nineties, the moment the technology was first made available?
Regardless, we now possess the technology to update and maintain an accurate data base of felons, lunatics, gang members, terrorists, B-list celebrities, and other unsavory types that we can all agree should never be allowed to own a weapon. We also possess the ability to identify and prosecute anyone who attempts to buy a gun illegally. But if we don’t have the resources or the commitment to administer and enforce the system we have, why in the world would we want to make it bigger?
#When there’s a hole in your net, you don’t need a bigger net; you need a smaller hole.
#When your foundation is shaky, you don’t keep building on top of it, you knock it down and start over.
Should The White House ever find itself in need of a tweet in support of that approach, please help yourself to either of the above. But if our elected officials are going to rely on actors and comedians to advance their political agendas, let’s not limit them to 140 characters or a list of pre-approved talking points. Seriously, where’s the fun in that? In the name of authenticity, let’s encourage our celebrities to use their own words.
Hey – it seems to working for Trump…
The number one single today in 1959:
The number one British single today in 1967:
Today in 1971, selections from the Beatles’ White Album were played in the courtroom at the Sharon Tate murder trial to answer the question of whether any songs could have inspired Charles Manson and his “family” to commit murder.
Manson was sentenced to death, but his sentence was commuted to life imprisonment when the U.S. Supreme Court outlawed the death penalty.
The stock market had a rough week last week.
But I confidently predict the market will not lose anything today. That’s because the market is closed for Martin Luther King Day.
However, says Michael Pento:
The S&P 500 has begun 2016 with its worst performance ever. This has prompted Wall Street apologists to come out in full force and try to explain why the chaos in global currencies and equities will not be a repeat of 2008. Nor do they want investors to believe this environment is commensurate with the dot-com bubble bursting. They claim the current turmoil in China is not even comparable to the 1997 Asian debt crisis.
Indeed, the unscrupulous individuals that dominate financial institutions and governments seldom predict a down-tick on Wall Street, so don’t expect them to warn of the impending global recession and market mayhem.
But a recession has occurred in the U.S. about every five years, on average, since the end of WWII; and it has been seven years since the last one — we are overdue.
Most importantly, the average market drop during the peak to trough of the last 6 recessions has been 37 percent. That would take the S&P 500 down to 1,300; if this next recession were to be just of the average variety.
But this one will be worse.
A major contributor for this imminent recession is the fallout from a faltering Chinese economy. The megalomaniac communist government has increased debt 28 times since the year 2000. Taking that total north of 300 percent of GDP in a very short period of time for the primary purpose of building a massive unproductive fixed asset bubble that adds little to GDP.
Now that this debt bubble is unwinding, growth in China is going offline. The renminbi’s falling value, cascading Shanghai equity prices (down 40 percent since June 2014) and plummeting rail freight volumes (down 10.5 percent year over year), all clearly illustrate that China is not growing at the promulgated 7 percent, but rather isn’t growing at all. The problem is that China accounted for 34 percent of global growth, and the nation’s multiplier effect on emerging markets takes that number to over 50 percent.
Therefore, expect more stress on multinational corporate earnings as global growth continues to slow. But the debt debacle in China is not the primary catalyst for the next recession in the United States. It is the fact that equity prices and real estate values can no longer be supported by incomes and GDP. And now that the Federal Reserve‘s quantitative easing and zero interest-rate policy have ended, these asset prices are succumbing to the gravitational forces of deflation. The median home price to income ratio is currently 4.1; whereas the average ratio is just 2.6.
Therefore, despite record low mortgage rates, first-time homebuyers can no longer afford to make the down payment. And without first-time home buyers, existing home owners can’t move up.
Likewise, the total value of stocks has now become dangerously detached from the anemic state of the underlying economy. The long-term average of the market cap-to-GDP ratio is around 75, but it is currently 110. The rebound in GDP coming out of the Great Recession was artificially engendered by the Fed’s wealth effect. Now, the re-engineered bubble in stocks and real estate is reversing and should cause a severe contraction in consumer spending.
Nevertheless, the solace offered by Wall Street is that another 2008-style deflation and depression is impossible because banks are now better capitalized. However, banks may find they are less capitalized than regulators now believe because much of their assets are in Treasury debt and consumer loans that should be significantly underwater after the next recession brings unprecedented fiscal strain to both the public and private sectors.
But most importantly, even if one were to concede financial institutions are less leveraged; the startling truth is that businesses, the federal government and the Federal Reserve have taken on a humongous amount of additional debt since 2007. Even household debt has increased back to its 2007 record of $14.1 trillion. Specifically, business debt during that time frame has grown from $10.1 trillion, to $12.6 trillion; the total national debt boomed from $9.2 trillion, to $18.9 trillion; and the Fed’s balance sheet has exploded from $880 billion to $4.5 trillion.
Banks may be better off today than they were leading up to the Great Recession but the government and Fed’s balance sheets have become insolvent in the wake of their inane effort to borrow and print the economy back to health. As a result, the federal government’s debt has now soared to nearly 600 percent of total revenue. And the Fed has spent the last eight years leveraging up its balance sheet 77-to-1 in its goal to peg short-term interest rates at zero percent.
Therefore, this inevitable, and by all accounts brutal upcoming recession, will coincide with two unprecedented and extremely dangerous conditions that should make the next downturn worse than 2008.
First, the Fed will not be able to lower interest rates and provide any debt-service relief for the economy. In the wake of the Great Recession, former Fed Chair Ben Bernanke took the overnight interbank lending rate down to zero percent from 5.25 percent and printed $3.7 trillion. The Fed bought longer-term debt in order to push mortgages and nearly every other form of debt to record lows.
The best the Fed can do now is to take away its 0.25 percent rate hike made in December.
Second, the federal government increased the amount of publicly-traded debt by $8.5 trillion (an increase of 170 percent), and ran $1.5 trillion deficits to try to boost consumption through transfer payments. Another such ramp up in deficits and debt, which are a normal function of recessions after revenue collapses, would cause an interest-rate spike that would turn this next recession into a devastating depression.
It is my belief that, in order to avoid the surging cost of debt-service payments on both the public and private-sector level, the Fed will feel compelled to launch a massive and unlimited round of bond purchases. However, not only are interest rates already at historic lows, but faith in the ability of central banks to provide sustainable GDP growth will have already been destroyed, given their failed eight-year experiment in QE.
Therefore, the ability of government to save the markets and the economy this time around will be extremely difficult, if not impossible. Look for chaos in currency, bond and equity markets on an international scale throughout 2016. Indeed, it already has begun.
This does not mean stockholders (that is, half of American households) should run out and sell their stocks for something they think is safer. Every financial planner who knows what he or she is doing preaches that it’s time in the market, not timing the market, that builds wealth. The only real reason for the non-rich to be investors is for long-term wealth-building.
I have maintained here that the stock market has been inflated anyway because some people are in the market because there isn’t any other good place for their money, given low interest rates and fundamental weakness of the economy. When you have unsustainably low labor participation rates, your economy isn’t really very sustainable.
This should expose, but probably won’t, the fundamentally bad economic policy of the Obama administration. Increasing taxes by 14 percent since 2013 is guaranteed to make a weak economy weaker. ObamaCare is a proven job-killer. So is the upward-spiralling level of regulation Obama has foisted on the productive class. And we’ve enjoyed, if that’s what you want to call it, both for the past seven years. The Recovery In Name Only is as illusory as the “recovery” between the beginning of the Great Depression and the end of World War II.
But don’t believe me, ask the Wall Street Journal:
The economic expansion—already the worst on record since World War II—is weaker than previously thought, according to newly revised data.
From 2012 through 2014, the economy grew at an all-too-familiar rate of 2% annually, according to three years of revised figures the Commerce Department released Thursday. That’s a 0.3 percentage point downgrade from prior estimates.
The revisions were released concurrently with the government’s first estimate of second-quarter output.
Since the recession ended in June 2009, the economy has advanced at a 2.2% annual pace through the end of last year. That’s more than a half-percentage point worse than the next-weakest expansion of the past 70 years, the one from 2001 through 2007. While there have been highs and lows in individual quarters, overall the economy has failed to break out of its roughly 2% pattern for six years.
Grove City College Prof. Tracy Miller explains:
Economic growth is usually faster than normal following a recession as entrepreneurs find more productive ways to employ the resources that were idle during the recession. How rapidly the economy grows and recovers depends partly on whether market forces are allowed to allocate resources, including labor, to their most productive uses. Unfortunately, the Obama administration has pursued several policies that make it harder for market forces to work. These include: bailouts, expansion of entitlement programs, regulation of the economy, tax increases, and huge government deficits.
Bailouts have resulted in capital being stuck in businesses that are either inefficiently run or have failed to produce goods and services that consumers’ value highly. In the absence of bailouts, some firms would have gone bankrupt and the capital reallocated to successful firms that are producing what consumers demand in a cost-effective way.
Expansion of government entitlement programs, such as food stamps and unemployment compensation, has reduced the incentive to be employed. The average benefit per recipient of food stamps jumped by approximately 25 percent between 2007 and 2010 due to rule changes. It also became easier to qualify for food stamps. As Richard Vedder points out in a Wall Street Journaleditorial, the number of food stamp recipients rose by over 7 million between 2010 and 2012, a period of falling unemployment.
A number of changes associated with the American Reinvestment and Recovery Act (the economic stimulus package passed after Obama was elected) resulted in greater after-tax benefits to being unemployed. These include exempting part of unemployment insurance benefits from federal income taxes and subsidizing health insurance costs for laid off workers. Unemployment benefits also were extended for up to 99 weeks. In addition, the federal government developed mortgage modification formulas for banks to use, which resulted in a bigger reduction in interest payments for those with lower incomes.
The combined effect of a more generous food stamp program, more generous benefits for unemployed workers and mortgage modification formulas is to offset a considerable percentage of the reduction in income from being unemployed. This results in less incentive to work. If fewer people work, less is produced and real GDP grows more slowly.
And from that impotent recovery, we’re headed toward recession. Swell.
My favorite Martin Luther King quotes:
A genuine leader is not a searcher for consensus but a molder of consensus.
A man who won’t die for something is not fit to live.
A nation or civilization that continues to produce soft-minded men purchases its own spiritual death on the installment plan.
All labor that uplifts humanity has dignity and importance and should be undertaken with painstaking excellence.
Freedom is never voluntarily given by the oppressor; it must be demanded by the oppressed.
He who passively accepts evil is as much involved in it as he who helps to perpetrate it. He who accepts evil without protesting against it is really cooperating with it.
Human progress is neither automatic nor inevitable … Every step toward the goal of justice requires sacrifice, suffering, and struggle; the tireless exertions and passionate concern of dedicated individuals.
Human salvation lies in the hands of the creatively maladjusted.
I have a dream that my four little children will one day live in a nation where they will not be judged by the color of their skin, but by the content of their character. … I have a dream that one day every valley shall be exalted, every hill and mountain shall be made low, the rough places will be made straight and the glory of the Lord shall be revealed and all flesh shall see it together.
If we are to go forward, we must go back and rediscover those precious values — that all reality hinges on moral foundations and that all reality has spiritual control.
Never forget that everything Hitler did in Germany was legal.
Our lives begin to end the day we become silent about things that matter.
Rarely do we find men who willingly engage in hard, solid thinking. There is an almost universal quest for easy answers and half-baked solutions. Nothing pains some people more than having to think.
Science investigates; religion interprets. Science gives man knowledge which is power; religion gives man wisdom which is control.
The function of education is to teach one to think intensively and to think critically. Intelligence plus character — that is the goal of true education.
The quality, not the longevity, of one’s life is what is important.
The ultimate measure of a man is not where he stands in moments of comfort and convenience, but where he stands at times of challenge and controversy.
Whatever your life’s work is, do it well. A man should do his job so well that the living, the dead, and the unborn could do it no better.
The number one single today in 1960 was written by a one-hit wonder and sung by a different one-hit wonder:
The number 45 45 today in 1964 was this group’s first, but not last:
Today in 1974, members of Free, Mott the Hoople and King Crimson formed Bad Company:
Steve Prestegard.com: The Presteblog 