Summer began on such a hopeful note. Vice President Biden was trotted out of seclusion to announce in January, "You're going to see, come the spring, net increase in jobs every month." Certain he'd not mislead us, we waited, full of optimism, only to see our hopes dashed on the audacity of dopes.

"To this day, economists don't fully understand why firms cut production as much as they did or why they cut labor so much more than they normally would." Her defense was that "almost all analysts were surprised by the violent reaction."

That miscalculation, in turn, led to her miscalculation that the stimulus package would be enough to keep the unemployment rate from exceeding 8 percent. Without the policy, she had predicted, unemployment would soar to 9.5 percent. The plan passed, and unemployment went to 10 percent.

No wonder most Americans think the effort failed. But Romer argued, a bit too defensively, against the majority perception. "As the Council of Economic Advisers has documented in a series of reports to Congress, there is widespread agreement that the act is broadly on track," she declared. Further, she argued, "I will never regret trying to put analysis and quantitative estimates behind our policy recommendations."

But the problem is not that Romer did a quantitative analysis; the problem is that the quantitative analysis was wrong. Inevitably, this meant that, as she acknowledged, "the turnaround has been insufficient."

Indeed, in its application to the Securities and Exchange Commission--which, guess what, will come through just in time to make an IPO possible before the November elections!--GM admits that its "disclosure controls and procedures and internal control over financial reporting are currently not effective." And this "could materially affect our financial condition and ability to carry out our business plan." Companies include all kinds of outlandish mea-culpas in their IPO applications to cover their derrières in the event of investor lawsuits. However, this one goes to the heart of the information that investors need to determine whether GM is a good investment, especially since it is going public after only two good quarters as opposed to the usual four. If GM can't guarantee its own numbers, how exactly are investors supposed to evaluate its worth?[/quote]

The event in some ways could be seen as a metaphor for the administration's flailing on the economy. Originally no remarks were scheduled, then on Sunday evening, the White House announced the president would make remarks in the Oval Office after his economic daily briefing.

Then on Monday that was upgraded to remarks by the president at 12:30 p.m. ET in the Rose Garden after his briefing, signifying a more formal event.

Then those remarks were pushed to 1 p.m.

Finally the president approached the lectern at 1:20 p.m.

Only five sentences into his remarks, the P.A. system fizzled.

"What we did know was that it took nearly a decade -- what we did -- how are we doing on sound, guys?" the president asked

"Is it still going to the press?" he asked, checking to make sure even if he couldn't be heard clearly in the Rose Garden, broadcast networks were getting clean sound, which they were.

"OK," the president said.

A plane flew nearby, drowning out his voice.

"What we did know was that it was going to take nearly a decade in order for -- can you guys still hear us?"

Reporters nodded.  

"OK," he continued, "let me try this one more time."

Obama's not into open-ended commitment. This is the same counterproductive claptrap that has been roundly criticized and that reveals him to be fundamentally disinterested in foreign policy. It is also why both friends and enemies doubt our staying power.

But most of all, the bulk of the speech had nothing to do with either Iraq or Afghanistan - it was a pep talk for his domestic agenda. This cements the sense that he simply wants out of messy foreign commitments. He also repeated a number of domestic policy canards. This was among the worst, blaming our debt on wars rather than on domestic fiscal gluttony: "We have spent over a trillion dollars at war, often financed by borrowing from overseas. This, in turn, has short-changed investments in our own people, and contributed to record deficits. For too long, we have put off tough decisions on everything from our manufacturing base to our energy policy to education reform."

He is arguing for more spending.

The reasons for weak job growth? The WSJ cites "market volatility, regulatory uncertainty and weak demand has curtailed economic growth" and "business concerns on regulations, taxes and future health-care costs, plus job mismatch," and lack of demand.

Disastrous economic policy is almost certainly the reason. And number one on my list of disasters is the new health reform law.

Did you know that the Patient Protection and Affordable Care Act (PPACA) uses the term "the Secretary shall" 1,075 times? That means enormous discretionary power to make decisions about the fate of a sector that is more than one-sixth the size of the entire economy has been vested with one government department. And after Kathleen Sebelius makes all of those decisions, the election in 2012 could easily produce a different Secretary from a different political party which could have 1,075 opinions very different from those of Secretary Sebelius.

You've got to pick a pocket or two 

Even before the passage of PPACA, personal health spending was close to one-fifth of family income. Under the new law, the cost of the mandatory health insurance coverage for a family will equal about 50% of the wage of a $30,000 a year worker. And after that, decisions by the Secretary of Health and Human Services could easily raise or lower labor costs by 5% to 10%. Will your health plan be "grandfathered"? How expansive will the mandated benefits be? Will the fine for not providing insurance stay at legislated levels? Or will it become much higher? No one knows the answers to these questions.

What matters most is not the size of the mandates, but the uncertainty surrounding them.

The New York Times has an editorial this morning supporting a provision in the Dodd-Frank financial "reform" legislation that requires companies to report a ratio of their CEO's pay to that of a typical employee.

"Without company-specific data, however, it is impossible to measure and judge the effect of pay structures on companies and the broader economy," the Times editorial says. "How does the pay gap between the boss and the workers figure into performance? Are companies efficiently providing goods and services or are they being run for the enrichment of the few? Disclosure of the gap could help provide answers."

There's one company, of course, for which those responsible for the Times editorial already have "company-specific data" - that is the New York Times Company itself, where Arthur Sulzberger Jr.'s overall compensation as chairman of the New York Times Company more than doubled to $6 million in 2009, in a year when many Times reporters and editors, who make about $100,000 a year, were subjected to a 5% pay cut, and reporters at the Globe, who make less than those at the Times, took a 5.9% pay cut.

If the Times editorialists are really curious about how the pay gap figures into performance and about whether companies are "efficiently providing goods and services" or whether they are "being run for the enrichment of the few" - well, no need to wait for the implementation of Dodd-Frank to get that company-specific data. Just take a stroll around the office.

The current political atmosphere reminds me of the scene in Doctor Zhivago when the crusty old Czarist General leads his young soldiers through a crowd of army deserters near the war front during the First World War. 

The deserters beseech the soldiers to come over to their side, which does happen, as the soldiers pull the General off his horse and beat him to death.

Yes, I see the irony of using a movie scene about the Russian Revolution in the current context, but I think we are witnessing something similar in the upcoming elections, at least if recent polling is accurate. 

Core Democratic groups either are switching sides or staying out of the battle, as attempts to portray the Tea Party movement as racist fall flat.  The Democrats are at risk of being left with all Generals, and no troops.

Once the false charges of racism are cast aside, these core groups will realize that the modern Democratic Party has nothing to offer other than crushing deficits and national debt, high unemployment, and a ravenous desire to control individual lives. 

We are not there yet, but I sense we are approaching that tipping point.

I heard Obama's going to announce a "Restoration to Citizenship through Work" program, where he'll reduce unemployment among ex-cons by hiring them to enter medical information into the new federal databases.

Also, a "Preserve Communities through Service" initiative that's supposed to encourage beautification of low-income areas via a combination of tax credits and other incentives. Basically, if you make less than $25k a year, the government will pay you to cut your own lawn, and if you make more than $75k, they'll fine you unless you drive into a slum and cut somebody else's lawn for them.

The OATC (Organizing for America Training Corps) is going to show up on college campuses next month. Not just in the Ivies, either - A&M is supposedly going to have like 5,000 cadets, mostly "re-entry" students from Austin. Unfortunately, that means their existing ROTC program is going to be relocated to San Angelo, but I guess the administration figures anybody going into the Army right now doesn't mind being suddenly moved hundreds of miles into a desert.

OATC hopes to get college student voting numbers to 100% of enrollment - in their hometowns and at school, if there's still time to get absentee ballots. [/quote]

Posted by: bgates | September 02, 2010 at 01:25 PM

President Obama will introduce the Justice in Salaries Act (JIS Act), which will authorize the Department of Labor to give a ranking of social importance to all jobs. Also incorporated into the ranking will be a factor representing whether success on a particular career path requires real talent, just plain luck, or exploitation of those who are less successful through no fault of their own.

The ranking will then be used to determine the legal salary range for each segment.

Authors, Public Servants, and Political consultants are expected to be high on the JIS scale.

Posted by: MayBee | September 02, 2010 at 01:51 PM