Category Archives: Recession

It's hard to imagine an economist being provocative, but Paul Krugman, a Nobel Prize winner, has managed to do so.

In his June 28 New York Times op-ed, Krugman argued that since governments around the world aren't willing to double-down on Keynesian policies meant to stimulate the global economy, the United States and the rest of the world are facing a third depression. But on CNBC's June 28 "The Kudlow Report," host Larry Kudlow asked if Krugman's premise were true, how come none of the measures being applied, which Krugman advocates more of, have failed to have any effect on the current economy.

"Steve Forbes, I want to focus this, coming out of G-20," Kudlow said. "Paul Krugman's remarkable op-ed today in The New York Times - he says, we are already in the early stages of a depression. He calls it the third depression in U.S. history. He says that it's primarily a failure of policy. But, Steve, the so-called spending cuts or tax increases or deficit reduction hasn't happened yet. In the last two years, we've had gargantuan spending and ultra-easy money which is what Professor Krugman has been advocating the whole time. And he still thinks we're in a depression. So I need to ask you, maybe his policies are what threaten the depression."

Forbes magazine CEO Steve Forbes argued the pro-growth approach was the proper means - a stronger dollar and low tax rates. 

"Well, it's like the old physicians who continue to bleed the patient and wonder why the patient isn't getting better and then bleeds the patient even more," Forbes explained. "What we should be doing, yes, we should be cutting back spending because it takes money from productive citizens. But as you know, Larry, two other things have to be done, reducing tax rates or at least not increasing tax rates and stabilizing the dollar. So people can trust it again. Sound money, low tax rates, that's the cure."

However, Dean Baker, a liberal economist and the co-director of the Center for Economic and Policy Research in Washington, D.C. argued the U.S. dollar was strong enough, because as investors flee from other currencies, they are seeking safety in the U.S. dollar and treasuries. But against gold, as Forbes pointed out, the U.S. dollar has taken a dive.

"Well, Steve must have not been following things very closely because people have a lot of faith in the dollar," Baker said. "That's why it's been rising so much."

"Not against gold, which is the best barometer of the dollar," Forbes fired back.

Nonetheless, Baker continued to make Krugman's case - that this was analogous to a forest fire with only a few buckets of water to put it out, which aren't working meaning there was a need for more so-called medicine from the government.

"That's fine, every other currency in the world," Baker said. "Interest rates are at near-record lows, so that's not keeping people from investing. Low tax rates - well, tax rates were higher back in the 90s when the economy was growing at a record pace. So none of that really fits. Krugman's on the mark here. And the point here is that it's sort of like if we had a big forest fire and we got a few buckets and you go ‘hey that didn't put it out.' Well, water's not going to work. I mean we lost over a trillion dollars a year in annual demand. We tried to replace it with the stimulus that it came to from the federal sector about $300 billion a year, you subtract out the cuts at the state and local level, that's $150 billion a year. Where I come from $150 billion isn't going to make a loss of a trillion. That's simple arithmetic."

According to liberal economic Paul Krugman, a "third depression" will occur if nations tighten their belts and attempt to balance their budgets.

Forget about the riots in Greece over a social welfare system the government couldn't maintain or a $1.4 trillion annual U.S. budget deficit. Krugman claimed that the threat of deflation supersedes both of those results of runaway government spending - that is higher taxes in the long run and a debt to future generations.

In his June 28 column for The New York Times, Krugman wrote: "We are now, I fear, in the early stages of a third depression. It will probably look more like the Long Depression than the much more severe Great Depression. But the cost - to the world economy and, above all, to the millions of lives blighted by the absence of jobs - will nonetheless be immense."

At the G-20 meeting in Toronto last week, European leaders encouraged fiscal discipline from the United States, while President Barack Obama pushed an opposite approach. That disappointed the Times columnist.

"And this third depression will be primarily a failure of policy," Krugman continued. "Around the world - most recently at last weekend's deeply discouraging G-20 meeting - governments are obsessing about inflation when the real threat is deflation, preaching the need for belt-tightening when the real problem is inadequate spending."

Krugman has rarely been concerned by government debt, unless it was for a war or could be used to bash former President George W. Bush. Maintaining his spendthrift perspective, he insisted the concerns raised over government spending have nothing to do with a genuine concern for the financial insolvency of the government or the threat of runaway inflation, but were part of an irrational "orthodoxy."

"So I don't think this is really about Greece, or indeed about any realistic appreciation of the tradeoffs between deficits and jobs," Krugman wrote. "It is, instead, the victory of an orthodoxy that has little to do with rational analysis, whose main tenet is that imposing suffering on other people is how you show leadership in tough times. And who will pay the price for this triumph of orthodoxy? The answer is, tens of millions of unemployed workers, many of whom will go jobless for years, and some of whom will never work again."

For 2010, the federal deficit, as a percentage of U.S. gross domestic product is a whopping 10.64 percent, the highest since 1945 in the midst of World War II - an imbalance that worries many people, just not Krugman.

Over the past couple years, Krugman has been an outspoken advocate of government stimulus spending, criticized a $775 billion stimulus plan for being too small, called for a second stimulus, and even claimed in 2008 that "we probably have $10 trillion of running room" when asked how much the government could spend to turn the economy around.

George Will on Sunday gave a much-needed economics lesson to New York Times Washington correspondent David Sanger that greatly demonstrated the difference between how conservatives and liberals view unemployment benefits.

As the Roundtable segment of ABC's "This Week" shifted to the G20 summit in Toronto, Sanger said, "Just the day before [Barack Obama] left, Congress could not come to an agreement on a very small extension of unemployment benefits, you know, the most basic stimulus effort that the President tried to push."

Host Jake Tapper asked, "George, why can't they pass this extension?"

With the ball sitting up nicely on the tee, Will smacked it out of the park (video follows with transcript and commentary, relevant section at 4:10):  

DAVID SANGER, NEW YORK TIMES: The President's also in the position in Canada of saying, "Don't do as I do, do as I say." I mean, just the day before he left, Congress could not come to an agreement on a very small extension of unemployment benefits, you know, the most basic stimulus effort that the President tried to push.

JAKE TAPPER, HOST: 1.2 Million Americans are going to lose their unemployment extensions, or unemployment benefits this week.

SANGER: That's right. So there's a fundamental stimulus action and the President had to go up and tell the Europeans they were not doing enough for stimulus.

TAPPER: George, why can't they pass this extension? I don't understand. The Republicans say, "Let spending cuts should pay for this." The Democrats say, "No, it's emergency spending." It seems that this is something where there could be a compromise.

GEORGE WILL: Well, partly because they believe that when you subsidize something, you get more of it, and we're subsidizing unemployment. That is the long-term unemployment, those unemployed more than six months is at an all-time high. And they want, they do not think that it is stimulative because what stimulates is the consumer and the saver's sense of permanent income. And everyone knows that unemployment benefits are not permanent income.

Indeed.

Unfortunately, much of America's media have the same misconception that extending unemployment benefits helps the economy. 

Of course, nothing could be further from the truth for those receiving such benefits aren't going to increase their spending because they don't know how long they'll be unemployed. Beyond this, they feel little need to get back into the workforce until their benefits expire.

This means that despite what folks like Sanger believe and write about, extending unemployment benefits has no economically stimulative impact. 

As such, calling this extension an economic stimulus is like calling an ox a bull: he's thankful for the compliment, but would much rather have back what is rightfully his.

Nice job, George. 

Joe Biden traveled to Wisconsin yesterday to campaign with far left Progressive Russ Feingold (D-WI). Smokin Joe ordered a custard at a popular custard stand in Glendale during one of their stops. When Biden asked Kopp’s Frozen Custard stand owner how much he owed him, the owner responded,

“Nothing, just lower our taxes.”

Fat chance.

An embarrassed Joe Biden ignored him and walked away.

WISN 12 News reported:

A spokesman for the GOP responded to the VP’s visit:

“Vice President Biden probably decided not to take questions today because he didn’t want to fess up as to why Wisconsin has lost over 73,000 jobs since the stimulus was enacted.”

Ouch.

On Thursday, a new unemployment bill died in Congress as Senator Ben Nelson (D-Neb.) joined Republicans on the grounds that government spending can't go on forever.

Instead of reporting both sides, the media couldn't seem to hide their anger.

The bill was called a "jobless aid" package that "governors were counting on" to help "the poor" across the nation. Almost all news reports began from the Democrat perspective and waited several paragraphs before weakly defending Republicans.

Worse yet, a consensus with far more damaging impact began to grow: the loss will cause the nation's economy to fall into a double dip recession, and it will be entirely the Republicans' fault.

Never mind last year's stimulus bill worth $700 billion, or the bank bailout of 2008, both of which have failed to live up to promises of recovery. No, our economy is suffering because fiscal conservatives won't spend even more.

The Seattle Times was quick on the draw Thursday night with a clearly disappointed report headlined "Republicans Continue Blockade of Federal Aid Bill." What followed was an obviously biased effort to paint Republicans in a bad light:

Senate Republicans on Thursday once again blocked legislation to reinstate long-term unemployment benefits for people who have exhausted their aid.

With the Senate apparently paralyzed by partisan gridlock, the fate of the aid, as well as tax breaks for businesses and $16 billion in aid for cash-strapped states, remains unclear. Dozens of states, including Washington, are hoping for federal aid to help balance their budgets.

Republican lawmakers - joined by Democrat Ben Nelson of Nebraska - maintained a unified front to sustain a filibuster of the $110 billion bill. The vote was 57-41, three short of the 60 needed to cut off debate and bring the bill to a final vote.

Democrats said they would give no further ground and put the onus on Republicans to make concessions.

Those who have "exhausted their aid" are the long-term unemployed who received financial assistance for up to 99 weeks already. Republicans seem to have this crazy notion that receiving government assistance that long might be long enough, and perhaps it's time to start asking if Keynesian economics is working.

But according to the Seattle Times, that kind of talk is just "partisan gridlock." The article quoted one Republican against three Democrats and never got any deeper than vague concerns about the national debt.

Toward the end, the Times went to White House Press Secretary Robert Gibbs to imply that Republicans were sabotaging the economy:

In a statement, the White House vowed to keep pushing for the bill. "The president has been clear: Americans should not fall victim to Republican obstruction at a time of great economic challenge for our nation's families," spokesman Robert Gibbs said.

By Friday morning, this became the battle cry for reporters around the country. Reuters published an article that advanced the point in plainer terms:

The bill, which also would have provided more aid to cash-strapped states for the Medicaid health program for the poor, fell a few votes short of the 60 needed to advance in the 100-member Senate. One Democrat, Ben Nelson, joined 40 Republicans to block the measure.

Democrats argued that the bill would have helped shore up the fragile U.S. economic recovery, a priority for President Barack Obama's administration.

Yes, saving the economy has been one of President Obama's priorities for some time now, mostly because nothing he does seems to save it. But Reuters didn't have time to mention an inconvenient thing like that. Readers were expected to believe the premise that one more spending bill would have shored up the economy if not for those meddling Republicans.

A few hours later, the Associated Press got involved with an even sharper accusation aimed directly at Republicans:

The rejected bill would have provided $16 billion in new aid to states, preserving the jobs of thousands of state and local government workers and providing what White House officials called an insurance policy against a double-dip recession. It also included dozens of tax breaks sought by business lobbyists and tax increases on domestically produced oil and on investment fund managers.

"This is a bill that would remedy serious challenges that American families face as a result of this Great Recession," said Max Baucus, D-Mont., the chief author of the bill. "This is a bill that works to build a stronger economy. This is a bill to put Americans back to work."

How strange that quote didn't show up in the early dispatches Thursday night. It's almost as if the media spent Friday collectively drifting toward a good narrative.

By 4:00 Friday, the economy-sabotage angle was official. The Washington Post's Greg Sargent used the Plum Line blog for the announcement:

A number of bloggers today have been up in arms about the apparent failure of the jobs bill in the Senate, now that it looks like no Republicans will help Dems break the GOP filibuster.

This could have terrible consequences, and Senator Debbie Stabenow, in particular, is furious. Today she argued that Republicans want the economy to tank in order to help themselves in the midterms

Thus in less than 24 hours, it went from Republicans worrying about the national debt to Republicans purposely tanking the economy just to embarrass Democrats.

Not to be left out, Bloomberg's Shobhana Chandra also cut right to the bone in an article on Friday:

The Senate's failure to pass legislation extending unemployment benefits will slow the pace of the U.S. recovery, said economist David Resler.

The bill's demise will trim economic growth by 0.2 percentage point this quarter and by 0.4 point in the period from July through September, estimated Resler, chief economist at Nomura Securities International Inc. in New York.

So you see, economic growth apparently comes only by way of government spending, and this time there's a real expert to say so!

But all is not lost. While working hard to opine on the terrible news, Chandra inadvertently let something slip:

Resler estimated that the unemployment rate, 9.7 percent in May, may decline by as much as one percentage point as some workers drop out of the labor force and others accept jobs they might have rejected earlier.

Wait...when people finally realize they can't live on government assistance forever, they might buckle down and accept a tough job? This nugget appeared exactly 11 paragraphs down from the headline and was quickly glossed over.

So maybe, just maybe, Republicans are trying to enact market-based principles by urging people to go back to work. Maybe it has nothing to do with sabotaging the economy after all.

Don't count on that particular narrative to grow any legs, though. An hour after the Washington Post hit piece, the Associated Press was back for more:

Labor Secretary Hilda Solis said Friday that Senate Republicans could be prolonging the recession by opposing a spending bill that would have extended unemployment benefits.

Solis, talking to a group of Latino government officials in Denver, said Republicans were wrong to oppose to a broader jobs bill that would have extended jobless benefits for about 200,000 people a week. She warned of dire consequences if benefits are shut off.

"This will be devastating and could take us back to a deeper recession," Solis said

Oh yeah, urging healthy workers to accept less glamorous jobs is really the "devastating" consequence of a diabolical Republican strategy.

Good to know we have professional, independent, unbiased journalists hard on the trail of Republican masterminds. 

*****Updated by Noel Sheppard: Did media get this talking point from Senate Majority Leader Harry Reid (D-Nev.) (h/t Twitter's @ndgc12dx)?

The morning after the Senate failed to advance a bill that responded to the recession, Sen. Harry Reid laid into Republicans who blocked it en masse.

Clearly sore after falling three votes short Thursday night of the 60 needed to overcome a Republican filibuster, the Senate majority leader from Nevada charged in a Senate speech that GOP senators "are betting on our country to fail."

Rather than help Americans, he said, Republicans are more interested in bringing down President Barack Obama.

"The Republicans in the Senate have made the decision to do everything they can to turn the country upside down, to do everything they can to stop economic recovery because they think it may help some of their people running for the Senate around the country.

"They figure as bad as they can make the economy, the better off they will be," Reid said. "That is a pretty difficult view for people who are United States senators."

"As we learned from the health care debate, (Republicans) want everything that Obama wants to be his Waterloo."

It's union thuggery, but at a higher echelon.

Imagine you're representing the AFL-CIO, going on Fox News and trying to make a case that the $787-billion stimulus last year wasn't nearly enough and that more is needed, despite the prevailing argument being that Keynesian economics doesn't work based on this example.

Well, Ron Blackwell - the chief economist for the AFL-CIO faced that on the June 25 broadcast of Fox News' "Your World with Neil Cavuto." Cavuto, asking some honest questions, pressed Blackwell, who was attempting to make the case for more stimulus, as to why the idea of more government spending to help the ailing economy was a legitimate one.

"You're not creating the jobs, with all this money you're wanting us to spend - then why should we keep digging?" Cavuto asked. "What's wrong with saying let's put the shovel down - that's not working?"

Cavuto continued to press Blackwell on his premise that it would take more of the Keynesian medicine - an idea Blackwell wasn't willing to concede was an incorrect one.

"I'm answering you right now - these programs did create jobs but not net creation," Blackwell said. "We lost more jobs because of the recession than were created by these programs. Net, gross - is that a complex idea for you?"

"Ron, you're the chief economist there," Cavuto replied. "Where did you get your degree, a baking school? Where are you cooking up these numbers? The fact is we spent a trillion dollars..."

That comment drew an upset response from Blackwell.

"Oh, that's an insult," Blackwell said. "Forget about it. You're a joker - you're an asshole."

The two followed up with another series of exchanges, but Blackwell was unwilling to concede the failure of last year's stimulus to live up to its billing.

"[A]nd we've not seen results from that money," Cavuto said. "And now you're saying it could have been worse had we not."

"I just told you that we have seen results," Blackwell said.

"So your answer to just answering a simple question is to curse at me, or to frame it differently, or to obfuscate the facts, or to ignore the facts with a trillion dollars spent and we haven't seen any net new jobs and you're answer is, ‘Well, we have to spend more?'" Cavuto said.

"We lost more jobs because of the recession than we created by these programs," Blackwell said. "Gross and net - it's not a complex idea. You should have learned that in high school, Neil."

From Reuters:

In its final estimate on the first quarter on Friday, the Commerce Department said gross domestic product expanded at a 2.7 percent annual rate instead of the 3 percent pace it reported last month.

Although the growth pace was below market expectations for a 3 percent rate, it still marked three straight quarters of expansion as the economy digs out of its most brutal downturn since the 1930s.

However, recent data have suggested the recovery lost some momentum in the second quarter, with persistently high unemployment restraining consumer spending, and home building and purchases faltering.

U.S. stock index futures cut gains on the report, while government debt prices rose. The U.S. dollar extended declines against the yen.

“You are getting growth in fits and starts, rather than an outright contraction. We are not generating real income growth that we like. It’s a recovery that has a real weight on its back,” said Paul Ballew, chief economist at Nationwide in Columbus, Ohio.

The Federal Reserve this week struck a cautious note on the economy and said the recovery was “proceeding.” The economy is, however, not expected to fall back into recession.

Read the whole thing here. As Glenn Reynolds has often noted, the word “unexpectedly” seems to accompany just about every economic report. Unexpectedly is the ‘new black’!

Tough times don't last; tough people do.

That's the theme of author John S. Cohoat's new book "No Thank You, Mr. President," which tells the story of 10 private companies in Elkhart County, Ind., that made their own way to economic recovery without government handouts.

"My hope is that these stories provide some inspiration for you or make you remember why our capitalist economic policies and truly American way of life is the answer," Cohoat wrote in his first chapter, titled ‘Why This Book? Why Now?'

Cohoat characterized Elkhart County, in the northern part of the state near South Bend, as a hard-nosed area able to take care of itself. His portrayal stands in contract to the national media's portrayal of the county as the "poster child for all that is bad with our economy."

In 2009, President Obama visited Elkhart County to promote his "stimulus" legislation. All the networks used his visit to supplement their infomercial for the $787 spending plan. NBC's Chuck Todd went so far as to claim that Obama's and Elkhart's fates were intertwined when Obama returned to the county in August 2009.

"Of all the hard-hit places, Elkhart, Indiana, is the barometer by which President Obama believes he will be and should be judged on his ability to turn around the economy," Todd said.

MSNBC.com kept a running blog called "The Elkhart Project" that ran from March 2009 until March 2010 chronicling the "tales of struggle and recovery from the epicenter of America's economic meltdown." The blog presents Elkhart as a victim in need of a government savior.

Cohoat's book, however, focused on the confidence and entrepreneurial spirit of the residents and workers of Elkhart County. He directly refuted the "victim" label in the chapter titled "Victims Need Not Apply," which profiled Larry Shank of AE Techron Inc.

"Larry's attitude is that government officials often see their role as finding a way to fix problems for its people," Cohoat wrote, "but Larry says Elkhart County's message is, ‘just get out of our way, and we'll find a solution.'"

Compare that with Mike Stuckey's February 2010 story, ‘A city's mixed feelings about Obama's impact.' The "Elkhart Project" post didn't cite opposition to the stimulus until 22 paragraphs into the story and wrote it off as conservative, Glenn Beck-inspired resistance. 

"'I honestly think if the government would just get out of the way and let us go back to work, it would be better,' said Graber, a founding board member of the Michiana 9-12 Project, a group inspired by conservative TV and radio host Glenn Beck that stresses family and religious values over government solutions," Stuckey wrote.

Rather than underreporting stimulus costs or championing further intervention, as many in the media have done, Cohoat's book provides a picture of America's ability to recover by working hard and letting the free market work its way out of the recession. Additionally, Cohoat broke the media trick of exclusively interviewing stimulus supporters and discovered business owners who not only oppose the stimulus but are actually succeeding without its help. 

On Friday's Situation Room, CNN's Jack Cafferty tossed cold water on the Obama administration's "recovery summer" claims, stating that the "current recovery has been one of the worst for job creation ever." Cafferty also criticized the dangerous growth in the national debt, underlining that there "appears to be a rather serious disconnect," as the President requested billions in additional spending.

The CNN commentator began his 5 pm Eastern hour commentary with a contrast between Obama's "massive P.R. campaign" touting the apparent effectiveness of the $860 billion "economic stimulus bill" and the continuing high unemployment figure: "President Obama and Vice President Biden have kicked off a massive P.R. campaign, celebrating what they're calling 'recovery summer'....But the celebration may be premature. Just yesterday,  the Labor Department reported new claims for jobless benefits jumped by 12,000 last week- much sharper increase than was expected."

Cafferty touted a recent editorial in the Washington Times which "suggests the administration's 'make-work' jobs program has failed, and that those infrastructure jobs, which are being funded by the taxpayers, will disappear when the stimulus money runs out- soon." He bluntly continued, "Fact is the current recovery has been one of the worst for job creation ever."

Near the end of the segment, the commentator highlighted Alan Greenspan's "dire warning that the U.S. may soon reach its borrowing limit if we don't make some drastic changes and reduce our $13 trillion national debt. But President Obama wants billions more for stimulus spending. Somewhere, there appears to be a rather serious disconnect."

Earlier in June, Cafferty ripped the Democratic-controlled Congress for their inaction to pass a budget, and lamented the "skyrocketing federal deficits and a national debt that just passed $13 trillion."

The full transcript of Jack Cafferty's commentary, which aired 11 minutes into the 5 pm Eastern hour of Friday's Situation Room:

CAFFERTY: Wolf, it turns out that recovery is in the eye of the beholder. President Obama and Vice President Biden have kicked off a massive P.R. campaign, celebrating what they're calling 'recovery summer.' They say the $860 billion economic stimulus bill is working. The White House says two and a half million jobs have been created, and that the number should reach three and a half million by the end of this year. They're highlighting new jobs at thousands of infrastructure projects across the country.

But the celebration may be premature. Just yesterday,  the Labor Department reported new claims for jobless benefits jumped by 12,000 last week- much sharper increase than was expected, and it shows that the pace of layoffs has not slowed appreciably. Plus, we still have a national unemployment hovering just below 10 percent. An editorial in the Washington Times, called 'Obama's Endless Summer of Spending,' suggests the administration's 'make-work' jobs program has failed, and that those infrastructure jobs, which are being funded by the taxpayers, will disappear when the stimulus money runs out- soon. Fact is the current recovery has been one of the worst for job creation ever.

Meanwhile, the picture in many of the 50 states is terrible and getting worse. State and local governments are cutting wherever they can, in order to meet their budgets, reducing or eliminating public services, underfunding state pension plans, and cutting 230,000 state and local government jobs in just the last couple of years.

Former Fed Chairman Alan Greenspan is out with a dire warning that the U.S. may soon reach its borrowing limit if we don't make some drastic changes and reduce our $13 trillion national debt. But President Obama wants billions more for stimulus spending. Somewhere, there appears to be a rather serious disconnect.

Here’s the question: does it feel like a 'recovery summer' to you? Go to CNN.com/CaffertyFile, post a comment on my blog.

On Friday's Situation Room, CNN's Jack Cafferty tossed cold water on the Obama administration's "recovery summer" claims, stating that the "current recovery has been one of the worst for job creation ever." Cafferty also criticized the dangerous growth in the national debt, underlining that there "appears to be a rather serious disconnect," as the President requested billions in additional spending.

The CNN commentator began his 5 pm Eastern hour commentary with a contrast between Obama's "massive P.R. campaign" touting the apparent effectiveness of the $860 billion "economic stimulus bill" and the continuing high unemployment figure: "President Obama and Vice President Biden have kicked off a massive P.R. campaign, celebrating what they're calling 'recovery summer'....But the celebration may be premature. Just yesterday,  the Labor Department reported new claims for jobless benefits jumped by 12,000 last week- much sharper increase than was expected."

Cafferty touted a recent editorial in the Washington Times which "suggests the administration's 'make-work' jobs program has failed, and that those infrastructure jobs, which are being funded by the taxpayers, will disappear when the stimulus money runs out- soon." He bluntly continued, "Fact is the current recovery has been one of the worst for job creation ever."

Near the end of the segment, the commentator highlighted Alan Greenspan's "dire warning that the U.S. may soon reach its borrowing limit if we don't make some drastic changes and reduce our $13 trillion national debt. But President Obama wants billions more for stimulus spending. Somewhere, there appears to be a rather serious disconnect."

Earlier in June, Cafferty ripped the Democratic-controlled Congress for their inaction to pass a budget, and lamented the "skyrocketing federal deficits and a national debt that just passed $13 trillion."

The full transcript of Jack Cafferty's commentary, which aired 11 minutes into the 5 pm Eastern hour of Friday's Situation Room:

CAFFERTY: Wolf, it turns out that recovery is in the eye of the beholder. President Obama and Vice President Biden have kicked off a massive P.R. campaign, celebrating what they're calling 'recovery summer.' They say the $860 billion economic stimulus bill is working. The White House says two and a half million jobs have been created, and that the number should reach three and a half million by the end of this year. They're highlighting new jobs at thousands of infrastructure projects across the country.

But the celebration may be premature. Just yesterday,  the Labor Department reported new claims for jobless benefits jumped by 12,000 last week- much sharper increase than was expected, and it shows that the pace of layoffs has not slowed appreciably. Plus, we still have a national unemployment hovering just below 10 percent. An editorial in the Washington Times, called 'Obama's Endless Summer of Spending,' suggests the administration's 'make-work' jobs program has failed, and that those infrastructure jobs, which are being funded by the taxpayers, will disappear when the stimulus money runs out- soon. Fact is the current recovery has been one of the worst for job creation ever.

Meanwhile, the picture in many of the 50 states is terrible and getting worse. State and local governments are cutting wherever they can, in order to meet their budgets, reducing or eliminating public services, underfunding state pension plans, and cutting 230,000 state and local government jobs in just the last couple of years.

Former Fed Chairman Alan Greenspan is out with a dire warning that the U.S. may soon reach its borrowing limit if we don't make some drastic changes and reduce our $13 trillion national debt. But President Obama wants billions more for stimulus spending. Somewhere, there appears to be a rather serious disconnect.

Here’s the question: does it feel like a 'recovery summer' to you? Go to CNN.com/CaffertyFile, post a comment on my blog.

I had this movie fantasy about Obama. He would be whining to his closest associates like David Axelrod or Valerie Jarrett and there would be an open microphone. The American people would finally hear him express his utter disdain for them. Then everything would change!

My fantasy scene comes from “A Face in the Crowd” a 1957 drama starring Andy Griffith. Our future loveable Sheriff Andy Taylor played an entertainer from Arkansas, Lonesome Rhodes, who was in reality a mean-spirited, drunk. He was rescued from a jail cell with his guitar and charmed small town radio. Then he rose to national fame on the new miracle of TV. His public persona was crafted by others as an everyman who understood their hopes and dreams. People tuned in and bought the products he advertised even if every once in a while he went off script and betrayed his manipulative power. At first the public just laughed and bought more.

It was the beginning of the age of television and a cautionary tale about the power of mass media. One character realizes it potential for political power and calls TV ‘the greatest instrument of persuasion in the history of the world” Another more concerned character comments” you have to be a saint to stand all the power that little box can give you”

“A Face in the Crowd” may seem to be all about entertainment if it weren’t for the fact Lonesome Rhodes is persuaded to support a Presidential candidate and have him on his TV show. Lonesome understands what it could mean to join the powers of the mass media and politics. He tells his girlfriend” “Marcia you just wait and see. I’m gonna be the power behind the President… and you’ll be the power behind me” Of course later on he dumps Marcia for a teenage baton- twirler but that is another part of the plot.

Obama is a creation of the media. They loved him for giving a great speech in front of those fake columns. It was a TV set!

But he had never run a business or a state. He had never made an executive decision and voted “Present” a lot in the Illinois legislature. Of course these were the cautions raised by the Right. The mainstream media dismissed them. They claimed he was smart. He would gather the best minds around him. Who cares if he had not been an executive. That is just what business types care about. And of course, there is no one around Obama with business experience so it was not important to them. Oh did I mention he hasn’t fixed the economy yet. But of course that is not his thing. But the environment is. That is why the Gulf spill disaster is so disheartening to the Democrats.

As President Obama’s poll numbers are sinking in the oily ooze of the Gulf oil spill I think it is ironic that it was a prominent Democrat James Carville who began criticizing him first about his lack of attention to the disaster. The environment was the Democrats’ issue. Didn’t Obama tell them that the earth would begin to heal when he was elected? Surely a Republican president would have screwed this up but not a Green Democratic president. He would know what to do. It must have galled Obama when the mainstream media began asking if this was Obama’s Katrina. Dare I say it, but his incompetence was showing.

In the movie Lonesome Rhodes, like Obama had a meteoric rise to the top. Those around him became successful because of him. But we know in Hollywood that fame can be fleeting just like political power. People like to compare the two, and opine on why we are drawn to each other. Some say Washington is like high school with power and Hollywood is like high school with money. That one is probably from an east coast perspective. I remember when “West Wing” was on TV a D.C. type commented that the real West Wing was much more crowded and the real people that worked there were not that thin.

Political figures and stars both depend on the love of the public for their success. When they lose our love, they lose their power. Bill Clinton understood this. But with Obama it is striking that the most prominent emotion Obama is showing lately is annoyance…with us! He is annoyed that he is being criticized. I also suspect he is annoyed that he has to deal with any problems. As a matter of fact I saw this emotion (if you can call it that) when the Christmas underwear bomber was caught. Then when the Times Square bomb was discovered he seemed annoyed again. This pesky terrorism thing was taking him away from concentrating on being the star he was meant to be.

He doesn’t get the ‘fame is fleeting’ thing. He somehow thinks it is owed to him. In Hollywood we would say he believes his own press releases.

In the movie, Lonesome Rhodes goes on a rant about what he really thinks about the public and his onetime girlfriend, who he dumped for the teenage baton twirler, opens the microphone and his words go out over the air. What does the star think of the American people… “This whole country is just like my flock of sheep! …They’re mine! I own ‘em! They think like I do. Only there’re more stupid than I am so I gotta think for ‘em”

As Lonesome rides the elevator down after the show he doesn’t know yet he’s toast. It may be that Obama is on the elevator and does not yet realize what has happened to him. It is hard to recover from the charge of incompetence. Carter never recovered from the Iranian Hostage Crisis and the constant reminder in the media of “Day 212” etc. Every newscast now numbers the days of the spill on the screen. He will try to recover. Presidents can come back.

Even when Lonesome Rhodes was told he was finished he wouldn’t believe it. He yelled “Listen I’m not through yet” But he was told what would happen. It reminds me what happens to political figures that rise too fast and then fall.

“You’ll be back in television. Only it won’t be quite the same as before….. Then a couple of new fellas will come along…..and pretty soon a lot of your fans will be flocking around them. And then one day, somebody’ll ask: ‘Whatever happened to whatshisname? You know the one who was so big. The number-one fella a couple of years ago. He was famous. How can we forget a name like that?’

Lonesome is alone in his penthouse listening to his mechanical canned laugh machine as he ponders his fate.

I keep thinking of Obama alone in his room replaying the tape of his speech with the fake columns behind him. That was the high point. Maybe he saved the columns and he could set them up with his teleprompter and give the speech again. Then he could play a tape of the applause and cheers and he can listen to that too.

Real Clear Politics currently has a video highlighting statements by Democratic Congressman James Clyburn Jr. of South Carolina. It teases the video with a question asked by Candy Crowley of CNN.

Once one sees the entire sequence, it's clear that Clyburn really answered Crowley's question before she even asked it.

Here's the full transcript of the vid, which begins after Indiana Republican Congressman Mike Pence had apparently made some points about how steps taken by the Obama administration to revive the economy to the point where it generates meaningful job growth aren't working. Clyburn's answer to when his party will stop blaming Bush is in bold:

Clyburn: Uh, Congressman Spence, uh, Pence keeps talkin' about, uh, the fact that, uh, we are, uh, failing in our approach. We all know exactly what this president inherited, and we will stop talkin' about that inheritance, uh, when uh Congressman uh Pence and others stop talkin' about takin' us back uh to those failed policies.

We're trying to correct some things that we had absolutely nothin' to do with, and the American people know that. And I would wish that all of us would get on board this in bipartisan approaches to tryin' and get our economy stabilized, tryin' to get our children educated, tryin' to get workin' men and women back to, uh, on their jobs, and look for the future, look to the future with --

Crowley: Congressman?

Clyburn: -- a little more, uh compassion and bipartisanship.

Crowley: Congressman, I think nobody disagrees with you on the goals. I think that one of the questions that's cropping up now is, when does the statute of limitations run out on blaming the Bush administration and when is it on you all as the governing -- really in the House and the Senate and the White House. When does the economy, uh, become your baby, so to speak?

Clyburn: The economy is our baby. But let's stop talkin' about cuttin' taxes, cuttin' taxes, cuttin' taxes. That simplistic approach to tryin' to get this economy movin' again, it's what got us in this, uh-uh, position in the first place. We just had an across the board cut on 95% of workin' men and women, they got an across the board tax cut. You all know that.

Pence attempted to get in a word or two edgewise during Clyburn's final two sentences and got nowhere, though Crowley got to him immediately after that. One can also hear Pence chuckling in the background as Crowley asks here "statute of limitations" question.

"Congressman Pence and others" clearly have no plans to "stop talkin' about takin' us back to those failed policies" -- policies that worked reasonably well from 2003 to 2007, by the way, despite the sand-in-the-wheels impact of the Sarbanes Oxley law. Therefore, the short version of Clyburn's answer to the question of when the Bush blame game will stop is, "When you guys shut up." The one-word version is really, "Never."

As to Clyburn's contention that "We're trying to correct some things that we had absolutely nothin' to do with," it's time to remind him and everyone else of the true origins of the housing and mortgage lending bubble. They have everything to do with government-sponsored, mortgage giants Fannie Mae and Freddie Mac, and nothing to do with George Bush, who tried -- perhaps not hard enough, but genuinely tried -- to stop the madness emanating from those two entities.

The full scope of what these Democrat crony-controlled perpetrated on the nation didn't become fully known until late last year. It wasn't "only" lax credit standards, which would have been bad enough. Beyond that, as I noted on December 31 (last item at link; a column with a more complete treatment of the topic is here), there was pervasively fraudulent loan packaging:

... it's hard to overstate the relevance of this paragraph from Peter J. Wallison in the Wall Street Journal, because it should end the debate over who is primarily responsible for the housing and mortgage-lending messes:

"There is more to this ugly situation. New research by Edward Pinto, a former chief credit officer for Fannie Mae and a housing expert, has found that from the time Fannie and Freddie began buying risky loans as early as 1993, they routinely misrepresented the mortgages they were acquiring, reporting them as prime when they had characteristics that made them clearly subprime or Alt-A."

The two Democrat-crony government-sponsored enterprises created an artificial market for subprime mortgages by bilking investors for 15 years. If they hadn't done this, subprimes would never have been able to expand to their mortally dangerous levels. Further, the victims of the misrepresentations logically would appear to include the rating agencies that some state attorneys general are going after as the supposed culprits.

Sorry, Mr. Clyburn, your party and its cronies had everything to do with it. The only reason much of the American public doesn't know this is because reporters like Candy Crowley haven't educated themselves about what Fan and Fred really did, and therefore won't challenge your full-of-baloney assertions. Or worse, they know and let it slide.

Cross-posted at BizzyBlog.com.

The establishment press is either getting tired of being beaten up over using the U-word ("unexpectedly," or sometimes "unexpected") to the point of excess when economic news disappoints, or has itself wearied of using the word.

Here's the Associated Press's Martin Crutsinger on today's retail sales report letdown, courtesy of the Commerce Department. The bolded sentence seen after the jump is Crutsinger's substitute for the U-Word:

Retail sales plunged in May by the largest amount in eight months as consumers slashed spending on everything from cars to clothing. The big drop raises new worries about the durability of the economic recovery.

The Commerce Department says that spending fell 1.2 percent last month. Auto sales were down 1.7 percent but there was weakness in a number of areas. Excluding autos, sales fell 1.1 percent.

The big decline cast new doubts about the strength of the economic recovery. Consumer spending accounts for 70 percent of total economic activity.

... The 1.2 percent decline in May sales was the largest decline since sales had fallen 2.2 percent in September. Analysts had been forecasting sales would be weak but remain in positive territory.

For May, the 1.7 percent drop in auto sales followed a 0.6 percent increase in April sales and was the poorest showing in this category since a 2.5 percent February decline.

Expecting a slight positive and getting a large negative is what I would call a "big miss."

The auto sales drop may be suspect, because it's not consistent with direct sales data from the car companies earlier this month.

But there is a clue to how to reconcile the conflict in this statement at the link: "GM sales rose 17 percent, led by a jump in sales of its four remaining brands - Chevrolet, Buick, GMC, and Cadillac - and big orders from fleet customers, such as rental car agencies."

Fleet sales are not part of consumer spending. If those orders were big enough, it may really be that individual and families were buying fewer vehicles in May. That's a big "uh-oh," because fleet sales aren't particularly profitable, and they may not be sustainable at current levels.

That fleet sales and not direct consumer sales might be driving what growth there is in vehicle sales this year (especially, I believe, at government wards GM and Chrysler, and not so much at other companies) is consistent with my observation last week at this post about the "private investment - transportation equipment" sector's outsized contribution to first-quarter GDP growth.

Until "analysts" figure out how to incorporate FUD (Fear, Uncertainty, and Doubt) into their estimates (admittedly difficult, but they get paid to estimate these things), you can expect that the "unexpected" will "unexpectedly" continue to occur -- even if the press stops using the words.

Cross-posted at BizzyBog.com.

Appearing on Monday’s The Colbert Report on Comedy Central to promote his book, "The Promise," MSNBC political analyst Jonathan Alter – also of Newsweek – asserted that President Barack Obama had "prevented another Great Depression," and declared that Obama had it more difficult than Franklin Delano Roosevelt because he had to "sweep up" like a "shovel brigade" after President Bush, as he used a word that had to be bleeped out for airing. Alter: "He proceeded to make history almost right away, not only because he was the first African-American elected President ... we were all living history. This man prevented another Great Depression."

He soon added: "At the beginning, FDR only had to deal with domestic problems. Obama was left to run what you could call a shovel brigade, you know, the guys who sweep up after the elephants when the elephants leave their s- (BLEEP) all over the circus, right? ... Roosevelt didn't have to deal with foreign policy when he became President. Obama had to deal with a whole nother mess, one of Bush's messes, in Afghanistan."

The MSNBC analyst made a similar assertion as he also appeared as a guest on the same night’s Joy Behar Show on HLN, and seemed to suggest that Obama is "frustrated" at having to clean u Bush’s "messes." Alter: "He`s frustrated. It`s always the shovel brigade, you know, cleaning up after the elephants when they leave the circus, whether it`s Wall Street, auto industry, Afghanistan – which was much worse – or this. He`s cleaning up Bush`s messes."

Alter, who has admitted in the past to disagreeing with conservatives 95 percent of the time, also notably did not voice any objection either time host Colbert ribbed him by calling him a "liberal." The interview began:

STEPHEN COLBERT: Hey, Jon. Good to have you on. Well, sir, here you are again, the liberal elite in the lion's den.

(AUDIENCE LAUGHS LIGHTLY)

JONATHAN ALTER, NEWSWEEK: There you go.

After Alter used an obscenity to describe the troubles he claimed President Bush had left for his successor, Colbert retorted: " Wow. You liberals sure have salty talk."

Below is a transcript of the relevant portion of the Monday, June 7, The Colbert Report on Comedy Central, followed by the relevant portion of the same day's Joy Behar Show on HLN:

#From The Colbert Report on Comedy Central:

STEPHEN COLBERT: Hey, Jon. Good to have you on. Well, sir, here you are again, the liberal elite in the lion's den.

(AUDIENCE LAUGHS LIGHTLY)

JONATHAN ALTER, NEWSWEEK: There you go.

COLBERT: The book is "The Promise: President Obama’s First Year." First of all, congratulations. This thing I understand is number four on the New York Times bestseller list.

ALTER: You are correct, sir.

COLBERT: Right ahead of Newt Gingrich’s "To Save America."

ALTER: Yes.

COLBERT: All right, obviously, you do not care about saving America or else you would let Newt win. Now, I'm torn here because you're a friend of the show.

ALTER: I hope so.

COLBERT: Are you?

ALTER: I believe so, yes, I hope.

COLBERT: Now, I've asked Newt to come on and he hasn't.

ALTER: Well, that's his problem.

(CHEERS AND APPLAUSE)

COLBERT: America, we're going with this one.

ALTER: Yes! (CHEERS AND APPLAUSE) I’m gonna get the Colbert bump!

COLBERT: We're giving it the Colbert bump.

ALTER: Fantastic!

COLBERT: All right, what is, what do you mean by "The Promise"? What, if I may, is the premise of "The Promise"?

ALTER: Well, the premise of "The Promise" is that he came to office with some of the highest expectations of any President ever, a man of great promise. He proceeded to make history almost right away, not only because he was the first African-American elected President-

COLBERT: By inspiring the Tea Parties.

ALTER: Well, he did do that.

COLBERT: Right, we wouldn’t have them if it wasn’t for Barack Obama. What else did he do?

ALTER: In the interview, he talks to me about that, that he inspired what he called the tea baggers. He meant the Tea Party.

(CHEERS AND APPLAUSE)

COLBERT: I'm sure he did. I'm sure he did. This is a sit-down with the President, then?

ALTER: Yes, it is. But I mostly talked to his aides, the Vice President, all the top people around him to try to paint a picture of how he made decisions in this historic time, Stephen. You know, this was, we were all living history. This man prevented another Great Depression. If we had stayed on the course that we were on-

COLBERT: Maybe, maybe, maybe.

ALTER: -we would have been in a depression.

COLBERT: We’ll never know, Jon, because he prevented it.

ALTER: That’s true.

COLBERT: Can't prove your points. Can’t prove a negative.

ALTER: It’s a counterfactual.

COLBERT: Exactly.

ALTER: And that's one reason why he hasn't gotten more credit. If we’s stayed on the path we were on when he took office – we were losing 740,000 jobs a month – we would have been in another depression by the end of 2009.

COLBERT: And then he would have something to pull us out of. I think he blew it. I think politically he blew it on that one.

ALTER: FDR had it easier than Obama did in that sense.

COLBERT: What are you talking about, FDR had it easier?

ALTER: Politically.

COLBERT: He had Nazis. Obama doesn't have Nazis.

ALTER: Well, you know what? He didn't for another eight years after he came in. So, at the beginning, FDR only had to deal with domestic problems. Obama was left to run what you could call a shovel brigade, you know, the guys who sweep up after the elephants when the elephants leave their s- (BLEEP) all over the circus, right?

COLBERT: Wow. You liberals sure have salty talk. By the way, would you care for a cherry? How would you identify, what kind would you say these are?

ALTER: I think they might be bing cherries.

COLBERT: Yes, they're actually Reniere’s. Bings aren't in season.

ALTER: Roosevelt didn't have to deal with foreign policy when he became President. Obama had to deal with a whole nother mess, one of Bush's messes, in Afghanistan, and I try to tell that story.

...

COLBERT: Jon, why can't the President get mad?

ALTER: He has a kind of an icy fury. It's scarier for the people around him.

COLBERT: He’s like a McDLT. He keeps the hot side hot and the cold side cold. Jon Alter, thank you so much. The book is "The Promise," and I promise we're giving this the bump.

#From the Joy Behar Show on HLN:

JONATHAN ALTER: Everybody wants him to deck somebody, you know, very satisfying. He`s not really into gestures. And he, you know, his problem, the thing that makes him frustrated, he does get pretty ticked off about it in private, but it`s kind of an icy fury.

JOY BEHAR: But you know what, Jonathan, that`s why I voted for the guy, because he is calm and pragmatic. Let me get mad. Let everybody get mad. You solve the problem. That`s how I see it.

ALTER: And thinks, he said, you know, the other day to Larry King, it`s not about my anger. That`s not, this is about plugging a hole and handling the cleanup. And so I do think he should be judged by results. He`s confident enough in the American people, he thinks they will, but he`s frustrated. It`s always the shovel brigade, you know, cleaning up after the elephants when they leave the circus, whether it`s Wall Street, auto industry, Afghanistan – which was much worse – or this. He`s cleaning up Bush`s messes.

BEHAR: The elephants, isn`t that the Republican party, the elephants? Hello!

Appearing on Monday’s The Colbert Report on Comedy Central to promote his book, "The Promise," MSNBC political analyst Jonathan Alter – also of Newsweek – asserted that President Barack Obama had "prevented another Great Depression," and declared that Obama had it more difficult than Franklin Delano Roosevelt because he had to "sweep up" like a "shovel brigade" after President Bush, as he used a word that had to be bleeped out for airing. Alter: "He proceeded to make history almost right away, not only because he was the first African-American elected President ... we were all living history. This man prevented another Great Depression."

He soon added: "At the beginning, FDR only had to deal with domestic problems. Obama was left to run what you could call a shovel brigade, you know, the guys who sweep up after the elephants when the elephants leave their s- (BLEEP) all over the circus, right? ... Roosevelt didn't have to deal with foreign policy when he became President. Obama had to deal with a whole nother mess, one of Bush's messes, in Afghanistan."

The MSNBC analyst made a similar assertion as he also appeared as a guest on the same night’s Joy Behar Show on HLN, and seemed to suggest that Obama is "frustrated" at having to clean u Bush’s "messes." Alter: "He`s frustrated. It`s always the shovel brigade, you know, cleaning up after the elephants when they leave the circus, whether it`s Wall Street, auto industry, Afghanistan – which was much worse – or this. He`s cleaning up Bush`s messes."

Alter, who has admitted in the past to disagreeing with conservatives 95 percent of the time, also notably did not voice any objection either time host Colbert ribbed him by calling him a "liberal." The interview began:

STEPHEN COLBERT: Hey, Jon. Good to have you on. Well, sir, here you are again, the liberal elite in the lion's den.

(AUDIENCE LAUGHS LIGHTLY)

JONATHAN ALTER, NEWSWEEK: There you go.

After Alter used an obscenity to describe the troubles he claimed President Bush had left for his successor, Colbert retorted: " Wow. You liberals sure have salty talk."

Below is a transcript of the relevant portion of the Monday, June 7, The Colbert Report on Comedy Central, followed by the relevant portion of the same day's Joy Behar Show on HLN:

#From The Colbert Report on Comedy Central:

STEPHEN COLBERT: Hey, Jon. Good to have you on. Well, sir, here you are again, the liberal elite in the lion's den.

(AUDIENCE LAUGHS LIGHTLY)

JONATHAN ALTER, NEWSWEEK: There you go.

COLBERT: The book is "The Promise: President Obama’s First Year." First of all, congratulations. This thing I understand is number four on the New York Times bestseller list.

ALTER: You are correct, sir.

COLBERT: Right ahead of Newt Gingrich’s "To Save America."

ALTER: Yes.

COLBERT: All right, obviously, you do not care about saving America or else you would let Newt win. Now, I'm torn here because you're a friend of the show.

ALTER: I hope so.

COLBERT: Are you?

ALTER: I believe so, yes, I hope.

COLBERT: Now, I've asked Newt to come on and he hasn't.

ALTER: Well, that's his problem.

(CHEERS AND APPLAUSE)

COLBERT: America, we're going with this one.

ALTER: Yes! (CHEERS AND APPLAUSE) I’m gonna get the Colbert bump!

COLBERT: We're giving it the Colbert bump.

ALTER: Fantastic!

COLBERT: All right, what is, what do you mean by "The Promise"? What, if I may, is the premise of "The Promise"?

ALTER: Well, the premise of "The Promise" is that he came to office with some of the highest expectations of any President ever, a man of great promise. He proceeded to make history almost right away, not only because he was the first African-American elected President-

COLBERT: By inspiring the Tea Parties.

ALTER: Well, he did do that.

COLBERT: Right, we wouldn’t have them if it wasn’t for Barack Obama. What else did he do?

ALTER: In the interview, he talks to me about that, that he inspired what he called the tea baggers. He meant the Tea Party.

(CHEERS AND APPLAUSE)

COLBERT: I'm sure he did. I'm sure he did. This is a sit-down with the President, then?

ALTER: Yes, it is. But I mostly talked to his aides, the Vice President, all the top people around him to try to paint a picture of how he made decisions in this historic time, Stephen. You know, this was, we were all living history. This man prevented another Great Depression. If we had stayed on the course that we were on-

COLBERT: Maybe, maybe, maybe.

ALTER: -we would have been in a depression.

COLBERT: We’ll never know, Jon, because he prevented it.

ALTER: That’s true.

COLBERT: Can't prove your points. Can’t prove a negative.

ALTER: It’s a counterfactual.

COLBERT: Exactly.

ALTER: And that's one reason why he hasn't gotten more credit. If we’s stayed on the path we were on when he took office – we were losing 740,000 jobs a month – we would have been in another depression by the end of 2009.

COLBERT: And then he would have something to pull us out of. I think he blew it. I think politically he blew it on that one.

ALTER: FDR had it easier than Obama did in that sense.

COLBERT: What are you talking about, FDR had it easier?

ALTER: Politically.

COLBERT: He had Nazis. Obama doesn't have Nazis.

ALTER: Well, you know what? He didn't for another eight years after he came in. So, at the beginning, FDR only had to deal with domestic problems. Obama was left to run what you could call a shovel brigade, you know, the guys who sweep up after the elephants when the elephants leave their s- (BLEEP) all over the circus, right?

COLBERT: Wow. You liberals sure have salty talk. By the way, would you care for a cherry? How would you identify, what kind would you say these are?

ALTER: I think they might be bing cherries.

COLBERT: Yes, they're actually Reniere’s. Bings aren't in season.

ALTER: Roosevelt didn't have to deal with foreign policy when he became President. Obama had to deal with a whole nother mess, one of Bush's messes, in Afghanistan, and I try to tell that story.

...

COLBERT: Jon, why can't the President get mad?

ALTER: He has a kind of an icy fury. It's scarier for the people around him.

COLBERT: He’s like a McDLT. He keeps the hot side hot and the cold side cold. Jon Alter, thank you so much. The book is "The Promise," and I promise we're giving this the bump.

#From the Joy Behar Show on HLN:

JONATHAN ALTER: Everybody wants him to deck somebody, you know, very satisfying. He`s not really into gestures. And he, you know, his problem, the thing that makes him frustrated, he does get pretty ticked off about it in private, but it`s kind of an icy fury.

JOY BEHAR: But you know what, Jonathan, that`s why I voted for the guy, because he is calm and pragmatic. Let me get mad. Let everybody get mad. You solve the problem. That`s how I see it.

ALTER: And thinks, he said, you know, the other day to Larry King, it`s not about my anger. That`s not, this is about plugging a hole and handling the cleanup. And so I do think he should be judged by results. He`s confident enough in the American people, he thinks they will, but he`s frustrated. It`s always the shovel brigade, you know, cleaning up after the elephants when they leave the circus, whether it`s Wall Street, auto industry, Afghanistan – which was much worse – or this. He`s cleaning up Bush`s messes.

BEHAR: The elephants, isn`t that the Republican party, the elephants? Hello!

The United States’ economic troubles are mounting and already prodigious.  While it’s true that Obama inherited a mess – created by government – he has made our economic problems progressively (pun intended) worse.  Amidst that failure, however, Obama has accomplished something that is simply hard to believe.

Before I get to that stunning achievement, it worthy to consider just how bad the employment picture really is.  Since the Great Depression, unemployment has reached this neighborhood of 10%, i.e. nearly double the historic average, only one other time.  That was during the early 1980’s.  That unemployment was brought on by the combined bad economic (read: “political”) decisions of Presidents Johnson, Nixon, Ford and Carter.  All combined, they produced high unemployment and high inflation in addition to new terminology – stagflation.  In order to wring inflation out of the system, President Reagan’s economic remedy eventually produced a record 92 months of growth but started with unemployment above 10%.  In fact, unemployment was above 9% for 18 months before steadily dropping to 5.3% at the end of Reagan’s two terms.

When Obama got his so-called stimulus package (read: record pork-barrel bill) passed, he promised that unemployment would not rise above 8%.  It has now been above 8% for 15 months – it has been above 9% for 12 months.  Obama openly admits that unemployment will be a problem for a long time to come.  He could not be more right considering that he is proposing a series of huge tax hikes, i.e. the expiration of the Bush tax cuts along with his cap and trade energy plan which is more rightly named “cap and tax.” Beyond that, Obama’s health care legislation has imposed huge regulatory costs on American business – costs which come at the expense of American jobs.  Those are some of the reasons there is so much talk of the possibility of a double-dip recession. Quite frankly, an unemployment rate above 8%, if not 9%, for another 24 months is a real possibility.

Unemployment that is nearly double the national average, and at a 30 year high with no end in sight, is incredibly bad and of deep concern to many Americans.

As bad as that is, however, Obama has accomplished something literally stunning.

According to Gallup polling released the first week of June – unemployment ranks only 4^th among Americans biggest concerns.  Indeed, Americans top 4 concerns are:

4) Unemployment

3) Healthcare costs (according to Rasmussen 60% want the healthcare bill repealed).

And a tie at the top between:

1) Federal Debt (Obama has added $6.5 trillion beyond what he can possibly claim her inherited – that’s $163,000 for every taxpaying family), and

1) Terrorism (attacks on American soil are way up courtesy of his weak foreign policy).

It is simply unbelievable that Obama has made Americans so worried about healthcare, terrorism and the federal debt that they would rank historically high unemployment 4^th.    That tells a very sorry tale about the State of the Union, and just think, only 2 ½ years left for him to “achieve” even more.

From The Hill:

Hiring by the U.S. Census Bureau is expected to spike May’s job figures dramatically.

Economist Mark Zandi of Moody’s.com projects the economy will have added 575,000 jobs in May, while the Economic Policy Institute’s (EPI) rough projection is for 560,000 jobs.

Either figure would represent the largest number of jobs created in any month since the dot-com crash of 2000.

Vice President Joe Biden, speaking at a Democratic fundraiser on Tuesday, touted what he said would be a positive report for Democrats, who are hoping a revitalized economy will help them in this fall’s elections. He said the May report would be “well beyond” the 290,000 jobs created in April, according to Reuters.

The numbers pose a problem for the administration, however, in terms of their reflection of economic growth.

Zandi expects that only 150,000 of the jobs created in May will come from the private sector, with 425,000 new jobs sparked by the once-a-decade Census.

Those jobs are temporary ones that will disappear as the Census completes the process of collecting data from people who did not mail in their forms.

In fact, hiring for the Census probably peaked in the first week of May, when 585,729 temporary workers were on the Census payroll, according to the agency’s figures.

The number of temporary workers had dropped to 572,779 the second week of May, and it is expected to drop further in coming weeks.

“I do think that we have peaked,” said Shelly Lowe, a public affairs official with the Census. “I do not expect it to go back up.”

Continue reading here. As this story details, even the Census hiring isn’t quite what it seems. With a failed stimulus and regulatory and legislative uncertainty crippling the economy’s growth prospects, expect more shell games with future jobs’ reports.

The federal government saw its tax collections fall by almost 20% in fiscal 2009 compared to fiscal 2008. Through the first seven months of the current fiscal year, year-over-year collections were down by another 4.5%.

New York Senator Charles Schumer (pictured at right; obtained from wbng.com) is desperately searching for another way to fleece taxpayers (because cutting spending is of course out of the question), and has come up with a "brilliant" idea. An unbylined Associated Press story gives Schumer's idea, a foreign call center tax, undeserved cover by going back to seven year-old information about industry job losses that doesn't reflect current conditions.

Here are the first five paragraphs from the AP story, followed by a later paragraph containing the outdated information:

Schumer wants to slow exodus of US call centers

In an effort to slow the exodus of U.S. telephone work to overseas services, Sen. Charles Schumer is introducing legislation that would impose an excise tax on companies that transfer calls with American area codes to foreign call centers.

The measure would also require telling U.S. customers that the call is being transferred and to which country.

Companies use call centers to give customers technical product support, answer billing questions or provide other information. They often use several operators.

The fee would be 25 cents for calls transferred to foreign countries. There would be no fee for a domestic call center. Companies would have to report quarterly their total customer service calls received and the number relayed overseas.

"If we want to put a stop to the outsourcing of American jobs, then we need to provide incentives for American companies to keep American jobs here," Schumer said last week. The New York Democrat said the excise tax would "also provide a reason for companies that have already outsourced jobs to bring them back."

... From 2001 to 2003, the United States lost 250,000 call center jobs to India and the Philippines, according to Technology Marketing Corp., a Norwalk, Conn.-based company specializing in call centers and telemarketing.

If AP's alleged journalists had done research that took yours truly all of about 10 minutes, it could have informed readers that the "exodus" to which Schumer refers hasn't been happening for at least five years.

Three executive summaries available at the National Association of Call Centers (NACC) inform us that U.S. call center employment has generally grown, even through the severe nationwide recession.

First, here's a bit of the Fourth Quarter 2008 Executive Summary (bolds are mine throughout; links are to small PDF files):

In the fourth quarter of 2008 more call center jobs were lost in the United States than were gained for the first time since the data was collected going back to 2005. This loss of jobs in the call center industry was tied directly to the recession within the United States economy.

In case the AP needs to buy a clue, the excerpted paragraph tells us that the industry gained jobs for three or more years until its job growth finally succumbed to the recession.

Next, there's the following from the Second Quarter of 2009:

In the second quarter of 2009 more call center jobs were added in the United States than were lost suggesting a continued recovery from the recession low of fourth (4th) quarter 2008.

So despite the fact that the economy as a whole lost hundreds of thousands of jobs a month during the first six months of 2009, call centers showed net employment gains.

Finally, this is from the Fourth Quarter 2009 Executive Summary:

In the fourth quarter of 2009 more call center jobs were gained in the United States than were lost creating a three quarter long job recovery from the recession low of fourth (4th) quarter 2008.

The NAAC only makes its Executive Summaries available to the public, generally providing specific employment numbers only to members. But I suspect the organization would have been glad to give AP reporters some details if only someone had called them. Maybe the wire service should set up an outbound call center that will do the follow-up work its reporters seem incapable of doing.

The bottom line is this: Exodus, schmexodus. Senator Schumer's interest in a foreign call center tax has almost nothing to do with jobs. His primary interest is to create yet another ongoing money pot for a government that will not control itself.

Shame on the insufferably lazy AP for giving the New York senator argumentative cover.

Cross-posted at BizzyBlog.com.

The federal government saw its tax collections fall by almost 20% in fiscal 2009 compared to fiscal 2008. Through the first seven months of the current fiscal year, year-over-year collections were down by another 4.5%.

New York Senator Charles Schumer (pictured at right; obtained from wbng.com) is desperately searching for another way to fleece taxpayers (because cutting spending is of course out of the question), and has come up with a "brilliant" idea. An unbylined Associated Press story gives Schumer's idea undeserved cover by going back to seven year-old information about industry job losses that doesn't reflect current conditions.

Here are the first five paragraphs from the AP story, followed by a later paragraph containing the outdated information:

Schumer wants to slow exodus of US call centers

In an effort to slow the exodus of U.S. telephone work to overseas services, Sen. Charles Schumer is introducing legislation that would impose an excise tax on companies that transfer calls with American area codes to foreign call centers.

The measure would also require telling U.S. customers that the call is being transferred and to which country.

Companies use call centers to give customers technical product support, answer billing questions or provide other information. They often use several operators.

The fee would be 25 cents for calls transferred to foreign countries. There would be no fee for a domestic call center. Companies would have to report quarterly their total customer service calls received and the number relayed overseas.

"If we want to put a stop to the outsourcing of American jobs, then we need to provide incentives for American companies to keep American jobs here," Schumer said last week. The New York Democrat said the excise tax would "also provide a reason for companies that have already outsourced jobs to bring them back."

... From 2001 to 2003, the United States lost 250,000 call center jobs to India and the Philippines, according to Technology Marketing Corp., a Norwalk, Conn.-based company specializing in call centers and telemarketing.

If AP's alleged journalists had done research that took yours truly all of about 10 minutes, it could have informed readers that the "exodus" to which Schumer refers hasn't been happening for at least five years.

Three executive summaries available at the National Association of Call Centers (NACC) inform us that U.S. call center employment has generally grown, even through the severe nationwide recession.

First, here's a bit of the Fourth Quarter 2008 Executive Summary (bolds are mine throughout; links are to small PDF files):

In the fourth quarter of 2008 more call center jobs were lost in the United States than were gained for the first time since the data was collected going back to 2005. This loss of jobs in the call center industry was tied directly to the recession within the United States economy.

In case the AP needs to buy a clue, the excerpted paragraph tells us that the industry gained jobs for three or more years until its job growth finally succumbed to the recession.

Next, there's the following from the Second Quarter of 2009:

In the second quarter of 2009 more call center jobs were added in the United States than were lost suggesting a continued recovery from the recession low of fourth (4th) quarter 2008.

So despite the fact that the economy as a whole lost hundreds of thousands of jobs a month during the first six months of 2009, call centers showed net employment gains.

Finally, this is from the Fourth Quarter 2009 Executive Summary:

In the fourth quarter of 2009 more call center jobs were gained in the United States than were lost creating a three quarter long job recovery from the recession low of fourth (4th) quarter 2008.

The NAAC only makes its Executive Summaries available to the public, generally providing specific employment numbers only to members. But I suspect the organization would have been glad to give AP reporters some details if only someone had called them. Maybe the wire service should set up an outbound call center that will do the follow-up work its reporters seem incapable of doing.

The bottom line is this: Exodus, schmexodus. Senator Schumer's interest in a foreign call center tax has almost nothing to do with jobs. His primary interest is to create yet another ongoing money pot for a government that will not control itself.

Shame on the insufferably lazy AP for giving the New York senator argumentative cover.

Cross-posted at BizzyBlog.com.

The current recession and, especially, the related financial panic in the fall of 2008 have given rise to an extraordinary surge in the U.S. government’s size, scope, and power. As I write, the financial panic has subsided, but the recession, already the longest since the 1930s, seems likely to continue for a long time. Even when it has passed, however, the government will certainly retain much of the augmentation it has gained recently. Hence, this crisis will prove to be the occasion for another episode of the ratchet effect in the growth of government.

According to the National Bureau of Economic Research, the recession began early in 2008, but the decline became severe only in the latter part of the year. The financial panic that came to a head in late September 2008 proved to be the catalyst for an accelerated decline in real GDP and rise in the rate of unemployment. The so-called credit crunch in the fall of 2008 prompted the Fed, the Treasury, and the Congress to take a series of extraordinary actions in quick succession.

In September 2008, the Federal Reserve System (“the Fed”) took control of the insurance giant American International Group (AIG), and the Federal Housing Finance Authority took over the huge government-sponsored enterprises Fannie Mae and Freddie Mac, secondary lending institutions that held or insured more than half of the total value of U.S. residential mortgages. On October 3, the president signed the Emergency Economic Stabilization Act, which, among other things, created the Troubled Assets Relief Program (TARP), authorizing as much as $700 billion for the purchase of so-called troubled assets, primarily mortgage-related securities, held by banks and other financial institutions. Instead of making the authorized purchases, however, the Treasury used the TARP to inject funds into the banks by purchasing their preferred shares. In this way, the government acquired an ownership interest in nearly 600 commercial banks.

Meanwhile, the Fed made a series of unprecedented types of asset purchases and loans, loan guarantees, and asset swaps, and provided other forms of assistance to securities dealers, money-market mutual funds, Fannie Mae, Freddie Mac, the Federal Home Loan Banks, Citigroup, fourteen foreign central banks, and buyers of certain asset-backed securities based on consumer and small-business loans. As a result, the monetary base of the United States increased by more than 100 percent between August 2008 and January 2009.

After Barack Obama became president, Congress passed the American Recovery and Reinvestment Act, authorizing a variety of federal spending increases and some tax reductions over the period from 2009 to 2019. According to estimates by the Congressional Budget Office, the combined amount of these spending increases and tax cuts comes to $787 billion over the ten-year period.

These actions, among others, caused federal outlays to jump by 24 percent in fiscal year 2009, raising the U.S. government’s spending from 21 percent of GDP to 26 percent. They also increased the budget deficit by 246 percent, to approximately $1.6 trillion. Public debt held by the public rose from $5.8 trillion to $7.6 trillion during the course of fiscal year 2009, a 31 percent increase. These spending and borrowing surges will certainly have very long-lasting consequences.

Although these consequences are now in large part unavoidable, amelioration of their harm, as well as the prevention of similar government actions in a later crisis, requires a renewed commitment to liberty and a heightened understanding of its attainment and preservation. Toward these ends, the Independent Institute continues to work relentlessly.

Update - 5/27, 3:08 PM | Lachlan Markay: A new Harvard study finds that increased government spending actually reduces economic activity, contradicting the basic premise behind CBO's assumptions. Details below.

Good economic news is so rare for the current administration, that when some does emerge, many in the media parrot it as fact without really examining the claims that undergird it. New CBO numbers on the stimulus, for instance, have been trumpeted as proof the legislation at least helped, despite the fact that the numbers have little to no basis in reality.

Congressional Budget Office models are based on the assumption that stimulus spending will create jobs. They assume the conclusion they purport to demonstrate, and then claim they've demonstrated it. But if the model is inaccurate or simply based on false premises, it simply goes on tallying jobs "created or saved" without regard to the actual employment rate.

In March, a reporter asked CBO director Doug Elmendorf: "If the stimulus bill did not do what it was originally forecast to do, then that would not have been detected by the subsequent analysis, right?" His response: "That's right. That's right." Yet despite those numbers' disconnect from reality, the media continue to report them as fact, and proof that the stimulus is working.

"[T]oday’s CBO report confirms that things could have been much worse without the stimulus," claimed ABC's Z. Byron Wolf yesterday. "The effects of the stimulus, according to the report, will continue to increase through part of 2010, before subsiding."

Wolf neglected to mention that the reported GDP increase of between 1.7 and 4.2 percent and decline in unemployment of between 0.7 and 1.5 percent were based on equations, not, you know, reality. As one ABC commenter put it, "You do realize that the CBO didn't actually use any real world data to prove this, right?" Either Wolf did not realize that fact, or he simply didn't think it worth a mention.

Reuters's Andy Sullivan also reported on the data without mentioning its disconnect from reality. The stimulus, Sullivan stated without challenge, "put up to 2.8 million people to work and boosted GDP by up to 4.2 percent in the first three months of 2010." Notice the use of "up to" -- Sullivan made sure to repeat the most optimistic claims in the lede.

Ironically, Sullivan noted that "CBO's latest estimate does not differ significantly from its previous assessments," but apparently failed to consider that the use of equations tends to produce similar results. The similarities underscore the danger of relying on such equations: if the CBO got something wrong, how would it know? New data continues to confirm projections. Meanwhile, in flyover country, Americans are still out of work.

Jay Bookman of the Atlanta Journal-Constitution took it one step further. Not only do the CBO numbers confirm that the stimulus is working, but they demonstrate that the bill "has had an even bigger economic impact than expected." Never mind that CBO's numbers don't tell us anything about its actual economic impact.

Bookman added, "the stimulus that according to some hasn’t created one single job has been and continues to be an important success." Got it, naysayers? The stimulus worked. The equations told me so. Pay no attention to the 9.9 percent unemployment rate. It worked, dang it.

The Atlantic's Andrew Sullivan and Ben Frumin at Talking Points Memo also regurgitated CBO's numbers without examining the methadology.

It's not as if that methodology is a secret. Some news outlets managed to report on it factually. "CBO's analysis was based on economic modeling derived from past spending and tax-cut programs," reported Stephen Dinan for the Washington Times, "which means its calculations are an estimate of what is going on, not an actual count of specific jobs created."

That, of course, explains the consistency of CBO's numbers, despite the extreme volatility and unpredictability of the American economy. National Review's Stephen Spuriell makes "a bold prediction":

The CBO's next quarterly report on the stimulus will come to roughly the same conclusions, regardless of what we actually observe with regard to GDP, the unemployment rate, or the number of people employed. Let me be even bolder: All of the CBO's quarterly reports from now until the law's expiration will reach the same conclusions, because the CBO's models beg the question: They assume that certain inputs in the form of government  spending have certain predictable effects on GDP and employment that are in line with the Keynesian view that fiscal stimulus creates jobs. Every quarter, the CBO just re-runs its models, regardless of what we are observing in the real world. The agency is repeating itself...

Critics of the Keynesian view of things have disputed the CBO's multipliers from the beginning, and our arguments have not changed (e.g. if every dollar of government spending ultimately raises the GDP by the amount CBO says it does, then we should just let the government spend all the money). Commentators who are treating the latest CBO report as new empirical evidence that the stimulus did great things for the economy either don't know what they're talking about or else they are being very hackish.

*****UPDATE:

Via Ed Morrissey, a new study conducted by Harvard professors Lauren Cohen, Joshua Coval, and Christopher Malloy has found that "as a state's congressional delegation grew in stature and power in Washington, D.C.,"

companies experienced lower sales and retrenched by cutting payroll, R&D, and other expenses. Indeed, in the years that followed a congressman's ascendancy to the chairmanship of a powerful committee, the average firm in his state cut back capital expenditures by roughly 15 percent, according to their working paper, "Do Powerful Politicians Cause Corporate Downsizing?"

"It was an enormous surprise, at least to us, to learn that the average firm in the chairman's state did not benefit at all from the unanticipated increase in spending," Coval reports.

The comparison between congressional pork and large-scale stimulus spending is not exact, but this study does lend weight to critics of the Keyensian model, which backstops the CBO's employment and economic activity estimates.

Update - 5/27, 3:08 PM | Lachlan Markay: A new Harvard study finds that increased government spending actually reduces economic activity, contradicting the basic premise behind CBO's assumptions. Details below.

Good economic news is so rare for the current administration, that when some does emerge, many in the media parrot it as fact without really examining the claims that undergird it. New CBO numbers on the stimulus, for instance, have been trumpeted as proof the legislation at least helped, despite the fact that the numbers have little to no basis in reality.

Congressional Budget Office models are based on the assumption that stimulus spending will create jobs. They assume the conclusion they purport to demonstrate, and then claim they've demonstrated it. But if the model is inaccurate or simply based on false premises, it simply goes on tallying jobs "created or saved" without regard to the actual employment rate.

In March, a reporter asked CBO director Doug Elmendorf: "If the stimulus bill did not do what it was originally forecast to do, then that would not have been detected by the subsequent analysis, right?" His response: "That's right. That's right." Yet despite those numbers' disconnect from reality, the media continue to report them as fact, and proof that the stimulus is working.

"[T]oday’s CBO report confirms that things could have been much worse without the stimulus," claimed ABC's Z. Byron Wolf yesterday. "The effects of the stimulus, according to the report, will continue to increase through part of 2010, before subsiding."

Wolf neglected to mention that the reported GDP increase of between 1.7 and 4.2 percent and decline in unemployment of between 0.7 and 1.5 percent were based on equations, not, you know, reality. As one ABC commenter put it, "You do realize that the CBO didn't actually use any real world data to prove this, right?" Either Wolf did not realize that fact, or he simply didn't think it worth a mention.

Reuters's Andy Sullivan also reported on the data without mentioning its disconnect from reality. The stimulus, Sullivan stated without challenge, "put up to 2.8 million people to work and boosted GDP by up to 4.2 percent in the first three months of 2010." Notice the use of "up to" -- Sullivan made sure to repeat the most optimistic claims in the lede.

Ironically, Sullivan noted that "CBO's latest estimate does not differ significantly from its previous assessments," but apparently failed to consider that the use of equations tends to produce similar results. The similarities underscore the danger of relying on such equations: if the CBO got something wrong, how would it know? New data continues to confirm projections. Meanwhile, in flyover country, Americans are still out of work.

Jay Bookman of the Atlanta Journal-Constitution took it one step further. Not only do the CBO numbers confirm that the stimulus is working, but they demonstrate that the bill "has had an even bigger economic impact than expected." Never mind that CBO's numbers don't tell us anything about its actual economic impact.

Bookman added, "the stimulus that according to some hasn’t created one single job has been and continues to be an important success." Got it, naysayers? The stimulus worked. The equations told me so. Pay no attention to the 9.9 percent unemployment rate. It worked, dang it.

The Atlantic's Andrew Sullivan and Ben Frumin at Talking Points Memo also regurgitated CBO's numbers without examining the methadology.

It's not as if that methodology is a secret. Some news outlets managed to report on it factually. "CBO's analysis was based on economic modeling derived from past spending and tax-cut programs," reported Stephen Dinan for the Washington Times, "which means its calculations are an estimate of what is going on, not an actual count of specific jobs created."

That, of course, explains the consistency of CBO's numbers, despite the extreme volatility and unpredictability of the American economy. National Review's Stephen Spuriell makes "a bold prediction":

The CBO's next quarterly report on the stimulus will come to roughly the same conclusions, regardless of what we actually observe with regard to GDP, the unemployment rate, or the number of people employed. Let me be even bolder: All of the CBO's quarterly reports from now until the law's expiration will reach the same conclusions, because the CBO's models beg the question: They assume that certain inputs in the form of government  spending have certain predictable effects on GDP and employment that are in line with the Keynesian view that fiscal stimulus creates jobs. Every quarter, the CBO just re-runs its models, regardless of what we are observing in the real world. The agency is repeating itself...

Critics of the Keynesian view of things have disputed the CBO's multipliers from the beginning, and our arguments have not changed (e.g. if every dollar of government spending ultimately raises the GDP by the amount CBO says it does, then we should just let the government spend all the money). Commentators who are treating the latest CBO report as new empirical evidence that the stimulus did great things for the economy either don't know what they're talking about or else they are being very hackish.

*****UPDATE:

Via Ed Morrissey, a new study conducted by Harvard professors Lauren Cohen, Joshua Coval, and Christopher Malloy has found that "as a state's congressional delegation grew in stature and power in Washington, D.C.,"

companies experienced lower sales and retrenched by cutting payroll, R&D, and other expenses. Indeed, in the years that followed a congressman's ascendancy to the chairmanship of a powerful committee, the average firm in his state cut back capital expenditures by roughly 15 percent, according to their working paper, "Do Powerful Politicians Cause Corporate Downsizing?"

"It was an enormous surprise, at least to us, to learn that the average firm in the chairman's state did not benefit at all from the unanticipated increase in spending," Coval reports.

The comparison between congressional pork and large-scale stimulus spending is not exact, but this study does lend weight to critics of the Keyensian model, which backstops the CBO's employment and economic activity estimates.

Update - 5/27, 3:08 PM | Lachlan Markay: A new Harvard study finds that increased government spending actually reduces economic activity, contradicting the basic premise behind CBO's assumptions. Details below.

Good economic news is so rare for the current administration, that when some does emerge, many in the media parrot it as fact without really examining the claims that undergird it. New CBO numbers on the stimulus, for instance, have been trumpeted as proof the legislation at least helped, despite the fact that the numbers have little to no basis in reality.

Congressional Budget Office models are based on the assumption that stimulus spending will create jobs. They assume the conclusion they purport to demonstrate, and then claim they've demonstrated it. But if the model is inaccurate or simply based on false premises, it simply goes on tallying jobs "created or saved" without regard to the actual employment rate.

In March, a reporter asked CBO director Doug Elmendorf: "If the stimulus bill did not do what it was originally forecast to do, then that would not have been detected by the subsequent analysis, right?" His response: "That's right. That's right." Yet despite those numbers' disconnect from reality, the media continue to report them as fact, and proof that the stimulus is working.

"[T]oday’s CBO report confirms that things could have been much worse without the stimulus," claimed ABC's Z. Byron Wolf yesterday. "The effects of the stimulus, according to the report, will continue to increase through part of 2010, before subsiding."

Wolf neglected to mention that the reported GDP increase of between 1.7 and 4.2 percent and decline in unemployment of between 0.7 and 1.5 percent were based on equations, not, you know, reality. As one ABC commenter put it, "You do realize that the CBO didn't actually use any real world data to prove this, right?" Either Wolf did not realize that fact, or he simply didn't think it worth a mention.

Reuters's Andy Sullivan also reported on the data without mentioning its disconnect from reality. The stimulus, Sullivan stated without challenge, "put up to 2.8 million people to work and boosted GDP by up to 4.2 percent in the first three months of 2010." Notice the use of "up to" -- Sullivan made sure to repeat the most optimistic claims in the lede.

Ironically, Sullivan noted that "CBO's latest estimate does not differ significantly from its previous assessments," but apparently failed to consider that the use of equations tends to produce similar results. The similarities underscore the danger of relying on such equations: if the CBO got something wrong, how would it know? New data continues to confirm projections. Meanwhile, in flyover country, Americans are still out of work.

Jay Bookman of the Atlanta Journal-Constitution took it one step further. Not only do the CBO numbers confirm that the stimulus is working, but they demonstrate that the bill "has had an even bigger economic impact than expected." Never mind that CBO's numbers don't tell us anything about its actual economic impact.

Bookman added, "the stimulus that according to some hasn’t created one single job has been and continues to be an important success." Got it, naysayers? The stimulus worked. The equations told me so. Pay no attention to the 9.9 percent unemployment rate. It worked, dang it.

The Atlantic's Andrew Sullivan and Ben Frumin at Talking Points Memo also regurgitated CBO's numbers without examining the methadology.

It's not as if that methodology is a secret. Some news outlets managed to report on it factually. "CBO's analysis was based on economic modeling derived from past spending and tax-cut programs," reported Stephen Dinan for the Washington Times, "which means its calculations are an estimate of what is going on, not an actual count of specific jobs created."

That, of course, explains the consistency of CBO's numbers, despite the extreme volatility and unpredictability of the American economy. National Review's Stephen Spuriell makes "a bold prediction":

The CBO's next quarterly report on the stimulus will come to roughly the same conclusions, regardless of what we actually observe with regard to GDP, the unemployment rate, or the number of people employed. Let me be even bolder: All of the CBO's quarterly reports from now until the law's expiration will reach the same conclusions, because the CBO's models beg the question: They assume that certain inputs in the form of government  spending have certain predictable effects on GDP and employment that are in line with the Keynesian view that fiscal stimulus creates jobs. Every quarter, the CBO just re-runs its models, regardless of what we are observing in the real world. The agency is repeating itself...

Critics of the Keynesian view of things have disputed the CBO's multipliers from the beginning, and our arguments have not changed (e.g. if every dollar of government spending ultimately raises the GDP by the amount CBO says it does, then we should just let the government spend all the money). Commentators who are treating the latest CBO report as new empirical evidence that the stimulus did great things for the economy either don't know what they're talking about or else they are being very hackish.

*****UPDATE:

Via Ed Morrissey, a new study conducted by Harvard professors Lauren Cohen, Joshua Coval, and Christopher Malloy has found that "as a state's congressional delegation grew in stature and power in Washington, D.C.,"

companies experienced lower sales and retrenched by cutting payroll, R&D, and other expenses. Indeed, in the years that followed a congressman's ascendancy to the chairmanship of a powerful committee, the average firm in his state cut back capital expenditures by roughly 15 percent, according to their working paper, "Do Powerful Politicians Cause Corporate Downsizing?"

"It was an enormous surprise, at least to us, to learn that the average firm in the chairman's state did not benefit at all from the unanticipated increase in spending," Coval reports.

The comparison between congressional pork and large-scale stimulus spending is not exact, but this study does lend weight to critics of the Keyensian model, which backstops the CBO's employment and economic activity estimates.

The New York Times's former Middle East Bureau Chief thinks violent revolt is a laudable response to economic woes, and that murder is at least acceptable in pursuit of a far-left agenda. The media so concerned with the potential for violence from conservative groups are completely silent.

"Here’s to the Greeks," wrote Chris Hedges at Truthdig.com. "They know what to do when corporations pillage and loot their country." Riot, by Hedges's account, is the correct response. That the riots in Greece have so far killed three innocent people doesn't seem to bother him.

Oh but it's not violence borne of a frustration with an unsustainable welfare state that finally reached the inevitable conclusion of skyrocketing public benefits coupled with a fast-shrinking population. No, the riots are "a struggle for liberation" against the oppressive bourgeoisie (capitalists). Hedges is advocating in no vague terms mass political violence. The response from the media: crickets.

Greeks, Hedges writes,

know what to do when Goldman Sachs and international bankers collude with their power elite to falsify economic data and then make billions betting that the Greek economy will collapse. They know what to do when they are told their pensions, benefits and jobs have to be cut to pay corporate banks, which screwed them in the first place. Call a general strike. Riot. Shut down the city centers. Toss the bastards out. Do not be afraid of the language of class warfare—the rich versus the poor, the oligarchs versus the citizens, the capitalists versus the proletariat. The Greeks, unlike most of us, get it.

Language really does not get much more violent and incendiary than that. Hedges is a rhetorical bomb-thrower, but by the mainstream media's standards, he might as well be an actual bomb-thrower.

Journalists have condemned language for less, after all. For months, we have heard that heated rhetoric at tea party rallies could dangerously provoke protesters -- despite the total absence of violence at those rallies. Now we have actual violence taking place across the Atlantic, and an American journalist advocating its importation -- all at a time when populist tensions are dangerously high in the United States.

Hedges isn't holding a sign demanding that we "water the tree of liberty with the blood of patriots and tyrants." The utterance of that Thomas Jefferson quote at a tea party was enough to send media liberals into hysterics. He is condoning the murder of innocent Greeks, and suggesting that Americans whip up some populist violence of their own.

Along the way, Hedges manages to regurgitate every leftist cliche concerning capitalism, globalization, conservatism, and the evil corporations devised since 1960. His opinions are his, and the piece at Truthdig is commentary. He is wrong in virtually all these areas, but it is not the job of the news media to debunk every wackjob conspiracy theory and accusation of white collar crime uttered by the liberal intelligentsia.

It is the media's self-appointed duty, however, to report fairly and accurately, regardless of political considerations. Yet even after condemning rhetoric on the right for supposedly inciting violence, major media outlets -- beyond Hedges's former employer -- have not only been completely silent on his advocacy of violence, but have even given him a platform to voice his radical views.

As Reason's Matt Welch points out,

Hedeges' recent apocalyptic tear (which has resonance for at least some libertarians, not to mention Pagans) includes urging on sabotage two months ago, and calling corporations "little Eichmanns" last week. And this is no fringe character here–Hedges continues to receive respectful hearings in the Washington Post, Philadelphia Inquirer, Vancouver Sun, et al, and just last week he was named a finalist for the L.A. Press Club's Online Journalist of the Year. You will search in vain for any mention of Hedges by the scores of journalistic commenters who have been warning for more than a year now (inaccurately, in my opinion) about impending political violence, inciteful right-wing rhetoric, and borderline sedition.

In short, memebers of the the journalistic establishment continue not only to give Hedges's opinions fair hearings, but even to lend their respective megaphones and give awards to a man who believes that fatal political violence is commendable, and should be replicated on the home front.

A must read in today’s New York Times: (it happens)

With the Senate’s passage of financial regulation, Congress and the White House have completed 16 months of activity that rival any other since the New Deal in scope or ambition. Like the Reagan Revolution or Lyndon Johnson’s Great Society, the new progressive period has the makings of a generational shift in how Washington operates.

First came a stimulus bill that, while aimed mainly at ending a deep recession, also set out to remake the nation’s educational system and vastly expand scientific research. Then President Obama signed a health care bill that was the biggest expansion of the safety net in 40 years. And now Congress is in the final stages of a bill that would tighten Wall Street’s rules and probably shrink its profit margins.

If there is a theme to all this, it has been to try to lift economic growth while also reducing income inequality. Growth in the decade that just ended was the slowest in the post-World War II era, while inequality has been rising for most of the last 35 years.

It is far too early to know if these efforts will work. Their success depends enormously on execution and, in the case of financial regulation, specifically on the Federal Reserve, which did not distinguish itself during the housing bubble.

Already, though, one downside to the legislative spurt does seem clear. By focusing on long-term problems, Mr. Obama and the Democrats have given less than their full attention to the economy’s current weakness and turned off a good number of voters.

After months of discussion, and with the unemployment rate hovering near a 27-year high, Democratic leaders said Thursday they had finally reached agreement on a bill that would send aid to states and take other steps to increase job growth. Congress plans to vote on the bill next week. But some of the money will not be spent for months and may not be enough to affect voters’ attitudes before November’s midterm elections.

Still, the turnabout since Jan. 20 — the first anniversary of Mr. Obama’s inauguration and the day after Scott Brown, a Republican, won a Senate seat in liberal Massachusetts — has been remarkable. Then, commentators pronounced the Obama presidency nearly dead. Today, he looks more like a liberal answer to Ronald Reagan.

“If you’d asked me about this administration after Scott Brown was elected, I’d have told you it was going to fizzle into virtually nothing,” said Theda Skocpol, the Harvard political scientist. “Now it could easily be one of the pivotal periods in domestic policy.” But, Ms. Skocpol added, “It will depend on what happens in the next two elections.”

Continue reading here. Ms. Skocpol is right; the next two elections will be decisive. You can’t say you weren’t warned.

On Saturday’s Huckabee show on FNC, as the show was broadcast from Las Vegas, singer Wayne Newton appeared as a guest to discuss the economic situation in the city, and, when asked by host Mike Huckabee his reaction to President Obama’s remarks from last year attacking businesses for indulging in trips to Las Vegas, Newton did not mince words: "I think that it was the most irresponsible, arrogant thing I have ever heard a President of the United States say."

Fellow guest and Nevada Governor Jim Gibbons related that hundreds of conventions were canceled after the President’s words, costing the city a fortune in lost business: "There's no doubt that the people of Las Vegas, the city of Las Vegas were severely hurt by the President's remarks. About 400 conventions, business meetings, and that were canceled because of his remarks; $100 million was lost by the community at that remark. People lost their jobs. This city took a real blow when the President made that remark. He was wrong then, and then he said it again, and I don't understand why he keeps picking on Las Vegas."

Newton jumped in again and suggested that the President has been hypocritical in holding political fundraisers in Las Vegas: "He was not so incensed with Las Vegas, that he then decided to come here and do two fundraisers."

Below is a transcript of the relevant portion of the Saturday, May 22, Huckabee on FNC:

MIKE HUCKABEE: Wayne, when people think of Las Vegas, they think of Wayne Newton. You have been entertaining in this city for many, many years. When the President made the comments about "Don’t go to Vegas," did you take that a little personally?

WAYNE NEWTON: Of course I took it personal. I think that it was the most irresponsible, arrogant thing I have ever heard a President of the United States say.

(AUDIENCE APPLAUSE)

HUCKABEE: And, Governor, let me address this. Did you see-

FRANK CALIENDO, COMEDIAN: Let me, can I, can I ask a quick question?

HUCKABEE: Yeah, go ahead.

CALIENDO: How do you really feel about it? (AUDIENCE LAUGHTER) Whoa! Newton!

NEWTON: Down, big boy, down.

(AUDIENCE LAUGHTER)

HUCKABEE: Governor, you saw the revenues of the state. Did it have an impact, and, if so, to what level?

GOVERNOR JIM GIBBONS (R-NV): Mike, there’s no doubt that the people of Las Vegas, the city of Las Vegas were severely hurt by the President’s remarks. About 400 conventions, business meetings, and that were canceled because of his remarks; $100 million was lost by the community at that remark. People lost their jobs. This city took a real blow when the President made that remark. He was wrong then, and then he said it again, and I don’t understand why he keeps picking on Las Vegas.

NEWTON: May I jump in there also?

HUCKABEE: Certainly.

NEWTON: He was not so incensed with Las Vegas, that he then decided to come here and do two fundraisers.

(AUDIENCE APPLAUSE)

GIBBONS: I guess he can come here to take our money, but he can’t come here and let people spend their money.

During recessions, people lose their jobs,see their salaries reduced or frozen and find that life is harder than it used to be. Well, that’s if you work for the private sector. As I am mentioned here, since the beginning of the recession, the private sector have lost many jobs while the public sector managed to gain some. Also, data shows federal workers earned more money for occupations that exist both in government and the private sector, and that’s before  the value of health, pension and other benefits are included to the value of the compensation.

Today, I look at the increase in compensation during the recession between the private and the public sector. This chart above compares percent changes in public and private worker compensation within each of the five largest sectors in the United States during the 12 months ending March 2010. Compensation includes health and retirement benefits (roughly 30% of compensation), salary (roughly 70% of compensation), and legally required benefits such as payments for Social Security and Medicare.  The sectors examined here employ over 65 million workers, or nearly half of all employed Americans. These sectors are (in order from largest to smallest by total employment): Office and Administrative Support, Sales, Food Preparation and Service, Production, and Transportation and Material Moving.

Across the sectors examined, compensation costs in the private sector increased 1.78% from March 2009 to March 2010.  Public sector compensation increased by 8% more than its private counterpart at a level of 1.92%.

Importantly these compensation increases occur on top of the existing public sector wage differential.  According to the Bureau of Labor Statistics’ most recent estimate, as of September 2009, the average public sector worker received $29.40 in hourly compensation while the average private sector worker received $27.49 in total compensation, or $1.91 less.

That’s even more reasons to tell your kids that being a doctor, a fireman, a princess or a spy when they grow up is a bad idea. A bureaucrat is was they want to be. That’s if they can’t work for the Union industry of course.

Believe it or not, there are some who still fail to grasp the notion that the legacy media are overwhelmingly liberal. They act shocked when the media do what they usually do -- toe the liberal line -- and search in vain for some way to explain the apparent bias.

"Does the Media Care About Unemployment?" asked Kevin Drum, a writer for the liberal Mother Jones. Drum postulated that that "the media focused way more on economic hard luck stories in the early 80s than they do now."

While a liberal noting the double standard is refreshing, Drum went on to attribute it to a litany of possible reasons, all the while ignoring the obvious, and painfully simple answer right before his eyes: as B. Daniel Blatt writes, "Because a Republican’s Not in the White House."

Drum wrote,

...it's true — or at least, it's my impression that it's true — that the media focused way more on economic hard luck stories in the early 80s than they do now. I have a strong memory of being practically bombarded with this stuff back then. Today, though, not so much. It's not that coverage of unemployment is absent, just that it strikes me as much less urgent than it was in the early 80s.

I don't know why. Maybe Brad [DeLong]'s reasons are the right ones. Maybe it's just been crowded out by other financial news like bank bailouts and subprime ghost towns. Maybe the social safety net is more effective now than it was 30 years ago. Maybe it has something to do with the fact that today's stubbornly high numbers are concentrated among the long-term unemployed, as shown in the chart on the right. Maybe the rise of two-earner families has reduced the pain of unemployment somewhat. Maybe nobody really believes any longer that the government can do anything about this, so it's not worth reporting on. I don't know. But like Brad, it strikes me as quite odd.

Drum comes so close, but just when you think he's about to hit the media bias nail on the head, he trails off and ends the post.

The extent of the double standard goes beyond the volume of coverage to its tone. Last year, NewsBusters reported that the networks called identical unemployment numbers good news for Obama but "all" bad for President Reagan. A Business and Media Institute study issued the following findings:

Network Reports 13 Times More Negative Under Reagan than Under Obama: An overwhelming majority of stories mentioning the Reagan administration were negative 91 percent (20 out of 22) while only 7 percent (1 out of 15) of Obama administration mentions were negative. Additionally, Obama mentions were favorable 87 percent of the time, but there were zero positive mentions of Reagan.

Networks Connect Reagan White House to Negative Jobs Numbers Almost Twice as Often as Obama: Unemployment stories in 1982 mentioned the Reagan administration 71 percent of the time (22 out of 31), but 2009 stories mentioned the Obama administration only 40 percent of the time (14 out of 35).

Charles Gibson: 9.4% Unemployment ‘Good News' (Obama) and also ‘All' Bad (Reagan): The unemployment rate reached 9.4 percent under Reagan and Obama. But ABC's Charles Gibson covered the identical rate very differently in 1982 than in 2009. Gibson told viewers May 7, 1982, "[T]here really isn't any good news in the statistics. All the numbers are bad." But by 2009, Gibson had turned into an optimist citing "good news" June 5 and "hope the economy may be finally turning the corner" Aug. 7.

Of course one needn't go all the way back to the 1980s to see evidence of this double standard. The discrepancies in coverage between economic news during Obama's presidency and such news during the previous administration is glaring.

CBS's Katie Couric, for instance, last July touted four straight quarters of GDP decline, as "the latest evidence the recession is easing" and said that the "glimmer of hope just got a whole lot brighter." ABC's Elizabeth Vargas, meanwhile, touted a "new optimism about an economic recovery."

A year before, Couric had labeled a 1.9 percent economic expansion "disappointing." ABC and NBC were silent on that economic news.

Tom Maguire is astounded at the left's -- or at least Drum's -- inability to see the simplicity of this double standard:

Wow. There is not a righty in the world that can't suggest a reason for the media's posture.  In fact, even before the election it was a truism that the tone of the press coverage of the economy would change to smiley faces the day Obama was sworn in.

Kevin is puzzled as to why the media back in 1983 (pre-Fox, pre-Rush) felt comfortable bashing Reagan, that stupid heartless conservative cowboy.  Yet today, the media is giving a pass to Obama, determined not to give aid and comfort to the racist tea-baggers who question his economic policies.  Gosh, I wonder what's going on.  Couldn't be media bias, since in LibWorld that doesn't exist - they are owned by evil corporations, some supported the invasion of Iraq, and anyway, Fox News, Wall Street Journal, Rush Limbaugh, neener, neener, neener.

The comparison of the results contained in the April 2010 Monthly Treasury Statement released this afternoon to April of last year is bad enough. But if the American people knew that April 2010 came in about a quarter-trillion dollars worse than both 2007 and 2008 with almost 40% less in tax collections, most of them would be appalled. Many more than are already doing so would be questioning what in the heck this administration and Congress are up to.

That's why you probably won't see establishment media outlets like the Associated Press go back more than one year in their detailed comparisons, even though during the presidency of George W. Bush, writers like the AP's Martin Crutsinger and others frequently went back to fiscal 2000 and 2001 to remind readers of the surpluses that occurred during those fiscal years. The intent, of course, was to imply that things were just peachy keen under Bill Clinton until the eeeeevil Bush ruined everything. As noted later, that ain't so.

Here is the AP's Crutsinger on today's Treasury Statement, blissfully pretending, with the exception of one cryptic reference, that the two high-collection Bush years neeeeeeeever happened:

The federal budget deficit hit an all-time high for the month of April as government revenue fell sharply.

The Treasury Department said Wednesday the April deficit soared to $82.7 billion, the largest imbalance for that month on record. That was significantly higher than last year's April deficit of $20 billion and above the $30 billion deficit private economists had anticipated.

The government normally runs surpluses in April as millions of taxpayers file their income tax returns. However, income tax payments were down this April, reflecting the impact of the recession which has pushed millions of people out of work.

Total revenues for April were down 7.9 percent from a year ago, dipping to $245.3 billion.

... The trillion-dollar-plus deficits are being driven by the impact of the recession, which has cut government tax revenue while driving up spending.

Analysts estimate that roughly one-third of the increase in the deficits over the past two years came from lost revenue — the result of fewer people working and lower corporate profits. Another third is from increased government spending that normally occurs in a downturn, such as higher payments for unemployment benefits and food stamps. The final third reflects the added government spending on the $787 billion stimulus bill and the $700 billion financial bailout.

Crutsinger mentioned "the past two years" in the last excerpted paragraph and had a golden opportunity to tell readers the degree of the difference between this year and 2008, but did not. When you see how big the difference is, you'll totally understand why:

Since Crutsinger has already used up the word "sharp" to describe April 2010's collections decline vs. April 2009 of 7.9%, what adjective would he have employed to describe the 39.3% drop from April 2008, or the 22.6% decline in year-to-date receipts?

By far, the most troubling pair of numbers in what's presented above is April 2010's individual income tax collections ($107.3 billion) vs. April 2008 ($244.0) billion. That's a 56% drop. It's the most troubling because, as a BizzyBlog commenter pointed out earlier this evening, that April number includes two things besides withheld income taxes: "the 2009 tax settlement that occurs on April 15th for individuals" and "tax receipts from individuals ... (for) the first installment of 2010 estimated taxes." The commenter added that "Historically, individual estimated taxes are what drives the usual surplus months." I should also note that the commenter saw no mention in media reports of the estimated-tax component.

What this means is that as a group, quarterly tax-filers (largely entrepreneurs, businesspeople, and investors) had such a bad 2009 that during 2010 they will mostly be making low required quarterly payments (generally 25% of last year's liability each quarter). As a result, collections in June and September, which like April are usually months pretty flush, will more than likely also be weak.

One of two things could happen next with this group:

• Ultimately, if they really do have a good 2010, they'll owe and pay in a lot of money in January and April of 2011.
• But if they do not have a good 2010, and if they continue to nowhere near the kind of money they were making in 2007 and 2008, the downward slide in collections from the economy's most productive people will continue into 2011.

As much as I'd like to believe the former scenario, it's hard to see it happening.

Now let's take on Crutsinger's read on the source of the annual deficit changes. The fiscal 2008 deficit was $455 billion, while the current-year deficit is on track to be roughly $1 trillion higher. Breaking that down:

• Lower receipts account for something between 40% and 50% of the difference, and certainly not "roughly one-third." Fiscal 2008 collections were $2.523 trillion (that's actually low, because in a bad accounting move about $90 billion in 2008 stimulus payments were subtracted from that, but we'll stay with Treasury's number anyway). Fiscal 2009 collections came in at $2.105 trillion, or $418 billion lower (that's 41.8% of $1 trillion). As seen above, fiscal 2010 receipts thus far are running $57 billion behind fiscal 2009. If there is no further decay in the final five months, fiscal 2010 collections will trail fiscal 2008 by $475 billion (i.e., 47.5% of $1 trillion). Further decay in year-over-year collections could cause the 2010 v. 2008 gap to be $500 billion or more (i.e., 50%).
• We can only wish that Crutsinger's claim that "another third" comes from "increased government spending that normally occurs in a downturn." It just isn't so. Food stamp and unemployment comp increases, though annoying in many ways, make up a small percentage of the Obama administration's spending increases. For example, Health and Human Services is on track to spend $164 billion in fiscal 2010 than it did in fiscal 2008. Most of that has to do with Social Security and Medicare, and very little of it has to do with the recession (which Crutsinger refers to as if it's still ongoing). Defense spending, however meritorious and of course unrelated to the recession, is heading towards a fiscal 2010 total that will be about $80 billion higher than fiscal 2008. Projected spending in smaller departments whose spending is not at all recession driven is on track for at least another $100 billion. I'm already at $344 billion, or over "another third" that has little or nothing to do with the recession. The problem is that the administration has ratcheted up spending almost across the board.
• TARP and other bailouts, as offensive as they are, make up a relatively small percentage of the total deficit change, and certainly not "a final third," especially when their total costs are spread over two fiscal years.

Crutsinger also failed to mention that the Congressional Budget Office estimated last Friday that April's deficit would be $85 billion and essentially nailed it. Why the AP's consulted economists totally blew the call, as noted earlier today (at NewsBusters; at BizzyBlog) is a mystery.

As to those 2000 and 2001 surpluses referred to earlier, the Clintonian mythology ignores the fact that the Republican Congress during that period, led by the likes of then-Congressman John Kasich, created the conditions for the late-1990s prosperity and the federal budget surpluses that eventually arrived in 2000 and 2001. In an unaccountable lapse, an unbylined May 2009 AP report (original saved here for fair use, discussion, and establishment media torture purposes) acknowledged this inconvenient fact.

Clinton's "contribution" was to overheat the economy, as his Securities and Exchange Commission allowed start-up and mostly Internet-based companies that barely had a business plan and had never earned a dime of revenue to go public as if they were the type of company suited to ordinary investors instead of wealthy, accredited ones (yes, ordinar investors also deserves a healthy slice of the blame).

Two years after the "Supply-Side Stunner," the name yours truly gave to the all-time one-month collection record of April 2008, a journalistically negligent one-year comparison window employed by the AP and Crutsinger enabled the wire service to avoid properly rendering just how awful the government's financial situation is now compared to then. As bad as it looks as AP rendered it, it's clearly much, much worse.

Cross-posted at BizzyBlog.com.

Jeanne Sahadi at CNNMoney.com has finally realized Social Security needs urgent reform - and by reform, she means going after the wealthy, of course.

On Monday, Sahadi reported on news from the Congressional Budget Office that Social Security is dipping into savings already this year and will not be able to meet its obligations by 2037. That's at least 15 years earlier than what the CBO had predicted during the last administration, and with 27 years to go it's entirely possible the deadline will move again, especially if the current recession persists.

But Sahadi wasn't worried. In fact, she began her piece by saying "it should be a snap" to rescue the program from bankruptcy.

After blissfully assuring readers that Social Security will be fine for another 27 years, Sahadi offered three easy-peasy steps that could be enacted over time to make the program solvent. Sadly, those three ideas were all too predictable:

Raise the age limit, ration benefits paid out to the rich, and remove the cap on taxable income to exact more revenue from - you guessed it - the rich.

This genius strategy was touted as the "well known" plan put forth by America's experts. Yes it sounded exactly like the plan they come up with for everything else, but they swore it would work for this. They even had a nonpartisan think tank to recommend it:

Reforming Social Security is still a hot-button issue. But relative to other measures needed to stabilize U.S. debt, it should be a snap.

"They could begin with Social Security, which oddly enough has gone from being the 'third rail of American politics' to the low-hanging fruit," wrote Robert Bixby, director of the Concord Coalition, a nonpartisan, grassroots deficit watchdog group.

Ah the good old Concord Coalition, which is so grassroots it was founded in 1992 by a bunch of beltway insiders who hobnob with presidential administrations.

On Monday, a Concord Senior Economist appeared in the Christian Science Monitor to push for a Value Added Tax on Americans - not as a reform measure to replace the current mess, but as an extra burden placed on top of everything else. A few weeks before that, Executive Director Robert Bixby insisted that "the only solution" for America's debt was a tax increase combined with less spending.

That's a sample of this "grassroots" watchdog group's typical reaction to fiscal issues.

And that was the formula offered to CNN Money as the way to save Social Security:

The menu of options for making Social Security solvent is well known.

Increasing the retirement age: One option that gets a lot of buy-in from policy experts is a slow increase in the retirement age at which one may collect full Social Security benefits. Today, it's 66, and it is scheduled to increase to 67 by 2027.

This idea initially sounded reasonable, as most people concede it will be inevitable at some point in the future. But the second suggestion got a bit dicey:

Reducing growth in benefit levels: Another measure that has gotten a lot of attention is "progressive indexing." Such a measure would not affect the promised benefits for lower income workers but would lower future benefits for middle- and high- income workers relative to what is currently promised.

Under progressive indexing, the Social Security benefits of higher-income workers would be indexed to inflation rather than to wages, as is currently the case. That would have the effect of reducing benefits from their current promised levels because inflation tends to grow more slowly than wages.

Progressive indexing is essentially the same idea as a progressive income tax: the more you earn, the less you get to keep. High income citizens would see their benefits tied to a stricter index, meaning cost of living increases would be harder to come by, while low income citizens would be given more generous raises.

Who would continue to pay for those raises? Wealthy young workers, naturally:

Raising the payroll tax: There is also the option of increasing the Social Security payroll tax rate on wages or raising the cap on how much of wages is subject to the payroll tax (currently it's the first $106,800).

So even though your benefits would be capped and subject to meager inflation increases, the amount seized from your paycheck won't have such restrictive caps. Pay more taxes, get less out of it.

Nowhere in Sahadi's entire report did she entertain conservative ideas such as privatizing any portion of Social Security. President Bush's reform plan in 2005 was completely ignored, as was Congressman Paul Ryan's (R-WI) who advanced a similar proposal in February. Readers would get the sense from Sahadi that a tax-and-ration plan is the only idea that exists.

Of course, for Sahadi to give ear to those ideas now, it would signal a major change in her reporting. Back in 2005 when Bush introduced his plan for partial privatization, Sahadi did everything she could to undermine it. First she insisted the program was not in dire trouble, and then she attacked privatization as a bad idea.

Check out Sahadi all over President Bush's reform plan on January 12, 2005:

The debate over Social Security is well under way, with President Bush Thursday giving guidelines for addressing what most acknowledge will be a shortfall in the program's funding in 40 or so years.

The president and some others support overhauling the system by partially privatizing it by giving younger workers the option of creating personal accounts and diverting some of their Social Security taxes to fund them.

But critics say the current proposals are dangerous. And some argue that it's wrong to characterize the eventual shortfall as a crisis.

CNN/Money will be covering the Social Security debate on an ongoing basis. This week, we're mapping out some of those critics' arguments.

Not only is Social Security not in crisis, it is as financially sound as ever, according to the liberal Center for Economic and Policy Research, run by Mark Weisbrot and Dean Baker, coauthors of "Social Security: The Phony Crisis."

The drumbeat continued for Sahadi on February 3 of that year, when she reported it was "not necessarily accurate" to claim the program would be bankrupt, and that President Bush "may have overstated" the scope of the problem.

In 2007, financial projections began to sour, but by then the media had succeeded in forcing President Bush to drop his reform plan. On March 15, 2007, Sahadi wrote this little gem:

With an expected swell in benefit-eligible retirees in the next 20 years, increased life expectancy, and a Social Security trust fund the government may have to go into debt to repay, actuaries and pension experts have been calling for changes to bolster the system's long-term funding. It's a debate that has been put on hold for now.

For those in their 20's, 30's and 40's, you can bank on this: whatever changes are decided, you'll either end up paying more for the benefits promised or you'll receive less of them, or, possibly, both.

How things changed in less than two years. And how convenient the debate was "put on hold" with no explanation as to who was responsible for doing that. With no retrospection into her past reporting, Sahadi flippantly told young readers that the damage was done and their futures would be bleaker.

Almost exactly one year later, on March 25, 2008, Sahadi started pressing the panic button:

Treasury Secretary Henry Paulson, saying that Social Security is "financially unsustainable," called Tuesday for quick action to keep the system strong and released a report detailing the program's funding shortfalls.

The federal government will have to start paying back what it owes the Social Security trust fund in 2017 so the program can continue paying 100% of benefits. By 2041, if the system is left unchanged, Social Security will only be able to pay out 78% of benefits promised to future retirees.

Now in 2010, that all-important tipping point is projected to happen in 2037. That's a window of 15 years that evaporated in the span of one administration.

It is encouraging that the writers at CNN Money have finally caught on to the coming fiscal disaster. But five years later, the aversion to privatization remains as strong as ever, and with Democrats in charge of Washington, that debate will be "on hold" for some time to come - which is exactly what CNN Money was behind all along.

The man who predicted the bursting of the housing bubble as well as 2008's economic collapse says that what happened in the markets around the world today is just the next stage in the financial crisis.

"The first stage was this massive re-leveraging of the private sector that led to the financial crisis and which has responded now with a massive re-leveraging of public sectors with budget deficits of the order of 10 percent," Nouriel Roubini aka Dr. Doom told CNBC's Maria Bartiromo.

"So I think that the markets are realizing that we have socialized a lot of the private losses with unsustainable fiscal deficits."

He believes the bond markets in parts of Europe seriously began realizing the depth of the problem today cautioning, "And soon enough they're going to wake up in the United States" (video follows with partial transcript and commentary):  

MARIA BARTIROMO, CNBC: Let me bring in Nouriel Roubini, he is on the telephone right now. He had a report out earlier about the implication of Greece, and really looking at the United States in terms of the debt load there and, and comparing the two. Nouriel, thank you for joining us. Give us your sense of what's behind this 3 ½ percent sell-off in the markets today.

NOURIEL ROUBINI: Well, my interpretation is that now there is a rise of sovereign risk in a number of advanced economies. There's Greece, there's Portugal, and Spain. And this is just the next stage of this financial crisis of the last few years. The first stage was this massive re-leveraging of the private sector that led to the financial crisis and which has responded now with a massive re-leveraging of public sectors with budget deficits of the order of 10 percent, and I imagine OCD expecting that public debt is going to double as a share of GDP in all advanced economies. So I think that the markets are realizing that we have socialized a lot of the private losses with unsustainable fiscal deficits. Today the bond market which (?) have woken up in Greece, in Spain, in Portugal, in U.K., in Ireland in Iceland. And soon enough they're going to wake up in the United States.

For those unfamiliar with Roubini, he has gotten the name "Dr. Doom" for his fabulous call in the middle part of the last decade when he said that housing prices were exploding in a speculative frenzy that would eventually sink the entire economy.  

As the New York Times wrote in August 2008:

On Sept. 7, 2006, Nouriel Roubini, an economics professor at New York University, stood before an audience of economists at the International Monetary Fund and announced that a crisis was brewing. In the coming months and years, he warned, the United States was likely to face a once-in-a-lifetime housing bust, an oil shock, sharply declining consumer confidence and, ultimately, a deep recession. He laid out a bleak sequence of events: homeowners defaulting on mortgages, trillions of dollars of mortgage-backed securities unraveling worldwide and the global financial system shuddering to a halt. These developments, he went on, could cripple or destroy hedge funds, investment banks and other major financial institutions like Fannie Mae and Freddie Mac. 

With this in mind, when Roubini speaks, people should listen. 

The man who predicted the bursting of the housing bubble as well as 2008's economic collapse says that what happened in the markets around the world today is just the next stage in the financial crisis.

"The first stage was this massive re-leveraging of the private sector that led to the financial crisis and which has responded now with a massive re-leveraging of public sectors with budget deficits of the order of 10 percent," Nouriel Roubini aka Dr. Doom told CNBC's Maria Bartiromo.

"So I think that the markets are realizing that we have socialized a lot of the private losses with unsustainable fiscal deficits."

He believes the bond markets in parts of Europe seriously began realizing the depth of the problem today cautioning, "And soon enough they're going to wake up in the United States" (video follows with partial transcript and commentary):  

MARIA BARTIROMO, CNBC: Let me bring in Nouriel Roubini, he is on the telephone right now. He had a report out earlier about the implication of Greece, and really looking at the United States in terms of the debt load there and, and comparing the two. Nouriel, thank you for joining us. Give us your sense of what's behind this 3 ½ percent sell-off in the markets today.

NOURIEL ROUBINI: Well, my interpretation is that now there is a rise of sovereign risk in a number of advanced economies. There's Greece, there's Portugal, and Spain. And this is just the next stage of this financial crisis of the last few years. The first stage was this massive re-leveraging of the private sector that led to the financial crisis and which has responded now with a massive re-leveraging of public sectors with budget deficits of the order of 10 percent, and I imagine OCD expecting that public debt is going to double as a share of GDP in all advanced economies. So I think that the markets are realizing that we have socialized a lot of the private losses with unsustainable fiscal deficits. Today the bond market which (?) have woken up in Greece, in Spain, in Portugal, in U.K., in Ireland in Iceland. And soon enough they're going to wake up in the United States.

For those unfamiliar with Roubini, he has gotten the name "Dr. Doom" for his fabulous call in the middle part of the last decade when he said that housing prices were exploding in a speculative frenzy that would eventually sink the entire economy.  

As the New York Times wrote in August 2008:

On Sept. 7, 2006, Nouriel Roubini, an economics professor at New York University, stood before an audience of economists at the International Monetary Fund and announced that a crisis was brewing. In the coming months and years, he warned, the United States was likely to face a once-in-a-lifetime housing bust, an oil shock, sharply declining consumer confidence and, ultimately, a deep recession. He laid out a bleak sequence of events: homeowners defaulting on mortgages, trillions of dollars of mortgage-backed securities unraveling worldwide and the global financial system shuddering to a halt. These developments, he went on, could cripple or destroy hedge funds, investment banks and other major financial institutions like Fannie Mae and Freddie Mac. 

With this in mind, when Roubini speaks, people should listen. 

The U.S. economy is on the mend and has been for some time. The reason is that, as Marx acknowledged in The Communist Manifesto, the capitalist system is an engine of powerful forces.

Market capitalism, true capitalism and not big government colluding with big business to engage in what Bastiat called “legalized plunder,” is the most efficient way of organizing resources. As a system it drives innovation, which is the source of our increased standard of living. In fact, this system is so powerful and efficient that our economy is doing well in terms of producing goods and services, not because of government intervention, but in spite of it. There is no question that the federal government has been engaged in activities that have suppressed and will continue to suppress economic growth and will leave millions of our person unemployed for lengthy periods. But the economy as a whole will be productive and our gross domestic product will continue to increase in the near future.

There is substantial empirical evidence that the economy is recovering. Fourth quarter real GDP grew at a 5.6% annual rate, the Federal Reserve Industrial Production Index was up in March for the 9th month in a row, the ISM manufacturing index was up in March to 59.6 and the employment index was at 55.1, the fourth straight month above 50, housing starts and existing home sales were up in March, the Conference Board’s Index of Leading Indicators increased 1.4% in March, and one can cite more data showing the upside of the business cycle is underway.

At issue is why is the economy recovering and is it likely to be a sustained recovery? We may also ask why unemployment remains stubbornly high while production is increasing. Normally, as the economy comes out of a recession productivity increases, part-time employment increases, and finally full-time employment increases. Why have we yet to see the last stage of this process?

The Obama administration believes that the recession is best relieved by attempts by the federal government to increase aggregate demand. This is a classic Keynesian prescription for economic downturns. Underlying this belief is the assumption that the market economy is inherently unstable, and that the economy can come to equilibrium at a point where the demand for all goods and services equals the supply of all goods services and yet the labor market is at less than full employment. The “stimulus package” fits the Keynesian theory nicely—increase federal spending and reduce tax rates on those who would spend more in order to offset the lack of demand in the economy.

The problem is that the recession is not due to a lack of aggregate demand, whatever that may actually be, but due to what Friedrich Hayek, winner of the 1974 Nobel Prize in economics, called malinvestment. Hayek subscribed to what is now called Austrian business cycle theory. This theory is that business cycles are caused by credit injections by the central bank which artificially lower interest rates. This lowered interest rate distorts the price signal for producers as to the willingness of consumers to forgo consumption today in return for goods in the future. Producers then engage in production of capital goods, such as housing, for which the demand is not sustainable. The upside of the business cycle results in overemployment in certain industries. When the credit expansion ceases, or in some cases, merely slows down, the reality of demand and supply becomes apparent. In order for labor and other resources to move to industries where the demand is sufficient to sustain employment, labor and resources must become temporarily unemployed. This is the downturn of the business cycle.

In his Nobel address, “The Pretence of Knowledge,” Hayek explained that once the central bank has set in motion the excess liquidity that distorts the price signal for savers and investors, there is little to be done other than await the market response that will result in equilibrium in the goods and labor markets. The labor and resources that have been misallocated will eventually find their proper location. Attempts by government to prop up prices and artificially stimulate demand in the sectors with malinvestment will only continue the misallocation and lengthen the time it takes for resources and labor to find those industries where consumer demand is sufficient to employ them.

The recent recession is a textbook case of Austrian business cycle theory. The Federal Reserve lowered the federal funds rate from 6.4% in December of 2000 to 1% by July of 2003 and kept the rate there for one year. Then, fearing inflation might occur, the Fed increased the rate gradually to 5.24% in July of 2006. The lowering of the interest rates created an artificial boom in housing, with the malinvestment of resources that Austrian business cycle predicts. Once the artificial interest rates were lifted, it became clear that the demand for housing was not sufficient to maintain absorb the amount of housing that had been built and sustain the employment of resources in the housing industry. Housing prices collapsed and the distortion of resources was felt throughout the economy.

A problem with ability of the market system to repair itself and create wealth for the masses is that government action which slows the recovery will be held up as having been the cause of the recovery. In the past I have suggested this is akin to the story of the man who is sitting on a park bench and every two minutes jumps up and waves his newspaper in the air. A second man, observing this for awhile, walks up and asks what the first man is doing. The first man says, “I’m scaring away the elephants.” “There are no elephants around here,” protests the second man. The first man responds, “See. It works.”

This is what is happening as our federal government engages in stimulus packages, health care reform, regulatory reform, and every other reform of which it can think. Each action actually slows down and hampers the recovery, but the economy still makes steady progress repairing itself and thus the federal action is held up as if it were the cause of the recovery.

Robert Higgs, in a 1997 paper and a book published in 2006 argued persuasively that the Great Depression was in large part due to what he termed “regime uncertainty.” The uncertainties caused by the various interventions and programs of the Roosevelt administration created a situation where private investors were afraid to invest. Higgs provides evidence of polling where a substantial number of corporate executives thought it possible that all of the economic system would be socialized.

I would argue that the failure of part time employment to be converted into full time employment in this recovery is due in large amount to the same regime uncertainty that Higgs discovered in the Roosevelt administration. The Bush administration had no explicit theory about how it would solve the financial crisis. Bear Sterns was rescued, Lehman Brothers is left to bankruptcy, Fannie Mae and Freddie Mac are taken over, AIG is bailed out. The TARP bill was originally to buy toxic assets from banks, then was used to inject capital into the banks, then it was decided that it could be used to provide loans to auto companies.

The Obama administration accelerated the pace of uncertainty with its 1000 page stimulus bill, the 2300 page health care legislation, the cap and trade tax proposal, massive financial regulatory legislation, cash for clunkers program, and first time home buyers tax credits which expire and then are reinstated. Employers don’t know what the cost of hiring a new worker will be, whether they will get a tax credit for hiring if they wait, what kind of health care benefits they will be mandated to provide, whether their customers will receive a credit for purchasing their product if they wait a month, or whether their lender will face new regulations in providing them credit. We should not be wondering why unemployment is so high, but rather why it is so low given government intervention.

Why be optimistic about the economy when the federal government has created such uncertainty, has immersed itself into the health care industry, and is about to attempt to micromanage the financial industry? For two reasons. First, as noted above, the market capitalist system is extraordinarily resilient. There are massive incentives to figure out how to make the best of a bad situation. Second, it appears that people have been awakened to the massive government intervention that is a drag on the economy. This may well result in the restoration of rule of law, individual liberty and responsibility, and limited government, which are essential to a market economy. This will require effort on the part of those dedicated to liberty and the creation of wealth for the masses through the institution of market capitalism, but the time is ripe for restoration of a free society in America and the expanding economy that will result.

In the past 20 months, liberal media members have routinely blamed 2008's financial crisis on George W. Bush, Republicans, Wall Street, and greed.

Someone that has hardly ever been accused of having a hand in what led to the tumult is former President Bill Clinton.

As NewsBusters has been reporting almost since the crash began, it was Clinton who signed into law two key bills -- the Financial Services Modernization Act of 1999 and the Commodity Futures Modernization Act of 2000 -- that ushered in the malfeasance that almost toppled the world economy.

On Saturday, a former editorial page editor for the Wall Street Journal, George Melloan, made the connection even stronger as he pointed a finger at someone most in the media have shamelessly given a pass for his involvement in this crisis (h/t @RLMcMahon):

To promote "affordable" housing, Bill Clinton had excused the two giant government-sponsored housing finance agencies, Fannie Mae and Freddie Mac, from normal banking rules, allowing them leverage ratios far in excess of the limits on ordinary lenders. Banks were forced to write risky mortgage loans, a large number of which were then folded into mortgage-backed securities that Fannie, Freddie and others sold internationally with triple-A ratings.

This business seized up, crippling banks throughout the world, when holders began to realize that the assets that backed the securities, home mortgages, were going under water at an alarming rate.

Of course, Melloan was right. As the New York Times reported in September 1999:

In a move that could help increase home ownership rates among minorities and low-income consumers, the Fannie Mae Corporation is easing the credit requirements on loans that it will purchase from banks and other lenders.

The action, which will begin as a pilot program involving 24 banks in 15 markets -- including the New York metropolitan region -- will encourage those banks to extend home mortgages to individuals whose credit is generally not good enough to qualify for conventional loans. Fannie Mae officials say they hope to make it a nationwide program by next spring.

Fannie Mae, the nation's biggest underwriter of home mortgages, has been under increasing pressure from the Clinton Administration to expand mortgage loans among low and moderate income people and felt pressure from stock holders to maintain its phenomenal growth in profits.

Wait. It got better:

These borrowers whose incomes, credit ratings and savings are not good enough to qualify for conventional loans, can only get loans from finance companies that charge much higher interest rates -- anywhere from three to four percentage points higher than conventional loans.

''Fannie Mae has expanded home ownership for millions of families in the 1990's by reducing down payment requirements,'' said Franklin D. Raines, Fannie Mae's chairman and chief executive officer. '

Ah yes. Franklin Raines, proud of reducing down payment requirements. Wasn't that a BIG part of the problem? You bet: 

In moving, even tentatively, into this new area of lending, Fannie Mae is taking on significantly more risk, which may not pose any difficulties during flush economic times. But the government-subsidized corporation may run into trouble in an economic downturn, prompting a government rescue similar to that of the savings and loan industry in the 1980's.

''From the perspective of many people, including me, this is another thrift industry growing up around us,'' said Peter Wallison a resident fellow at the American Enterprise Institute. ''If they fail, the government will have to step up and bail them out the way it stepped up and bailed out the thrift industry.'' 

So, back in September 1999, the Times was expressing concern that this move by Fannie Mae, prompted by pressure from the Clinton administration, could lead to a government rescue.  

Yet now, almost eleven years later, the media blame Bush, Republicans, Wall Street, greed, and anybody that doesn't have a "D" next to his or her name.

Fortunately, Melloan wasn't done setting the record straight: 

One of the great ironies of our times is that the two strongest defenders of the Fannie-Freddie shell game, Chris Dodd and Barney Frank, are now in charge of reforming banking regulation. 

Would this be the case if our media had been honest about the causes of the 2008 collapse when it happened?

If Dodd and Frank had "R's" next to their names, would they be at all involved in reforming banking regulation?

Maybe most importantly, how much different might the 2008 election results have been if the Obama-loving press would have told the truth about this issue before people went to the polls? 

The Pentagon rescinded the invitation of evangelist Franklin Graham to speak at its May 6 National Day of Prayer event because of complaints about his previous comments about Islam.

The Military Religious Freedom Foundation expressed its concern over Graham's involvement with the event in an April 19 letter sent to Secretary of Defense Robert Gates. MRFF's complaint about Graham, the son of Rev. Billy Graham, focused on remarks he made after 9/11 in which he called Islam "wicked" and "evil" and his lack of apology for those words.

Col. Tom Collins, an Army spokesman, told ABC News on April 22, "This Army honors all faiths and tries to inculcate our soldiers and work force with an appreciation of all faiths and his past comments just were not appropriate for this venue."

In a press release, Family Research Council president Tony Perkins called the Army's decision "further evidence that the leadership of our nation's military has been impaired by the politically correct culture being advanced by this Administration. Under this Administration's watch we are seeing the First Amendment, designed to protect the religious exercise of Americans, retooled into a sword to sever America's ties with orthodox Christianity."

Graham's comments could certainly be considered inflammatory, but it should be noted that the Obama Administration hasn't always backed away from controversial religious leaders.

An April 17 front page Washington Post article by Krissah Williams on Rev. Al Sharpton detailed how he has been an "ally" to Barack Obama since the 2008 election:

Sharpton has been among the president's chief defenders against criticism from television host Tavis Smiley that "black folks are catching hell" and that the president should do more to specifically help blacks.

"We need to try to solve our problems and not expect the president to advocate for us," Sharpton said on his radio show. "It is interesting to me that some people don't understand that to try to make the president do certain things will only benefit the right wing, who wants to get the president and us."

Williams also noted several times in the article the link between Obama cabinet officials and Sharpton, with officials speaking at his National Action Network conference and regularly appearing on his radio program.

But Sharpton is not without his own controversies, to say the very least. Earlier this spring he told Fox News "The American public overwhelmingly voted for socialism when they elected President Obama."

Last fall Sharpton played a role in blocking Rush Limbaugh's ownership bid of the NFL's St. Louis Rams, going so far as to send a letter to NFL Commissioner Roger Goodell. The letter read in part, "Rush Limbaugh has been divisive and anti-NFL on several occasions, with comments about NFL players, including Michael Vick and Donovan McNabb, and his recent statement that the NFL was beginning to look like a fight between the Crips and the Bloods without the weapons was disturbing."   

Furthermore, Sharpton, the race huckster, owes his current status to his involvement in a string of contemptible incidents in New York. In the 1987 Tawana Brawley case, he slandered an innocent man in the course of defending an infamous "race crime" hoax. He was sued and lost a judgment for $345,000, without ever retracting or apologizing for his accusation. His race demagoguery resulted in violence and deaths on more than one occasion.

Safe to say, Franklin Graham's remarks about Islam, however objectionable, didn't incite murder.

The Pentagon rescinded the invitation of evangelist Franklin Graham to speak at its May 6 National Day of Prayer event because of complaints about his previous comments about Islam.

The Military Religious Freedom Foundation expressed its concern over Graham's involvement with the event in an April 19 letter sent to Secretary of Defense Robert Gates. MRFF's complaint about Graham, the son of Rev. Billy Graham, focused on remarks he made after 9/11 in which he called Islam "wicked" and "evil" and his lack of apology for those words.

Col. Tom Collins, an Army spokesman, told ABC News on April 22, "This Army honors all faiths and tries to inculcate our soldiers and work force with an appreciation of all faiths and his past comments just were not appropriate for this venue."

In a press release, Family Research Council president Tony Perkins called the Army's decision "further evidence that the leadership of our nation's military has been impaired by the politically correct culture being advanced by this Administration. Under this Administration's watch we are seeing the First Amendment, designed to protect the religious exercise of Americans, retooled into a sword to sever America's ties with orthodox Christianity."

Graham's comments could certainly be considered inflammatory, but it should be noted that the Obama Administration hasn't always backed away from controversial religious leaders.

An April 17 front page Washington Post article by Krissah Williams on Rev. Al Sharpton detailed how he has been an "ally" to Barack Obama since the 2008 election:

Sharpton has been among the president's chief defenders against criticism from television host Tavis Smiley that "black folks are catching hell" and that the president should do more to specifically help blacks.

"We need to try to solve our problems and not expect the president to advocate for us," Sharpton said on his radio show. "It is interesting to me that some people don't understand that to try to make the president do certain things will only benefit the right wing, who wants to get the president and us."

Williams also noted several times in the article the link between Obama cabinet officials and Sharpton, with officials speaking at his National Action Network conference and regularly appearing on his radio program.

But Sharpton is not without his own controversies, to say the very least. Earlier this spring he told Fox News "The American public overwhelmingly voted for socialism when they elected President Obama."

Last fall Sharpton played a role in blocking Rush Limbaugh's ownership bid of the NFL's St. Louis Rams, going so far as to send a letter to NFL Commissioner Roger Goodell. The letter read in part, "Rush Limbaugh has been divisive and anti-NFL on several occasions, with comments about NFL players, including Michael Vick and Donovan McNabb, and his recent statement that the NFL was beginning to look like a fight between the Crips and the Bloods without the weapons was disturbing."   

Furthermore, Sharpton, the race huckster, owes his current status to his involvement in a string of contemptible incidents in New York. In the 1987 Tawana Brawley case, he slandered an innocent man in the course of defending an infamous "race crime" hoax. He was sued and lost a judgment for $345,000, without ever retracting or apologizing for his accusation. His race demagoguery resulted in violence and deaths on more than one occasion.

Safe to say, Franklin Graham's remarks about Islam, however objectionable, didn't incite murder.

This is what the welfare state looks like. The formerly great state of Illinois, having thoroughly run its budget into the ground, is considering digging an even deeper hole by raising taxes. Exactly the shot in the arm the economy needs!

Of course, public sector unions are in full-throttle support of the tax grab. (No recession for those that live off taxpayers.) On Wednesday, a phalanx of public sector employees, including SEIU, Illinois Education Association, Illinois Federation of Teachers, AFSCME, and AFL-CIO, rallied in support of the tax hike in the capital, Springfield.

This public school teacher, who was likely given the day off to attend the rally, left no doubt about her reasons for supporting the tax hike.

Yes, this woman is responsible for educating some number of your children. Her chant goes to the heart of what’s wrong with our public school system…it is designed for the adults in the system, i.e. teachers and not the children.

The task at hand is even bigger than we feared.

President Obama has extensive ties to Goldman Sachs. Yet even given record-breaking financial contributions and sketchy relationships between Goldman executives and Obama officials at the highest level, the mainstream media will not afford Obama the same scrutiny it gave to George W. Bush during the collapse of Enron.

Obama's inflation-adjusted $1,007,370.85 in contributions from Goldman employees is almost seven times as much as the $151,722.42 (also inflation-adjusted) that Bush received from Enron. Goldman was one of the chief beneficiaries of the TARP bailout package -- supported by then-Senator Obama -- and has been a force for -- not against -- Democratic financial "reform" proposals currently under Senate consideration.

Despite the extensive connections between President Obama and Goldman Sachs, the same media that vaguely alleged unseemly connections between the Bush administration and Enron after its 2001 collapse have barely noticed the Obama administration's prominent ties to Goldman (h/t J.P. Freire).

The New York Times made sure to note in January 2002 (according to a Nexis search) that "President Bush is seeking to play down his relationship with Enron's embattled chairman, Kenneth L. Lay. But their ties are broad and deep and go back many years, and the relationship has been beneficial to both."

Yet the Times has not reported on the extensive ties between President Obama and Goldman Sachs since the SEC filed charges on Friday.

Time reported on "Bush's Enron Problem." Newsweek played up personal relationships between Bush and Enron executives. "Bush urged to be open about Enron," read a Chicago Tribune headline. Salon commented on "Dick Cheney's Bonehead Enron Play." And the Fort-Worth Star-Telegram pondered "Six degrees of Enron Ties between the company and the Bush White House."

But what of the extensive ties between the Obama administration and Goldman Sachs? Why have major media outlets not given the President the same skeptical coverage they afforded his predecessor?

To its credit, the Washington Post did note Goldman's massive campaign contributions to Obama. But it did so in the context of asserting Obama's "transformation in relations" with Wall Street, as evinced by the financial reform package currently in the Senate.

The Post and many others in the media seem to be ignoring Goldman Sachs's advocacy of the reform being proposed. A recent letter (PDF) to the company's shareholders from its President and its CEO reveals that it actually favored regulations that would be put in place by the Senate bill.

But if personal connections are what concern the mainstream media -- WaPo reported in 2002 that "Enron's Influence Reached Deep Into Administration; Ties Touched Personnel and Policies" -- they need look no further than Obama's chief of staff and top cabinet officials.

The Washington Examiner's Tim Carney reported mere weeks after Obama was elected that Emanuel would be Goldman's "most valuable asset yet" in its quest to leverage government power to its advantage.

Emanuel, Carney reported, was hired as Bill Clinton's chief fundraiser in the 1992 campaign.

At the same time, however, Emanuel was on the payroll of Goldman Sachs, receiving $3,000 per month from the firm to “introduce us to people,” in the words of one Goldman partner at the time. This is certainly a noteworthy relationship, but it’s one that has almost entirely escaped scrutiny.

Corporations and partnerships are and were at the time prohibited by law from contributing to federal candidates out of the corporate coffers. So, while Rahm tapped Goldman employees personally for six figures in gifts to Clinton’s candidacy—more than any other firm—Goldman, as a company, was helping keep Clinton’s top fundraiser well-fed...

So, Goldman may have been funneling money to Clinton’s campaign through the back door (Emanuel’s retainer and those discounts the FEC noted), and the front door. By March of 1992, the heart of that dramatic primary season, Goldman partners had sent $54,000 to the Clinton campaign.

They would contribute another $50,000, making the firm the top source of funds for Clinton’s election, and contemporaneous media credit Emanuel, together with Robert Rubin, with this tight relationship.

Obama's Treasury Secretary Tim Geithner also enjoys a cozy relationship with the most prominent investment banks, including Goldman. The Associated Press reported in October of last year,

Even during his most frenzied days, when Congress is demanding answers or the president is calling, Treasury Secretary Timothy Geithner makes time to talk to a select group of powerful Wall Street bankers.

They are a small cadre of businessmen who have known and worked with Geithner for years, whose multibillion-dollar companies all survived the economic crisis with help from U.S. taxpayers.

When they call, Geithner answers...

The calendars, obtained by the AP under the Freedom of Information Act, offer a behind-the-scenes glimpse at the continued influence of three companies -- Citigroup Inc., JPMorgan Chase & Co. and Goldman Sachs Group Inc. -- whose executives can reach the nation's most powerful economic official on the phone, sometimes several times a day.

So Obama's chief of staff and Treasury Secretary have extensive connections to Goldman Sachs. Why has this not received the attention that Bush's connections to Enron did?

Well, that should be obvious by now.

On the surface, it's one of the Associated Press's better dispatches from the real world on the state of the economy as people are experiencing it.

Datelined in Twinsburg, Ohio, Megan Barr's Monday morning report, "Recession is ending? Some Americans don't buy it," does a good job of mixing macro and micro elements, painting a picture of a struggling town, a non-improving state economy (now eighth-worst, according to AP's "economic stress" measurement tool), a somewhat-improving national picture, and a pervasive belief on the part of most Americans that things aren't really getting better. I couldn't help but notice the irony that AP reporter Jeannine Aversa, who wrote that the top economic story of last year was the economy's "fall - and rebound," contributed to Barr's report.

But something was done to Twinsburg a year ago that goes a long way towards explaining why many people there are likely responding as one quoted resident did -- "Who are they trying to kid?" -- when asked for a reaction as to whether the economy is getting better. The AP didn't cover that story last year -- and should have -- so it didn't know that it should have referred it this year.

Shortly after noon on Thursday, April 30, 2009, the President of the United States told the nation that a Chrysler Corporation bankruptcy "will not disrupt the lives of the people who work at Chrysler or the communities that depend on it." Shortly before that, senior Obama administration officials had made statements mirroring what the President said to Northeastern Ohio union leaders, politicians, and even a United States senator.

Late the next day (i.e., Friday), Detroit reporters digging through voluminous Chrysler bankruptcy documents learned that the company would close plants in four states. One of the plant's closed was Twinsburg's stamping facility, which employed 1,250. Nice timing: Tell a fib on a Thursday, make people look for it and not find it until late on a Friday, by which time few are paying attention.

As I noted at the time (at NewsBusters; at BizzyBlog), this monumental deception (not just the closures, but the accompanying deception) received the type of coverage it deserved in only one major newspaper, the Cleveland Plain Dealer ("Chrysler, Obama take the truth about plant closings for a spin").

The AP was among the establishment news organizations that ignored the deception when it was uncovered. With no record of what actually transpired in any of its prior reports, no one at the wire service would have even thought to go back to a year-ago event to get background for the Monday recession story.

I trust that readers are beginning to see how media malfeasance builds on itself.

The bottom line is that Obama lied, and jobs died. The people of Twinsburg know that. The rest of the nation should. The self-described "Essential Global News Network" deserves a major share of the blame for why it doesn't.

Cross-posted at BizzyBlog.com.

On the surface, it's one of the Associated Press's better dispatches from the real world on the state of the economy as people are experiencing it.

Datelined in Twinsburg, Ohio, Megan Barr's Monday morning report, "Recession is ending? Some Americans don't buy it," does a good job of mixing macro and micro elements, painting a picture of a struggling town, a non-improving state economy (now eighth-worst, according to AP's "economic stress" measurement tool), a somewhat-improving national picture, and a pervasive belief on the part of most Americans that things aren't really getting better. I couldn't help but notice the irony that AP reporter Jeannine Aversa, who wrote that the top economic story of last year was the economy's "fall - and rebound," contributed to Barr's report.

But something was done to Twinsburg a year ago that goes a long way towards explaining why many people there are likely responding as one quoted resident did -- "Who are they trying to kid?" -- when asked for a reaction as to whether the economy is getting better. The AP didn't cover that story last year -- and should have -- so it didn't know that it should have referred it this year.

Shortly after noon on Thursday, April 30, 2009, the President of the United States told the nation that a Chrysler Corporation bankruptcy "will not disrupt the lives of the people who work at Chrysler or the communities that depend on it." Shortly before that, senior Obama administration officials had made statements mirroring what the President said to Northeastern Ohio union leaders, politicians, and even a United States senator.

Late the next day (i.e., Friday), Detroit reporters digging through voluminous Chrysler bankruptcy documents learned that the company would close plants in four states. One of the plant's closed was Twinsburg's stamping facility, which employed 1,250. Nice timing: Tell a fib on a Thursday, make people look for it and not find it until late on a Friday, by which time few are paying attention.

As I noted at the time (at NewsBusters; at BizzyBlog), this monumental deception (not just the closures, but the accompanying deception) received the type of coverage it deserved in only one major newspaper, the Cleveland Plain Dealer ("Chrysler, Obama take the truth about plant closings for a spin").

The AP was among the establishment news organizations that ignored the deception when it was uncovered. With no record of what actually transpired in any of its prior reports, no one at the wire service would have even thought to go back to a year-ago event to get background for the Monday recession story.

I trust that readers are beginning to see how media malfeasance builds on itself.

The bottom line is that Obama lied, and jobs died. The people of Twinsburg know that. The rest of the nation should. The self-described "Essential Global News Network" deserves a major share of the blame for why it doesn't.

Cross-posted at BizzyBlog.com.

The media is still having trouble understanding the Tea Party movement and what it is protesting, even though its roots are clear. 

On Feb. 19, 2009 during CNBC's "Squawk Box," Rick Santelli made his famous rant heard around the world, calling for a so-called tea party-style revolt. And that helped fuel the growth of a Tea Party movement that has resulted in more than 600 protests this April 15, 2010.

Santelli's call for protest wasn't about high taxes. Instead, it was a cry against the Obama administration's plan for a taxpayer-funded mortgage bailout. The very beginning of the tea parties was about bailouts and the growth of government.

But the Associated Press still seemed to miss the point about worries over an overspending government in an April 15 article by Calvin Woodward about the Tea Party rallies. In that report, Woodward defended Obama's tax policies.

"Lost in the rhetoric was that taxes have gone down under Obama," Woodward wrote. "Congress has cut individuals' federal taxes for this year by about $173 billion, leaving Americans with a lighter load despite nearly $29 billion in increases by states. Obama plans to increase taxes on the wealthy to help pay for his health care overhaul and other programs."

Although taxes haven't increased, yet - projections have them going up with the increases in entitlement spending. And as CNBC's Rick Santelli explained on an April 15 mid-day special report "Taxing America" hosted by CNBC's Bill Griffeth, the growth of federal government is the real source of frustration.

"No, but I think it's the other side of the coin and I think your great special here underscores - you're spending time with your experts talking about the taxation side and how to potentially modify that," Santelli said. "The Tea Party crowd seems to want to spend more time talking about spending, and hence the size of the government and the size of the programs, and what type of return we're getting for our money. So, I think that's the other side of the coin. Spending has to be paired up with anything that is associated with getting in taxpayers' pockets. And I think that's the key."

Griffeth asked Santelli what he would do about the current deficit, which seems to be generating a lot of the frustration of Tea Partiers. According to the CNBC CME Group floor reporter, it's going to take some "tough" decisions. Those will require leadership and "may have to" require higher taxes eventually, but other things need to be done first.

"No, you know what, before I would do anything on taxes, the first thing I think we need is a balanced budget amendment," Santelli said. "And, we need to tackle things like pay-go where you can't skirt the issue. If you want to spend you have to come up with a way to pay for it. And I think some of the programs on the books are going to warrant more taxes because we can't grow our way out."

He explained that often policy experts think economic growth can help the government find its way out debt and deficits. However, the more unfunded liabilities - the tougher it will be for the economy to grow.

"But as one guest said, it is the growing out that is truly the jewel when you are running in the red," Santelli continued. "And many of the current programs to find more money are just going to put us that much farther behind the 8-ball. And under-funded pensions is a big key because you're going to have to renegotiate a lot of these programs, and that is going to be super difficult.

Whenever you are bored or in need of a good laugh, help yourself to some mainstream media coverage of the economy under President Obama.

Each month we at NewsBusters wonder how the recession will be spun anew, and each month news outlets act with increasing hilarity.

First up for April was an earnest little piece by USA Today writer Matt Krantz published Thursday. Krantz insisted on reporting "optimism" and "confidence" in the economy thanks to a phantom supply of "new jobs."

Just one little problem, though: Thursday happened to be the same day the Department of Labor announced a surge in unemployment claims that hampered the stock market.

But no matter to Krantz. You see, Krantz wasn't talking about new jobs that actually existed - he was celebrating an announcement from two companies that they would be strong enough to hire a few people sometime in the future.

Krantz began with the headline "New Jobs Fan Rising Economic Optimism" and then waited five paragraphs to explain where those jobs were (emphasis mine, h/t NB reader Kara Kittle):

A hint of good news on one of the biggest question marks hanging over the economy - jobs - added to Wall Street's growing confidence Wednesday that the recovery is firmly on track.

The Dow Jones industrial average notched its third consecutive close above 11,000, rising 104 points to 11,123 as stocks climbed further into territory last seen before the financial crisis.

Wednesday's rally came despite Federal Reserve Chairman Ben Bernanke saying the recovery remains moderate. Economic reports were mixed.

The initial spark for the advance came as JPMorgan Chase and Intel reported earnings that topped expectations as Wall Street heads into the thick of the first-quarter earnings season.

The earnings themselves were enough to fan optimism. JPMorgan's profit rose 57% to $3.3 billion and Intel's rose 288% to $2.4 billion. The two industry bellwethers said they were going to add jobs - 9,000 for bank JPMorgan and 1,000 for chipmaker Intel. Granted, those numbers are small in the context of the millions of Americans out of work. Nonetheless, even a whiff of rare good employment news was enough to bolster Wall Street's increasingly optimistic mood. "The one thing that's been missing are the jobs," says Jim Paulsen of Wells Capital Management.

A promise of 10,000 jobs is indeed good news. But how serious of a promise is it, and when will it come to fruition? This NBer had to use a bit of elbow grease to find the answer, but eventually this dispatch from CNN Money provided a clue:

The company also reiterated that it planned on adding 9,000 jobs in the U.S. across a number of different areas, including its private and retail banking businesses, hinting that it is priming itself for growth. The firm however, did not provide a time frame as to when those workers would be hired.

JPMorgan's latest results extend the good fortune the firm has enjoyed throughout the crisis. Unlike many of its peers, the bank has managed to stay profitable over the past two years.

So basically, a company that's been turning a profit all along made a vague promise to hire people on some unknown future date - and USA Today was already pouring champagne.

While USA Today was busy talking about "Wall Street's increasingly optimistic mood," some outlets were more sober. The Christian Science Monitor warned that "the real economy" did not seem to reflect the stubbornly upbeat forecasts coming from experts. The Associated Press also admitted that "jobs are still hard to come by" no matter how many pundits say otherwise.

For those of you asking yourself the obvious question..no, USA Today did not celebrate such mediocrity under President Bush.

Back in the dark days of 2006 when unemployment was horrifically hovering at 5%, USA Today told its readers not to be fooled by silly things like profit:

"The public mood is very apprehensive," says Jim Owens, CEO of Caterpillar, noting that though spending is healthy, people are carrying high debt and are worried about oil prices, international strife and other factors.

"Business executives are looking at some pretty strong profits, strong global (economic) growth," says Owens, whose company posted robust earnings in the second quarter. "We're in a world today of relatively low inflation, relatively low interest rates for this stage of the business cycle" and pent-up demand for capital investment, which yields a strong outlook.

Why the wide range of views? One reason is the inherent difficulty in forecasting at turning points in the economy. More narrowly, the differences hinge on how economists, executives and consumers gauge key economic factors: the depth and breadth of the housing decline, the outlook for oil prices, the pace of economic growth abroad and whether inflation has spread beyond energy prices.

How strange none of that stuff made it into the paper's coverage in 2010. Do people somehow not have as much debt now? Is expensive oil somehow not a threat anymore? Are global affairs somehow less worrisome? And what about "the inherent difficulty" of reading economic tea leaves - did all of those conflicting factors somehow disappear?

In less than four years, the media's treatment of hard news has changed that much. In 2006, "strong profits" and "robust earnings" were not enough to overcome fear of international politics. In 2010, two profitable companies promise to hire a few thousand people, and that's more important than an unexpected rise in unemployment.

Perhaps part of the reason for such cheerful reporting is how the Obama administration spins the news when talking to journalists. Instead of just accepting bad news as being what it is, government officials fed some very strange excuses to the media this week.

The Wall Street Journal passed on a sample of this Thursday:

In the U.S., investors were disappointed Thursday morning after the Labor Department said in its weekly report that initial claims for jobless benefits rose by 24,000 to 484,000 in the week ended April 10, marking the second-straight week of increases in initial claims. Economists surveyed by Dow Jones Newswires had expected a drop of 15,000.

However, a Labor Department economist said this latest rise can be pegged to lag effects from the spring holidays, including Easter and Cesar Chavez Day, which is celebrated in worker-heavy California.

You read that correctly: the state of California observed March 31 as a holiday to honor union activist Cesar Chavez, and the federal government blamed it for a nationwide slump two weeks later.

Oh, and Easter caused a lag effect too - except for the fact that, just a few days ago, the media were hyping good retail sales during Easter weekend.

So one of the busiest shopping days of spring helped several stores beat estimates, and then this mysteriously caused people to be unemployed a week later.

Back in March when the Obama administration blamed job losses on a snow storm, many of us thought they'd scraped the bottom of the barrel. But now we see that barrel goes a lot further down.

Up next: blaming the recession on a miserly tooth fairy that won't leave enough money under the pillow.

Go ahead and laugh about it now: you'll likely cry when you see USA Today actually fall for it.

NBC host Norah O'Donnell is taking it from all angles for pulling the race card on Newt Gingrich last Friday.

Speaking at the Southern Republican Leadership Conference, Gingrich said "shooting three-point shots may be clever, but it doesn’t put anybody to work,” referring to President Obama's basketball skills. Norah O'Donnell embarrassed herself Friday by claiming the comment had racial undertones.

Since then, commentators on the left and right have criticized O'Donnell's race-baiting. Bill O'Reilly and Juan Williams have both condemned her remark, and Gingrich himself has repudiated the accusation.

"The left is becoming a parody of itself," Gingrich said Tuesday morning. He added that "it's relatively hard to go from 'we need someone who is a good president more than we need three point shots' to" racism.

(h/t to Mediaite for the video.)

O'Reilly blasted O'Donnell on his Monday evening "Talking Points Memo" segment. He said that the racism charge "is destructive to the country. There are enough legitimate issues to debate without degenerating into personal attacks, especially where racism is invoked."

During the same episode of the "Factor," O'Reilly asked Juan Williams, an African American contributor to NPR and the Washington Post, about O'Donnell's comment. Williams let loose:

Here is the serious point, Bill. This is an example by Norah O'Donnell of crying wolf. And when do you that with regard to race, then people who come along with serious racial concerns about racial inequities in this society that still exist, they can't have a conversation. Suddenly you say "no you are always talking about race. We are sick of race. We don't want to hear about race." That's what happens when you use it cheaply.

And the second thing to say is, guess what? There are lots of people in the black community who think President Obama should be doing more about the high rate of unemployment in the black community. That's -- so for him, for them to say "oh, he is shooting baskets, instead of paying attention to the economy," you might get the same criticism from several people out of several people the black community today who want him to do more to address high rates of unemployment.

In other words, Gingrich's point is completely valid, and O'Donnell needs to put away the race card. Please.

O'Reilly, for his part, also noted that he has become wary of even covering events revolving around black people or the black community. He told Williams,

In a serious vein -- and we talked about this with the infamous Sylvia’s deal a few years ago -- I, and many other white journalists, now don’t do nearly as many reports on African Americans or their problems because we don’t want to be put in a situation where our opinion is taken out of contest, rammed down our throat as Media Matters and all these other sleazeoids do. If it’s a big thing or optional thing, I’m not doing it anymore.

O'Donnell's accusations cheapen the political discourse not only by distilling meaningful objections down to base bigotry, but by discouraging discourse in the first place.

After the Dow Jones Industrial Average (DJIA) cracked the 11,000 mark on April 12, some are asking if the economy is back. And while some want to credit President Barack Obama for this so-called recovery, is this financial market rally a true indicator of returning economic prosperity? 

The anchor of "NBC Nightly News" asked just that question, pointing out the cover of the April 19 issue of Newsweek magazine that pronounced "America's Back!" On his April 12 broadcast, Brian Williams asked CNBC's David Faber if it was a little premature to make that declaration.

"I'm looking at the copy of Newsweek magazine out today," Williams said. "It says America's back and we have this classic disconnect. We hear numbers out of Wall Street. We see covers of magazines like that. People watching at home, millions of people in the grips of unemployment and poor financial times wondering when they're going to start feeling some of this."

The story the Newsweek cover is advertising is by Daniel Gross. To be fair, the article doesn't really claim that we've recovered from the current economic malaise. However, it points out that the U.S. economy throughout history has been cyclical and, despite the naysayers, has always come back. But as for a short-term prognosis, Faber doesn't see America quite "back" just yet, as unemployment remains high.

"And that's the key question for this economy," Faber replied. "Far be it for me to seem unpatriotic, but one has to wonder in some ways. Economic growth from here is going to be dependent in part on the U.S. consumer. Seventy percent of our economy is consumer spending. Unemployment still remains very, very high."

Faber explained that disconnect with the stock market and the general economy is that these corporations have discovered how to become more productive and that has led to a reduction of operating cost, which has translated to a higher stock price.

"We're going to hear a lot from corporate America in the next few weeks about how much money corporations made, because they have done well," Faber continued. "That's why the stock market has been up. But they've done well in part because of productivity gains. They fired a lot of people in 2008 and 2009. They found they can do more with less. The question will be when those corporations actually get back to hiring."

A little over a year ago, President Obama signed into law the $787-billion stimulus legislation that was supposed to prevent the unemployment rate from exceeding 8 percent. And although the unemployment has receded some from its high, it's still well North of 9 percent. So if that stimulus is given more time, will unemployment improve?

Last week's jobless claims numbers, showing a stagnant unemployment rate of 9.7 percent, didn't provide any reason for optimism. And on CNBC's April 12 "Squawk Box," host Joe Kernen asked CNBC CME Group floor reporter Rick Santelli if this economic indicator is going to be stubborn number, which would confirm a failure of Obamanomics.

"Rick, I wasn't here last week when that claims number came out. But if I could really just dig deep down into your view, do you think a year from now we're still going to be talking about a stubborn unemployment rate, Rick?" Kernen asked.

Santelli cited an op-ed in the April 12 Wall Street Journal by liberal economist and former Clinton Labor Secretary Robert Reich, who wrote "many outsourced jobs will never return, and median income will likely continue to fall as it during the last so-called recovery." Santelli explained modest economic growth will now be seen as a very positive sign.

"Years from now, way more than just one year in my opinion," Santelli said. "I think that The Wall Street Journal article today kind of touches what I and many believe and that is a lot of the jobs lost aren't coming back and a lot of the unemployment has to do with things like education and skills that aren't fixed overnight. And when you talk about interest rates, listen, I'm going to keep it simple. You asked me where I thought it would be. I think it's a two-tier issue. I'm assuming the economy is going to be mediocre for many years, three to five, meaning 2 percent to 3 percent growth is going to be good. If it gets better than that, I think interest rates will rush up much more aggressively in 2011."

According to Santelli, another problem confronting the stagnant economy is the threat of inflation and thus higher interest rates, which is traditionally seen as an impediment to economic growth.

"Which the supply will put rates up," Santelli replied. "If you want to throw in things like money supply actually coming off the banks' balance sheets where you really can get true textbook type inflation or you want to talk about the type of economic activity traditionally associated with higher rates, those are all ups and extras."

Pop quiz: how do you cut taxes on low and middle-income wage earners and end up with a greater percentage of people paying taxes?

Such is a question the folks at the Associated Press should be asking themselves concerning a piece the wire service published Wednesday entitled "Nearly Half of US Households Escape Fed Income Tax: Recession, new tax credits have nearly half of US households paying no federal income tax."

In the same paragraph, author Stephen Ohlemacher predictably bashed former President George W. Bush's tax cuts that were "generous to wealthy taxpayers" while he applauded "tax cuts for low- and middle-income families, which were expanded when Obama signed the massive economic recovery package last year."

There's only one problem with this premise - the net result was that a higher percentage of people paid federal income taxes in Obama's first year in office than in Bush's last:

About 47 percent will pay no federal income taxes at all for 2009. Either their incomes were too low, or they qualified for enough credits, deductions and exemptions to eliminate their liability. That's according to projections by the Tax Policy Center, a Washington research organization. 

That was paragraph two. Here are paragraphs fourteen and fifteen:

In 2007, about 38 percent of households paid no federal income tax, a figure that jumped to 49 percent in 2008, according to estimates by the Tax Policy Center. 

In 2008, President George W. Bush signed a law providing most families with rebate checks of $300 to $1,200. Last year, Obama signed the economic recovery law that expanded some tax credits and created others. Most targeted low- and middle-income families. 

So, after Obama's marvelous "tax cuts for low- and middle-income families, which were expanded when Obama signed the massive economic recovery package last year," 53 percent of Americans paid federal income taxes.

But in Bush's last year in office, having enacted tax cuts "in the past decade" that 'have been generous to wealthy taxpayers," 51 percent of people paid federal income taxes.

That means, Mr. Ohlemacher, that more people paid federal income taxes AFTER Obama expanded "tax cuts for low- and middle-income families."

For some reason, Ohlemacher didn't specifically address this fact OR explain to readers how more people could have ended up paying taxes after "Obama signed the economic recovery law that expanded some tax credits and created others" that mostly "targeted low- and middle-income families." 

I guess tax cuts that are supposedly "generous to wealthy taxpayers" are bad even if they result in few people paying taxes, and tax cuts for low- and middle-income families are good even if they result in more people paying taxes.

Any questions? 

Is it possible to be so wrapped up in a media culture that one could minimize a sacred religious holiday in a shoddy attempt to write a clever headline? Mediaite's Tommy Christopher and his editors seemed to have pulled this feat off.

Christopher, who has had a much-publicized run-in with Andrew Breitbart, has a new hero, former American Enterprise Institute scholar David Frum. Christopher elevated Frum to messianic status in a Good Friday April 2 post headlined "Did David Frum ‘Die' For GOP's Sins?" specifically praising the former AEI scholar for his appearance on Comedy Central's April 1 "The Colbert Report."

According to Christopher, Frum still wants to be a conservative and hasn't converted to the liberal ideology, like others have before him. He argued that lends credence to Frum, who is more known for levying criticisms about conservatives and Republicans, and not his conservative world view. (As if being popular with the liberal blogosphere was a badge of honor.)

"See, he still wants to be a conservative," Christopher wrote. "That really cuts down on his job prospects. If he was a true apostate, he'd be the toast of the liberal blogosphere, telling appreciative millions how he's seen the light."

Christopher took it a step further and opined that "Colbert Report" host Stephen Colbert was right when he said the Republican Party was like a "cult" for opposing ObamaCare so fervently.

"Colbert hits the nail on the head when he compares the GOP to a cult," Christopher added. "The 2008 election, and the health care debate after, saw the Republicans increasingly whipping up and harnessing the energy of that fringe that Frum spoke of. The big difference now, though, is that it is the cult's followers who are offering the Kool Aid, and the cult's leaders who must now drink."

Christopher, who has determined to take the role of economist (and didn't get what unemployment numbers released April 2 really could mean), hedged his bet that unemployment numbers will improve and the GOP could possibly be forced to eat their words and embrace the likes of Frum.

"Still, these are unique times," Christopher wrote. "With the GOP pursuing its promise to run on repealing health care reform, and with today's encouraging job numbers, Frum and I could look like geniuses come November. That'll be good for me, but what it does for Frum is anyone's guess. If November goes badly enough, maybe the Republicans wake up and start listening to voices like Frum's."

Christopher's employer, Mediaite, which has a home page that at first glance appears to be a sounding board for media critics against all things conservative, was founded by Dan Abrams, a former MSNBC host and the Chief Legal analyst for NBC News. According to Mediaite, the Web site had a record-breaking month of March, as it attempts to establish a foothold in the blogosphere.

Sometimes, certain claims made by establishment media reporters or people who are quoted don't pass the smell test. Then, when you dig in, to borrow a phrase from Michael Savage, the stench makes you clench.

Such is the case with a front-page story ("Number of People Living on New York Streets Soars") that went up online at the New York Times late Friday, and appeared in its Saturday print edition.

Reporter Julie Bosman opened fairly enough with this paragraph:

The Bloomberg administration said Friday that the number of people living on New York’s streets and subways soared 34 percent in a year, signaling a setback in one of the city’s most intractable problems.

The New York City Department of Homeless Services’ Homeless Outreach Population Estimate (HOME) is conducted in late January each year. It’s almost as if Bosman and/or her editors thought that this opening statement was too strong and needed some seasoning; after all, you-know-who’s administration in Washington was overseeing the economy during the entire period in question.

So take a look at how Bosman, with the help of a “clever” homeless services official, tried to massage the results in the next five paragraphs, and then be amazed at how reality differs:

Appearing both startled and dismayed by the sharp increase, a year after a significant drop, administration officials attributed it to the recession, noting that city shelters for families and single adults had been inundated.

Robert V. Hess, the commissioner of homeless services, said in a subdued news conference that the city began feeling the increase in its vast shelter system more than two years ago. “And now we’re seeing the devastating effect of this unprecedented poor economy on our streets as well,” Mr. Hess said.

The city’s annual tally indicated an additional 783 homeless people on the streets and in the subway system, for a total of 3,111, up from 2,328 last year. That is in addition to almost 38,000 people living in shelters, which is near the city’s high.

The count came from an annual census of homeless people that is typically conducted on a cold January night, when more than 2,500 volunteers walk the streets and subway system between midnight and 4 a.m. to search for and identify the homeless. It took place this year on Jan. 25.

Bosman described this year's on-the-streets homeless population increase of 783, or 34% as "sharp." Guess what the decrease from January 2008 to January 2009 described only as "significant" was? Try almost 1,000 (graph is at the fourth slide of the January 2010 HOME report, a PDF accessible at this "Statistics and Reports" page):

What's more, from January 2005 to January 2009, the final four years of the eeeeevil George Bush, the on-the-streets homeless count dropped by 47%.

Hess's ignorant (or deliberate?) "pin the blame on the recession; I can just feel it" argument is beyond pathetic, and Bosman did readers a disservice by including it. While she did get around to noting 2008's 30% drop in her second-last paragraph, she never told us how many people (978) that represented, or that it was a bigger drop than 2009's gain.

Not that it constitutes any kind of proof, but it's more than a little interesting that the "on the streets" homeless population in Gotham plunged so steeply in 2008, when we were supposedly in a recession during the entire year (the recession as normal people define it didn't start until the third quarter of 2008).

Cross-posted at BizzyBlog.com.

While a vote on health care reform legislation appears to be imminent, should it pass it could have broader economic implications, even if the bill itself won't take effect for some time.

As CNBC "Mad Money" host Jim Cramer predicted - if it passes, get ready to see a sell-off on Wall Street. Cramer appeared on CNBC's March 18 "The Kudlow Report," with his former broadcast partner Larry Kudlow. Kudlow asked Cramer to elaborate on his theory ObamaCare could send the financial markets reeling or "topple the stock market," as Kudlow described it.

"First, it is the single biggest impediment to the stock market going higher," Cramer said. "And a lot of this has to do with what's not being talked about enough with how it's going to be paid and also about what it will do to small business formation. This bill is a disaster for both."

Cramer said the uncertainty this health care bill present to entrepreneurs is an obstacle, but he also explained the anticipated higher taxes that will finance this legislation are going to be another barrier for higher stock prices.

"You're either going to have health care premiums go up dramatically, which is just terrible, particularly if you and I wanted to start a business," Cramer said. "We would have no idea how much it would cost. But the last thing we want to do is start it. Probably stay at our old job. Yet you and I know that small businesses are the secret. That's how we get employment in this country. Or we have dramatically higher taxes. And it looks like -- people won't even realize it when it hits them - but you and I fought very hard for a very long time to reduce taxes and I think we played a role. Reduce taxes on capital gains, reduce taxes on dividends."

And with higher taxes, Cramer explained the appetite for risk won't be there for investment in the economy.

"At a time when the investor is just completely flummoxed, doesn't know what to do - I think it's going to lead to big selling in the second half of the year, when people say, ‘Jeez, all the reasons, the favorable tax treatment that made us risk owning stocks - going away.' Very bad for the stock market."

But that's just the tip of the iceberg Cramer said.  If health care passes, Obama will make a push at amnesty for illegal immigrants - that in turn will be covered by this health care legislation at a cost to every one else.

"I think this is a two-step process," Cramer said. "The first step is this health care - which they scored it as not being that bad for taxes. You and I think that's a little disingenuous. But what will happen next, I think Obama will be emboldened as he would be - a big victory. So the next thing is a push for amnesty for people who have immigrated to the country not legally. And I think that's where you're really going to get the step in the function up in the cost of this. I wish that we would - the debate in Congress dealt more with this because what would really break the back of Treasury is a whole group of people who we never thought we'd be covering who we will be covering."

The "Mad Money" host suggested these impediments will constrict the American entrepreneurial spirit.

"This is where I think, again, if you're going to try to get employment down - which I think you and I both know is the secret to the growth of this country and the secret to restoring our country's greatness, frankly - you can't have impediments put in that are certainly going to counteract any of these little job bills that Congress is passing. I think the single biggest impediment is before I hire an employee it's going to cost me $12,000. I better stay at my old job. I better not start a new job. And yet America is based on people taking those risks and starting new jobs." 

Cramer has rumbled with the White House before, criticizing the Obama administration's "lurch toward populism." In March 2009, Cramer drew the ire of the White House with a "Today" appearance. Asked by Matt Lauer whether or not Obama's policies are "shareholder friendly," Cramer declared, "This is the most, greatest wealth destruction I've seen by a president" As a result, Press Secretary Robert Gibbs called out Cramer in a press conference.

The liberal media's favorite targets - Wall Street "fat cats" - have endured a firestorm of outrage and attack over bonuses since the financial meltdown. As some, like CNBC contributor Rick Santelli pointed out however, part of the screaming is the result of it is Obama and the White House whipping up political outrage. 

Now we'll have a chance to see if it's also selective outrage.

Fox Business anchor Eric Bolling uncovered embarrassing and questionable bonuses being received by those charged with keeping an eye on banks - government regulators. But who watches the watchers?  

Bolling told FNC's "Happening Now" that even as the economy has struggled, the government was handing out millions of dollars in bonuses to workers - and not even for a job well done.    

"You should be really ticked off if you're mad at Wall Street fat-cats," Bolling said. "Barack Obama tells us we should be worrying about them. How about in their own administration - they're rewarding people in the FDIC, the Office of Thrift Supervision (OTS), and in the other offices that are charged with keeping an eye on the banks."

Bolling noted that, under the watchful eye of the regulators, nearly two hundred banks failed since the financial meltdown. But through the Freedom of Information Act, Fox Business and company discovered that that didn't stop government officials (such as the presidential-appointed Comptroller) from giving each other green hand-shakes and pats on the back:

"The problem is when the FDIC was under scrutiny, and the OTS was under scrutiny, they found that they weren't performing and that's a lot of the reason why some of these banks failed is because they weren't holding these banks to high enough standards," Boolling said. "So these banks fail - they look bad. Things start to get better in the economy, banks start to turn around - they start giving each other bonuses."

Bolling highlighted one example where an official received bonuses equaling nearly one-quarter the salary:

"In one instance, one of the regulators made $179,000 salary - and $41,000 in bonus. This is just crazy. If you're mad at Wall Street, take a look at some of these regulators."   

So will these "fat cat" regulators be subject to the scorn of the media and the president? Don't count on it. More likely, they'll join Fannie Mae and Freddie Mac on the list of liberal approved protected entities.

The liberal media's favorite targets - Wall Street "fat cats" - have endured a firestorm of outrage and attack over bonuses since the financial meltdown. As some, like CNBC contributor Rick Santelli pointed out however, part of the screaming is the result of it is Obama and the White House whipping up political outrage. 

Now we'll have a chance to see if it's also selective outrage.

Fox Business anchor Eric Bolling uncovered embarrassing and questionable bonuses being received by those charged with keeping an eye on banks - government regulators. But who watches the watchers?  

Bolling told FNC's "Happening Now" that even as the economy has struggled, the government was handing out millions of dollars in bonuses to workers - and not even for a job well done.    

"You should be really ticked off if you're mad at Wall Street fat-cats," Bolling said. "Barack Obama tells us we should be worrying about them. How about in their own administration - they're rewarding people in the FDIC, the Office of Thrift Supervision (OTS), and in the other offices that are charged with keeping an eye on the banks."

Bolling noted that, under the watchful eye of the regulators, nearly two hundred banks failed since the financial meltdown. But through the Freedom of Information Act, Fox Business and company discovered that that didn't stop government officials (such as the presidential-appointed Comptroller) from giving each other green hand-shakes and pats on the back:

"The problem is when the FDIC was under scrutiny, and the OTS was under scrutiny, they found that they weren't performing and that's a lot of the reason why some of these banks failed is because they weren't holding these banks to high enough standards," Boolling said. "So these banks fail - they look bad. Things start to get better in the economy, banks start to turn around - they start giving each other bonuses."

Bolling highlighted one example where an official received bonuses equaling nearly one-quarter the salary:

"In one instance, one of the regulators made $179,000 salary - and $41,000 in bonus. This is just crazy. If you're mad at Wall Street, take a look at some of these regulators."   

So will these "fat cat" regulators be subject to the scorn of the media and the president? Don't count on it. More likely, they'll join Fannie Mae and Freddie Mac on the list of liberal approved protected entities.

Left-wing filmmaker Michael Moore and CNBC's Rick Santelli couldn't be more philosophically opposite. Style of argument differs too: Michael Moore assumes the worst in people that oppose his view.

In a March 12 appearance on WNYC 93.9 FM/820 AM's "The Brian Lehrer Show," Moore was asked to react to Rick Santelli's February 2009 call for action against the Obama administration proposal to offer a housing relief through the taxpayer to those who got in over their heads on their mortgages.

"Ah, the sound of angry white guys wafting its way through the airwaves," Moore said. "Obviously that was a pivotal moment for that, but if you notice what he's railing against is he's blaming the whole mortgage crisis on the little guy who took out a mortgage he shouldn't have taken out, living beyond his means, having a home with too many bathrooms, when in fact - as my movie points out - the FBI of all people, have stated clearly through their own investigation that 80 percent of this mortgage crisis that we've gone through has been caused by the banks and lending institutions, by the fraud committed by the banks and the lending institutions - not by the person who's living beyond their means."

According to Moore, people living beyond their means is nothing new, and Santelli's outcry was nothing more than classism and bigotry.

"Listen, there's always been people who live beyond their means, who shouldn't be spending money," Moore continued. "I mean, it is not a new thing. You probably have someone in your family who does that. I have someone. It may even be you, Brian. But that's not a new thing. It never caused a financial collapse before. This collapse was caused by the people right down the street here who took people's mortgages, divided them up a thousand ways, bundled them and sold them off to people in China, Russia and everywhere else and that's in part why we're suffering through this. The way Santelli presented it was a classist, bigotist way of presenting it."

Moore's interpretation of Santelli's Feb. 19, 2009 call is curious because Santelli was not railing against people who got in over their heads financially. Instead he was attacking the policy responses offered by the Obama administration and the federal government. However, Moore insisted it was nothing less than 1930s-era-type propaganda used to whip up anger at other citizens, rather than politicians and CEOs.

"I remember ever since I was a kid, I can remember people complaining about ‘those people' in the ‘inner city,' people on welfare, oh, ‘look at them driving the Cadillac down the street and they're on welfare,'" Moore said. "You know, I mean this kind of bigotry is not new and it's very easy. I mean, that's a telling moment. If you watch that and you just wanted to wind the clock back 70, 80 years - whipping up people who are hurting because of the economy and blaming it on essentially on their fellow citizens as opposed to the leadership, the political leadership, the corporate leadership - it's a very, very easy thing to do and why this is actually kind of a scary time. If liberals and the left don't have a plan, don't have a program, don't have something to offer to these people who are hurting and suffering - they will be easily manipulated by the right."

But if people in the Tea Party movement, inspired by Rick Santelli, were outraged at their "fellow citizens," as Moore contends - why are the protests occurring in Washington, D.C., the center of the U.S. federal government?

A report released Monday says that California's new global warming law will increase unemployment in the Golden State.

The announcement was in stark contrast to continual claims by the Left and their media minions that proposed cap and trade legislation at the federal level will result in an explosion in green jobs.

As reported by the Los Angeles Times Wednesday, the nation's most populated state, which is the first to impose laws concerning carbon dioxide emissions, might see a net reduction in employment as a result:

The state's nonpartisan legislative analyst's office examined 2008 economic modeling by the California Air Resources Board and concluded that it "may overstate the number of jobs" attributable to future implementation of the 2006 climate law.

While acknowledging the uncertainty of such projections, the report said, "On balance, however, we believe that the aggregate net jobs impact in the near term is likely to be negative, even after recognizing that many of the . . . programs phase in over time."

The report comes at a politically charged moment, when polls show employment to be Americans' top concern. Signature gathering began last week on a November ballot initiative that would delay the law, known as AB 32, until unemployment drops to 5.5% for at least a year. California joblessness is over 12% today.

With U.S. unemployment near ten percent, and the economy consistently viewed as the nation's top priority in poll after poll, one would think this report would be quite newsworthy.

After all, with belief in Nobel Laureate Al Gore's favorite money-making myth plummeting, and Congress beginning to work on compromise cap and trade packages, the public should be informed that California's Legislative Analyst's Office believes its state's climate change legislation will result in job cuts.

Unfortunately, Google news and LexisNexis searches found that outside of California, American media have not shown much interest Monday's announcement.

The Associated Press ran a story about this Tuesday, but only on its State and Local Wire. 

Reuters also did a piece on the matter Tuesday which ran in the U.K.

From what I can tell, outside of California, the only major media outlet to find this issue newsworthy was Investor's Business Daily.

I wonder why.

The economics of personality? The concept defies logic not to mention the laws of finance and accounting, but according to Newsweek's Eleanor Clift it wasn't the combination of President Ronald Reagan's attack on inflation and his low tax rates on individuals and businesses - but his personality that rescued the economy from the malaise of the early 1980s.

On the "The McLaughlin Group" March 7, Clift declared that Reaganomics was a failure, at least initially.

"There's some revisionist thinking going here," Clift said. "Reaganomics did not work, certainly not the first two years. When the midterm elections were held during Reagan's tenure, unemployment was at 10.8 percent."

So what did turn the economy around? According to Clift, it was Reagan's personality that led the economy out of the doldrums. And that's what Obama has lacked she said, despite his hope and change mantra.

"Now, I will grant that with the force of his personality and his - the conviction and the confidence that he projected, he kept Americans believing in him," Clift said. "That's where, I think, President Obama has failed."

However, she advised that we should rest assured - all the policy initiatives Obama has put into play will save the United States.

"This president inherited an economic situation far worse than what Reagan had because this was a meltdown of the financial system and he has brought the economy back from the brink," Clift said. "The stimulus bill and the other programs, health care, ushering a new green economy - they've been interpreted by his critics as all these individual government takeovers. He has failed in projecting a narrative of what - how he's trying to rebuild this country."

Perhaps President Barack Obama might have preferred New York Times columnist Tom Friedman to reserve these comments for their golf outings together, but has Friedman recognized this path toward a larger government is unsustainable?

On MSNBC's March 5 "Morning Joe," host Joe Scarborough recounted his childhood in the early 1970s and the poor economy. He explained there was a different focus - that his family was hoping for the economy to turn around and could have cared less about the other issues of the day - Vietnam, Watergate, etc. It was all about the economy.

"You know Tom Friedman, I remember in the early '70s, my dad worked for Lockheed, got laid off and he was without a job for 18 months," Scarborough said. "This is in the middle of Watergate was blowing up on TV and in the middle of Vietnam, as it was grinding to a very bloody, messy ending. And my family, we just cared about one thing. When we watched Walter Cronkite at night, we wanted to know if the economy was turning around. And we didn't understand what was going on in the college campuses."

Scarborough juxtaposed his scenario with what was going on now - that the debate about health care has distracted the so-called laser-like focus on improving unemployment in the United States and asked Friedman if the president and the rest of Washington just aren't getting it.

"My dad just wanted a job so he could take care of his family," Scarborough said. "I wonder if as Mike said, Washington and this administration still don't get that?"

And Friedman admitted the administration isn't getting it - well at least something. Friedman said should health care pass, Obama has to tell the American people this is it for entitlements for a long time and the new focus would have to be put on the United States building its stature back up in the world.

"Well, I think they don't get something here, Joe," Friedman said. "If this health care thing passes and I were the president the one thing I would say to the American people is, ‘Folks this is the last slice of pie you're going to get in a long time because the future is going to be about building a bigger pan. If we don't building a bigger pan with a more innovative America and more competitive America, this is the last slice you're ever going to get for a long time."

It's been proven time and again in over two hundred years of recorded American history, but some people still don't get it - the government is not the most efficient spender of money.

On CNBC's March 4 "Squawk Box," in the midst of reporting jobless claims and productivity data, the network's senior economics reporter Steve Liesman offered the suggestion that since some banks were increasing their stock dividend, more lending might be on the way. That could be a sign the economy is coming around, but "Squawk Box" co-host warned it could also mean banks want to pay out dividends before the taxes went up on them:

LIESMAN: Isn't right before the banks start to lend, they're going to increase their dividends first. That's the way they're most likely -
KERNEN: They better increase their dividends because when the dividend tax goes back up - when does that go back up?
WILBUR ROSS (Chairman and CEO of WL Ross & Co LLC): Next year.
KERNEN: Next year, after taxes, they won't have the same after-tax return. If you like the wealth effect of stocks rising, it would be nice not to have to just match your after-tax returns --

Lower taxes would have an impact on the size of government deficits as "Squawk Box" co-host Carl Quintanilla pointed out and this prompted a debate on where the appropriate tax rate should be, with Liesman advocating the pro-tax, pay-down-the-deficit approach.

QUINTANILLA: But if you like the paying down deficit -
LIESMAN: No, we want to pay down the deficit and not collect any revenues. We think we can do it. We'd rather complain about both sides of it.
KERNEN: Why don't we pay 100 percent tax and pay it down immediately?
LIESMAN: Zero tax, Joe. If low tax is great, no tax is greater.
KERNEN: We got to figure out a way that somewhere between zero and a hundred is a good idea.
LIESMAN: We can agree on that.
KERNEN: Good, maybe 90 percent is not great. Maybe 60 [percent] in New Jersey is not great.
LIESMAN: Maybe 35 [percent] is good. Maybe 25 [percent] is better. There's a point in time.

Fortunately, Liesman was surrounded by more rational people that understood the implications of higher taxes. CNBC CME Group floor reporter and Tea Party movement inspiration Rick Santelli proposed those who want higher taxes to voluntarily pay higher taxes.

"It's not illegal for people to donate their own check," Santelli said. "Come on - they can do it if they want. Come on, everybody put their money where their mouth is."

But Liesman argued that in this economic condition, with unemployment at 9.7 percent and stocks way off their 2007 highs that the business community is making way too much money, thus taxing is appropriate.

"All I know is I look at the numbers out there and business is making money hand-over-fist right now," Liesman said. "As much complaining as you get from the business community about the environment right now - they're making more money as a percentage of GDP than we've seen in a very long time."

Kernen pointed out that, whatever the tax rate, giving money to government is an unproductive allocation of capital.

KERNEN: At least you know it's going to be well spent by the government --
LIESMAN: I'm not talking about what the government's making, I'm talking about what business is making, Joe.
KERNEN: Yeah, but when it goes into at least 100 cents on every dollar will go into productive use.
LIESMAN: I don't know what you're talking about.
KERNEN: I know you don't.
LIESMAN: I mean ... the government's tax rate right now on corporations is 35 percent and most pay much less than that.

The United States has relatively one of the highest corporate tax rates in the world, second to only Japan. That puts the United States at a competitive disadvantage, some argue. A March 2 post on The Heritage Foundation's "The Foundry" warned that the higher taxes Liesman seemingly advocated would harm the job market.

"As we consider the President's proposal to raise taxes on corporate income, the trend of lower corporate tax rates in other countries should serve as a warning to the United States, which already has the second highest in the world," "The Foundry" explained. "Heritage experts J.D. Foster and Curtis Dubay point out in their paper that not only will companies struggle to compete abroad, the domestic production in the U.S. will fall as well. In fact, the evidence is clear that when U.S. companies have operations in foreign companies, U.S. jobs increase. The bottom line is that additional taxes hurt, costing jobs and opportunity - a high price to pay for government's wasteful spending."

At last there appears to be a president worse than Jimmy Carter - at least according to conservative talk show host Mark Levin. 

That was the question host Don Imus asked Levin on the Fox Business Network's "Imus in the Morning."  "So the President Obama, worse than Jimmy Carter?"

"Worse than Jimmy Carter? I mean they're not mutually exclusive, they're both disasters," Levin replied, citing many of the parallels of the two administrations. 

But on the home front, Levin said Obama was beyond comparison: "I think on domestic policy, nobody comes close to Barack Obama. I think he's the biggest disaster in modern American history."

That led the duo to discuss the $787 billion stimulus bill, that turned 1-year-old Feb. 17. "Regarding the stimulus package, the president says that that kept us from sliding into Depression," Imus noted.

Levin claimed concerns about a Depression were false, and that Obama was harming America's economy with government intrusion - choking out the private sector. "You know, this is what you do when you're desperate, and you're a radical propagandist," Mark Levin said.

"This is a very vicious recession and we would have been out of by now if he wasn't smothering the private sector, threatening to tax them, nationalizing major industries, government doesn't spread wealth, it destroys wealth and it spreads misery. Now we've had trillions of dollars spent in the last 13-14 months...trillions...following this failed ideology.  We still have almost 10 percent unemployment, still foreclosures, soon the fed is going to back off  pumping money into the housing market, interest rates are going to go up..." Levin continued, not buying the merits of the stimulus.  

Then came the harshest remarks from the politically incorrect commentator about the perceived socialist ideology of the president:

"This philosophy that Obama embraces has failed whenever it's tried, wherever it's tried. And you notice they always try to say the same thing - ‘we haven't gone far enough,' ‘we need more money,' ‘we need more government,' and then they pick enemies - this industry, that industry - it's because they're failures. And this is how they continue to push their propaganda.  We weren't sliding into a great Depression, so now he's rewriting history."   

Imus then switched topics, asking his guest about his thoughts on national security and the events surrounding the Guantanamo Bay and terror trials. 

Levin said he simply doesn't know what is going to happen as a result of Obama's "illogical" stance on terror:

"There is utter chaos in this administration on how to treat terrorists who are captured on the battlefield and there shouldn't be utter chaos.  We should know exactly what we're doing and our enemies should fear us exactly what we're going to do to them - and they used to."

One thing Levin was sure about was  that America's credibility has been shot and consequences inevitable:

"Now they laugh at us.  They'll laugh in our faces and behind our backs," he continued. "And this doesn't just resonate with Al-Qaeda and the Taliban, it resonates with the Russians and the Chinese. The Chinese have no respect for Obama at all. The Russians could care less about what he has to say, and what happens under those circumstances - they create enormous danger - because our enemies are going to press and push and test us. And I'm not sure this president is up to it."

 

Yesterday (at NewsBusters; at BizzyBlog), I noted Fannie Mae's $72 billion loss announcement and the ward of the state's simultaneous $15.3 billion handout request.

Late Friday was also the occasion for the release by the Treasury Department of the "2009 Financial Report of the United States Government." The report shows how seriously the government's financial situation deteriorated during the fiscal year that ended September 30. The coverage of the report prepared by the Associated Press's Martin Crutsinger demonstrated how weak the press's communication of that seriousness is.

After presenting the first several paragraphs of Crutsinger's composition for the purpose of providing the basic facts, I'll concentrate on the AP writer's three worst paragraphs that followed (there is also a summary table from the report at the end of this post):

Report shows government's liabilities surging

The federal government fell further into the red in 2009, with its financial position hitting a deficit of $11.46 trillion.

That figure is 12.3 percent higher than the previous year, according to a new report issued by the Treasury Department on Friday.

The annual report shows that the government's big entitlement programs such as Social Security and Medicare are facing a deficit over the next 75 years of $45.88 trillion, an increase in that deficit of $2.9 trillion in just one year.

The $11.46 trillion deficit in the government's net financial position in 2009 represents an increase of $1.25 trillion over 2008. The position reflects the government's assets, such as cash, property and investments, minus liabilities, such as the federal debt held by the public.

Here is the first of Crutsinger's three worst subsequent paragraphs:

Under the cash accounting system, the federal budget deficit for 2009, the budget year that ended on Sept. 30, soared to an all-time high of $1.42 trillion, surpassing the previous record of $454.8 billion set in 2008.

The trouble is the government isn't using a purely "cash accounting system" in its routine reports.

One might be tempted to give Crustinger a pass on this, because Treasury made no effort to elaborate on what "prepared primarily on a 'cash basis'" (the description on Page 7 of the 254-page Financial Report) means. But he doesn't deserve one, because he was around when Treasury made a huge adjustment last April to previously released information from October 2008 through March 2009 that moved it away from "cash basis" in one critical area. In fact, he reported it on May 12, 2009:

However, the Obama administration said it was changing the accounting process to a "net present value" basis, which means it assumes that the government is getting an asset when it provides loans to the banks and auto companies. Based on the new accounting method, the size of the deficit from October through March fell about $175 billion.

If this change hadn't been made, fiscal 2009's reported deficit on a purely cash basis would have been at least $200 billion higher.

Here's Crutsinger's second weak subsequent paragraph:

The deficit surge reflects a deep recession that has cut into tax revenues and boosted spending on such programs as unemployment insurance and economic stimulus packages.

Beyond the fact that Crutsinger's article at various points uses the word "deficit" to describe three very different things (negative net worth, accumulated actuarial obligations, and annual differences between receipts and outlays), more than likely leaving many readers hopelessly confused, the AP writer acts as if this inanimate thing known as "the deep recession" somehow "boosted spending," even on the stimulus, all on its own. Uh, not exactly. Setting aside the issue of effectiveness or lack thereof, Congress and the Obama administration "boosted spending" on economic stimulus in response to the recession, and for that matter passed and signed off on spending programs in general.

The final weak paragraph concerns Crutsinger's characterization of the Government Accountability Office's report on the government's financial statements:

The General Accountability Office, the auditing arm of Congress, said it could not sign off on the government's books because of serious financial management problems at the Defense Department and other financial shortcomings.

Crutsinger got the first word in the agency's name wrong, but far more importantly, he mostly whitewashed what it had to say, as you can see from the first four paragraphs of its related press release (the full letter to the President, the Senate, and the Speaker of the House in PDF form is here):

Weaknesses Evident in Financial Management as Nation Confronts Long-Term Fiscal Problems & Financial Regulatory Weaknesses

The U.S. Government Accountability Office (GAO) could not render an opinion on the consolidated financial statements of the federal government (other than the Statement of Social Insurance) because of widespread material internal control weaknesses and other limitations.

“While financial management has improved significantly since the government began preparing consolidated financial statements, for the 13th year in a row now shortcomings in three areas again prevented us from expressing an opinion,” said Gene L. Dodaro, Acting Comptroller General of the United States. “I’m referring to serious financial management problems at the Department of Defense (DOD), the federal government’s inability to adequately account for and reconcile intragovernmental activity and balances between agencies, and the ineffective process the federal government uses to prepare the consolidated financial statements.”

Dodaro also cited material weaknesses involving improper payments estimated to be at least $98 billion, information security across government, and tax collection activities. He noted that four major agencies—DOD, the Department of Homeland Security, the Department of State, and NASA—did not get clean opinions.

The material weaknesses discussed in GAO’s audit report hinder the government’s ability to (1) reliably report on many of its assets, liabilities, and costs; (2) accurately measure the full cost as well as the financial and non-financial performance of certain programs and activities; (3) adequately safeguard significant assets and properly record various transactions; and (4) have reliable information to operate efficiently and effectively.

Although DOD was the largest department that failed to get a clean opinion, it clearly wasn't the only one; Crutsinger clearly misled readers into thinking it was. Additionally, his characterization of what GAO referred to as "widespread material internal control weaknesses," "serious financial problems," and a huge amount of "improper payments" as mere "financial shortcomings" significantly downplays a very ugly reality. At the very least, the AP reporter could have put the word "shortcomings" in quotes and mentioned that the government has never received a clean audit opinion.

The combination of the government's convenient late Friday release and Crutsinger's awful reportage will work to ensure that the most of the public will continue not to comprehend just how dangerously out of control Washington is.

For those who can't carve out the time to wade through hundreds of pages, here is a summary table from the Financial Report capsulizing the continuing calamity:

Cross-posted at BizzyBlog.com.

Earlier this afternoon, NB's Tim Graham noted how NPR's Robert Siegel and Pew Research pollster Andrew Kohut were congratulating "Millennials" on being "less 'militaristic' and less religious."

At end of his post, Graham noted that Siegel and Kohut "somehow" forgot to discuss the key political finding in the poll, namely that the demographic's 32-point favoritism towards Democrats (62% to 30%) has declined by more than half (to 54% to 40%) in just one year of living in Obamaland. Shoot, if that trend continues for another nine months, it will be almost all even by Election Day in November.

Why is the meltdown occurring? Get a load of the answers the Associated Press's Hope Yen identified in an early Wednesday dispatch (HT to Mark Levin, who mentioned this on his Wednesday evening show):

Dem youth support waning amid gov't gridlock

Whither the youth vote? A year after backing Barack Obama by an overwhelming 2-to-1 ratio, young adults are quickly cooling toward Democrats amid dissatisfaction over the lack of change in Washington and an escalating war in Afghanistan.

A study by the Pew Research Center, being released Wednesday, highlights the eroding support from 18-to-29 year olds whose strong turnout in November 2008 was touted by some demographers as the start of a new Democratic movement.

The findings are significant because they offer further proof that the diverse coalition of voters Obama cobbled together in 2008 - including high numbers of first-timers, minorities and youths - are not Democratic Party voters who can necessarily be counted on.

While young adults remain decidedly more liberal, the survey found the Democratic advantage among 18-to-29 year olds has substantially narrowed - from a record 62 percent identifying as Democrat vs. 30 percent for the GOP in 2008, down to 54 percent vs. 40 percent last December. It was the largest percentage point jump in those who identified or leaned Republican among all the voting age groups.

Young adults' voting enthusiasm also crumbled.

So it's all about gridlock and the war in Afghanistan? Give. Me. A. Break. To invoke James Carville from 1992, "It's the economy, stupid."

Pew's own report (a very big PDF) fails to support Yen's yearnings, particularly this paragraph from Page 39 (page 46 of the PDF; bold is mine):

A Pew Research Center survey in 2006 found that half of all 18- to 29-year-olds were employed in full-time jobs. Then came the Great Recession. In our 2010 survey, as a battered economy struggles to rebound, about four-in-ten (41%) people in the same age group say they are working full time—a decline of 9 percentage points. In contrast, about the same proportion of older adults reported working full time in both the 2006 and 2010 surveys.

That statement would almost seem to indicate that Millennials have borne a very disproportionate share of the pain associated with the economy's decline.

It's interesting how Pew failed to reveal data more recent than four years ago that might have told us how much of the decrease in full-time employment has come more recently. What it looked like a year ago would tell us how much of the might be pegged to the overall economy, while a two- or three-year lookback would provide a clue as to how much of the decline is tied to federal and state increases in the minimum wage. Given that 2006 and 2007 were pretty decent years for the economy, it wouldn't surprise me if almost all, all, or even more than all of that nine-point drop occurred in the past couple of years.

Yen waited until her 19th and final substantive paragraph to note the following:

About 37 percent of young adults are unemployed or out of the workforce, the highest share among this age group in more than three decades. A record share - 39.6 percent - was enrolled in college, and one in 8 millennials ages 22 and older say they had "boomeranged" back into their parents' home because of the recession.

Regardless of initial political inclinations, that's not a formula favoring whoever happens to be in power.

That certainly didn't come through in the NPR interview Tim Graham cited, nor in Ms. Chen's AP report. I'll bet the folks at the DNC and RNC have figured it out anyway.

Cross-posted at BizzyBlog.com.

The adverb that begins with a "U" made yet another appearance yesterday in connection with an economic report. The related noun that begins with an "S" came along for the ride.

The news concerned sales of new homes. They fell "Unexpectedly" to their lowest level since 1963, when the U.S population was about 40% lower. The decline was a "Surprise" to economists, who had predicted an increase.

It continues to fascinate that the "Unexpected" news that came as a "Surprise" to economists during a large portion of the Bush 43 administration more often than not was to the upside, while the trail of "Unexpected Surprises" during the current administration is littered with downers.

Ahead of the news, the Associated Press appeared ready to play up what it thought would be good news, and then exiled its reports to remote corners when things didn't go as expected.

In a Thursday afternoon story on the small rise in the Case Schiller home price index, the AP's Adrian Sanz was talking of recovery, while inventing a new economic concept (bold is mine):

Home prices rise 0.3 percent in December

Home prices edged up in December, the seventh straight monthly gain and another sign the housing market continues its bumpy recovery.

... for homeowners who currently owe more on their mortgages than their properties are worth, rising prices will rebuild equity.

...Home sales data for January, out later this week, are also expected to show gains over year-end levels as buyers took advantage of low interest rates and temporary tax credits.

I hate to break it to you, Adrian, but if you're underwater on your mortgage, rising prices, especially given the tiny one you reported, serve almost entirely to reduce negative equity. To "rebuild" equity, you first have to have some.

The next morning, an unbylined AP report also anticipated the home sales gain:

New home sales likely posted a rebound in January but economists are worried that the housing recovery could be headed for tougher times once government support ends.

Economists surveyed by Thomson Reuters expect sales of new homes rose 5.3 percent in January to a seasonally adjusted annual rate of 360,000 units. The Commerce Department will release the report on new home sales at 10 a.m. EST Wednesday.

Out came the report (the PDF press release is here), and the AP moved the news into a brief "Summary Box," the kind that I suspect doesn't get picked up by subscribing outlets as often as regular narratives:

RECORD LOW: Sales of new homes plunged 11.2 percent to an annual sales pace of 309,000 units in January, the lowest level on government records going back to 1963.

The "S-word" made its appearance in a multi-item "Business Highlights" summary:

Sales of new homes plunged to a record low in January, underscoring the formidable challenges facing the housing industry as it tries to recover from the worst slump in decades.

The Commerce Department reported Wednesday that new home sales dropped 11.2 percent last month to a seasonally adjusted annual sales pace of 309,000 units, the lowest level on records going back nearly a half century. The big drop was a surprise to economists who were expecting a 5 percent increase over December's pace.

Reuters (HT Karl at Hot Air) pitched in with the "U-word":

Sales of new homes unexpectedly fell to a record low in January while demand for loans to buy homes hit a 13-year low last week, fanning fears of renewed weakness in the housing market.

Interestingly, the Reuters paragraph just excerpted differs from what Karl found there when he did his post:

Sales of newly built single-family homes unexpectedly fell to a record low in January, according to government data on Wednesday that hinted at potential trouble for the fragile housing market recovery.

Karl's questions in response to what he saw still stands, though in revised form. His question was, "Potential trouble? Really? Mine, in light of the revision, would be, "Renewed weakness? When did the weakness ever stop?"

The new home sales news is nowhere to be found in the AP's current video rotation at its business stories. Oh, but there is an item with a smiling picture of the president about how foreclosures have declined (could they possibly have gotten any worse?). Additionally, consistent with what I noted three weeks ago (at NewsBusters; at BizzyBlog), seven of the 11 vids in AP's rotation are about Toyota's troubles.

One would hope that the economists who continue to get their predictions wrong, and the media outlets that carry them, are going to recognize that what the Wall Street Journal and Investors Business Daily have been referring to as "the Uncertainty Economy," and which I have personalized by calling it the "POR (Pelosi-Obama-Reid" economy" has cast a pervasive pall over the entire economy, and must be considered in some way when formulating predictions.

Until it is, we're going to keep seeing "Unexpected Surprises."

Cross-posted at BizzyBlog.com.

Vice President Biden keeps recycling his unemployment speeches – except he keeps confusing the suburbs of his hometown of Scranton:

1.  On October 19, 2009, he used Minooka:

My pop — my grandpop used to say — there was a suburb of Scranton called Minooka. He said, “When the guy in Minooka’s out of work, it’s an economic slowdown. When your brother- in-law’s out of work, it’s a recession. When you’re out of work, it’s a depression.”  Well, it’s a depression — it’s a depression for millions of Americans, through no fault of their own.

2.  On October 30, 2009, he used Dickson City:

My grandpop used to have an expression. We’re from Scranton. He’d say — and I mean this literally. It wasn’t viewed as a joke. He said, “Joey, when the guy in Dickson City,” a small town above Scranton, “is out of work, it’s an economic slowdown. When you’re brother-in-law is out of work, it’s a recession. When you’re out of work, it’s a depression.” And it’s a depression for millions of American people.

3.  On December 3, 2009, at the White House jobs summit, he used Throop:

There used to be an expression, and I’m not joking, my grandfather always used it. He was from Scranton, Pennsylvania. He said, “When the guy from Throop is out of work, it’s an economic slowdown. When your brother-in-law is out of work, it’s a recession. When you’re out of work, it’s a depression.” And it is a depression for over 10 million Americans…

4.  On February 22, 2010, speaking to Governors at the White House, he used Olyphant:

My grandpop used to have an expression — a couple of you heard me say — when the guy — he was from Scranton — when the guy in Olyphant’s is out of work it’s an economic slowdown — that’s a little town outside of Scranton. When your brother-in-law is out of work it’s a recession. When you’re out of work it’s a depression. It’s a depression for a lot of Americans.

For the record, Harry Truman is the apparent original author of this quote (minus any reference to Scranton suburbs):

“It’s a recession when your neighbor loses his job; it’s a depression when you lose yours.” Harry S Truman, in Observer, April 13, 1958

Let's be honest for a minute, America. I know a lot of you had stars in your eyes last January when Barack Obama was inaugurated amid promises of "change we can believe in", closing down evil Guantanamo Bay, bringing the troops home from Iraq and all the other idealistic promises he made so he could get elected.

He also promised to fix the economy and let us know in no uncertain terms that he had inherited a real fiscal mess that would take trillions of federal dollars to fix, and after trillions of dollars things have only gotten worse.

It seems like that's been the mantra of the Obama Administration ever since they took office, the excuse for most of their problems is that George Bush left such a mess that Obama just can't seem to find anything to do about it except to borrow and spend more money.

I wonder what the media would have said if after 9/11 George Bush would have stood up and told the world that due to the Clinton Administration refusing to take custody of Osama bin Laden when he was offered three times or that he refused to let American operatives take him out when they had a chance, the ramifications of 9/11 were out of his control.

No matter what you might have thought about Bush's presidency he was not a crybaby, he didn't blame his shortcomings on anybody but himself.

His administration immediately pursued Islamic terrorists to the ends of the earth, capturing and killing them, disrupting their plans and rolling up their networks and in so doing kept America safe for the remaining seven years of his administration.

Now let me ask you a question. Do you expect Obama and his milksop Justice Department to keep America safe for the remaining three years of the his administration?

Three of our top counter terrorist experts have basically told us that, in their opinion, an attack is imminent.

To give terrorist murderers the same rights as American citizens, read them Miranda rights and give them civil trials is so totally insane that Eric Holder should be put in a room with rubber walls.

In fact where is the feckless Mr. Holder these days, maybe the same place Al Gore is, riding out the worst winter on record for a number of years, global warming notwithstanding.

Congress just raised the debt ceiling to over fourteen trillion dollars and it is expected to spend up to the limit this month.

Another question, do you think there will be a person in the United States of America in the next three generations who will not feel the lash of Obama's reckless fiscal policies?

In typical Obama style, instead of using the bailout money the banks and financial institutions have paid back to reduce the national debt, he plans on spending it on another ill-fated government program.

Eventually, just the interest on this debt is going to eat up the lion's share of our GDP, inflation is going to go into high double digits and the dollar is going to fall like a rock.

Obama talks about fiscal responsibility but continues to spend every cent he can beg, borrow or steal from your grandchildren.

There are two choices; put on the brakes immediately, freeze all government spending with the exception of national defense, cut taxes to get businesses going again and elect some responsible people.

You don't even want to think about the other one.

Look at the bright side, Mr. President: It’s just one less leader you need to bow to.

On two occasions, President Obama has made off-handed swipes at Las Vegas, and both times Mayor Oscar Goodman defended his city.

Most recently, Obama, with a straight face, was discussing making wise financial decisions (because he’s been so prudent with our money) and told a crowd in New Hampshire:

“When times are tough, you tighten your belts.  You don’t go buying a boat when you can barely pay your mortgage.  You don’t blow a bunch of cash in Vegas when you’re trying to save for college.”

So when the customary invitation came from the White House to kiss the ring of the visiting president at the airport (Obama was in Las Vegas Thursday, presumably to bail some water out of the sinking S.S. Harry Reid), Goodman fought back.  He declined the invitation.

Kudos to Mayor Goodman for standing up for his constituents and not tolerating the president’s attacks on his city – as humorous as they were meant to be.

“We are hurting, we have people in foreclosures, we have people having a hard time feeding their families and we can’t stand to have a flippant statement made,” said Mayor Goodman.

“I haven’t heard an apology, I haven’t heard a response, all I do is get invitations,” Goodman went on to say.

I doubt you’ll get an apology from this administration, Mayor Goodman.

The arrogance forbids it.  And sadly, you may miss out on one thing: a picture of the leader of the free world bowing to you.

It's no surprise that Democratic National Committee chair Tim Kaine would agree with the Obama administration about the effectiveness of last year's stimulus packages. That's why CNN's "American Morning" should have at least included a single critical guest Feb. 17.

Kiran Chetry began the interview by citing a CNN poll that showed public skepticism regarding the stimulus.

"What do you say to Americans who feel that this $862 billion was basically wasted?" Chetry asked.

Kaine defended the stimulus by citing a New York Times piece saying that the stimulus "has pretty much done exactly what it was intended to do." The former governor gave the stimulus credit with getting the economy growing again. Kane also said it saved or created 2.4 million jobs.

According to the CNN poll, only 36 percent of people believed the stimulus benefited the economy, while 63 percent thought that the stimulus was made up of political projects that had no economic impact.

Chetry pressed the point to Kaine again: "Why do you think nearly a third of people actually only a third, according to our polling, think that the stimulus money is actually benefiting the economy? Why is there that disconnect then if you think it is working so well?"

"Because people are still hurting," replied Kaine.

In addition to not including a critic, Chetry neglected to point out the failure of the stimulus to prevent unemployment from rising above 8 percent (as promised), the most jobs lost in one year since 1940 and the many examples of waste and misuse of stimulus funds that some media outlets have reported in recent months.

The Business & Media Institute examined the year of network news coverage of the stimulus package and found all three broadcasts networks to be unofficial boosters of the massive government spending by picking more supporters than critics to include in stories and leaving criticism entirely out of almost half of their reports.

It's no surprise that Democratic National Committee chair Tim Kaine would agree with the Obama administration about the effectiveness of last year's stimulus packages. That's why CNN's "American Morning" should have at least included a single critical guest Feb. 17.

Kiran Chetry began the interview by citing a CNN poll that showed public skepticism regarding the stimulus.

"What do you say to Americans who feel that this $862 billion was basically wasted?" Chetry asked.

Kaine defended the stimulus by citing a New York Times piece saying that the stimulus "has pretty much done exactly what it was intended to do." The former governor gave the stimulus credit with getting the economy growing again. Kane also said it saved or created 2.4 million jobs.

According to the CNN poll, only 36 percent of people believed the stimulus benefited the economy, while 63 percent thought that the stimulus was made up of political projects that had no economic impact.

Chetry pressed the point to Kaine again: "Why do you think nearly a third of people actually only a third, according to our polling, think that the stimulus money is actually benefiting the economy? Why is there that disconnect then if you think it is working so well?"

"Because people are still hurting," replied Kaine.

In addition to not including a critic, Chetry neglected to point out the failure of the stimulus to prevent unemployment from rising above 8 percent (as promised), the most jobs lost in one year since 1940 and the many examples of waste and misuse of stimulus funds that some media outlets have reported in recent months.

The Business & Media Institute examined the year of network news coverage of the stimulus package and found all three broadcasts networks to be unofficial boosters of the massive government spending by picking more supporters than critics to include in stories and leaving criticism entirely out of almost half of their reports.

Press reports about the prediction by President Obama's Council of Economic Advisers that the economy would add an average of 95,000 jobs per month during calendar 2010 weren't exactly overflowing with praise, but were lacking in something one would have expected: historical context.

Philip Elliott's Associated Press report provided none. Sewell Chan's New York Times coverage at least pointed out that the promised level of job growth was "barely enough to keep up with the normal number of jobs the economy would have to create to meet the growth in the labor force and keep the unemployment rate steady."

But how would what the administration predicts compare to previous recoveries? As seen in the following chart based on more detailed information here, all based on data from the government's Bureau of Labor Statistics, a 95,000 per month performance in job growth following a breakout quarter after a recession wouldn't exactly be impressive:

With Reagan, the question is whether you peg the economy's breakout as the first or second quarter of 1983, when annualized growth was 5.1% and 9.5%, respectively. Regardless of which quarter you pick, the supply side tax cut-driven performance was spectacular. In fact, in one month (September 1983), the economy added almost as many jobs (1,114,000) as Team Obama predicts will be added during all of 2010 (12 x 95,000 = 1,140,000). Too bad it took the Gipper so long to get the cuts through Congress.

The performance after Bush 43's breakout 6.9% second quarter of 2003 was far less impressive -- but then again, so was the relative size of the 2003 income and investment-related tax cuts in comparison to Reagan's. Nevertheless, what Democrats at the time were calling the worst economy since Herbert Hoover added 1,603,000 jobs during the next 12 months. That's an average of 134,000 per month, which is 41% greater than the 95,000 per month Obama's Council of Economic Advisers is predicting.

So what's going on here? I would suggest that the administration, seeing mediocrity everywhere despite what is supposed to have been its own breakout quarter (5.7% in the fourth quarter of 2008) and despite their bitterly clinging to the supposed superiority of Keynesian stimulus over supply-side tax cuts, is lowering the bar to something that has at least an outside chance of occurring.

This bunch also hopes that historical reviews such as the one just done above exposing just how pathetic their expectations are won't become widely known. Sadly so far, the press is cooperating to ensure that.

Cross-posted at BizzyBlog.com.

There are at least two schools of thought in economics. One of them - Keynesian economics - suggests that consumption is the most important element and therefore spending is the way to restore a faltering economy.
 
This is the theory that's been adopted by the spendthrift Obama administration and often the news media that have argued in favor of more government and personal spending.
 
But according to former treasury secretary Henry (Hank) Paulson, Jr. overspending was a "root cause" of the financial crisis.
 
Paulson told CNN's Christine Romans on Feb. 10, "One of the root causes of the crisis were the structural economic imbalances that really result from the proclivity of not just our nation, but Americans to save too little, to invest too little, to borrow to much, to spend too much."
 
Romans asked Paulson to elaborate on the "global imbalances" which she identified as the trade deficit. "This is still a problem," Romans said. "We're saving more, but we're still importing far more than we're exporting from China for example."
 
"I think we need to start at home with some of our policies at home," Paulson answered. "We have a tax system that really discourages savings and investment, and punishes them. And we have a tax system that really encourages consumption. We have housing policies that penalize renters relative to homeowners. So, and then you look at globally we have nations in Asia, China, Japan - others that don't have enough domestic consumption. They need to consume more and they need to save less."

What Paulson didn't mention was that the bailouts he himself helped engineer also punished savers. Washington Post business columnist Allan Sloan explained this on Oct. 20, 2009.
 
"The government is spending trillions to keep interest rates down to support the economy and prop up housing prices, and those low rates have inflicted collateral damage on savers' incomes," Sloan wrote.
 
Sloan also quoted Greg McBride, senior financial analyst at Bankrate.com, who said "It's a direct wealth transfer from savers and retirees to overly indebted borrowers." Sloan cited a 40 percent drop in returns for five-year CDs and much lower yields on Treasury securities compared to 2007.
 
Fox Business anchor Cody Willard criticized the "wealth redistribution trick" of targeted tax credits for "new home buyers" on his MarketWatch blog last year.  In his view, it punished the renter in favor of the homeowner "who already doesn't have to pay his fair share of taxes because he gets a ‘mortgage write offs' while those of us who rent don't get ‘rental write offs'."

White House Budget Director Peter Orszag and Congressional Budget Office Director Doug Elmendorf have a problem: They can't revise their budget estimates quickly enough to account for the continued bad news about tax collections arriving daily from the Treasury Department. Luckily for them, but unfortunately for taxpayers, an establishment media obsessed with PDS (Palin Derangement Syndrome), TDS (Tebow Derangement Syndrome), and TPDS (Tea Party Derangement Syndrome) isn't paying any meaningful attention to the problem.

Back in August of last year, the CBO guesstimated that collections during fiscal 2010 will amount to $2.264 trillion. That guesstimate assumed a 7.5% increase over the $2.105 trillion collected in 2009, and clearly depended heavily on a revival in private-sector economic growth and employment.

Well, economic growth has occurred. The problem is that it's the government that has grown, while the private sector has shrunk. Additionally, according to the Establishment Survey published by Uncle Sam's Bureau Labor Statistics, seasonally adjusted total employment has continued to fall.  

Thus, CBO dropped its estimate of fiscal 2010 receipts in projections it released in late January to $2.175 trillion. The collections guesstimate in the Obama administration's budget is actually a bit lower:

 

But it's very likely that both CBO and the administration are still way, way too optimistic. Collections for the first four months of fiscal 2010 have been absolutely dismal compared to fiscal 2009 (sources - Daily Treasury Statements of January 29, 2010 and January 30, 2009; Monthly Treasury Statement, December 2009):

 

Since fiscal 2010 in the real world already trails fiscal 2009 by almost $86 billion, receipts during the final eight months of fiscal 2010 are going to have to exceed fiscal 2009 by $146 billion ($86 billion plus the budget’s assumed $60 billion increase in FY10 v. FY09) for the administration’s receipts prediction to come true, and $156 billion for the CBO's number to come in.

Specifically, to make Orzag's number, the government will have to collect $1.477 trillion by the end of the year ($2.165 minus $.688), compared to the $1.332 trillion ($2.105 minus $.773) it collected during the final eight months of fiscal 2009. We're supposed to believe that following a decline of 11% during the first four months of the year, the last eight months will show an increase of almost 11% ($1.477 divided by $1.332).

Given the trend, it seems at least as likely that the government won't even collect $2 trillion by the end of the fiscal year. Even getting there would require a year-over-year drop of less than 1.5% for the rest of fiscal 2010 compared to the double-digit percentage declines we've seen thus far.

Whatever you want to call the ongoing fall in receipts (I'm leaning towards "starvation by so-called stimulus"), it should be news, and it virtually isn't.

Oh, and I almost forgot to tell readers that this year's receipts through four months are down about 20% from the first four months of fiscal 2008, during the supposedly economically awful administration of Bush 43.

A related post is here at BizzyBlog.com.

On Monday’s Morning Joe show on MSNBC, during a discussion of President Obama’s recent suggestions that he would be willing to talk with Republicans about health care reform, co-host Mika Brzezinski recounted Obama’s initial refusal to include the GOP, and claimed that Republicans "ARE the ones, you could argue, who wrecked the economy," which set off co-host Joe Scarborough. After Brzezinski claimed that "The last administration put us in the position that we are in," Scarborough denounced Democrats for pushing Republicans to support lending more money to people who could not pay back their mortgages.

He also brought up campaign contributions President Obama received from mortgage companies. Scarborough: "And, by the way, while I was being critical of the Republican party for allowing people to get mortgages they couldn't afford to repay, Democrats were calling Republicans racists. Barney Frank calling them racists for not giving even more mortgages they couldn't afford to pay. ... Barack Obama, the guy that got more money from Fannie and Freddie executives than anybody else on Capitol Hill doesn't exactly have clean hands here."

Below is a transcript of the relevant portion of the Monday, February 8, Morning Joe, on MSNBC, from about 8:09 a.m., with critical portions in bold:

JOE SCARBOROUGH: So, Mike Barnicle, what happens is, when the President opens the door, he’s got to listen to the ideas. And how does he not support tort reform, an idea that his base will hate, that his trial lawyer buddies will hate, but an idea that the CBO says will save Americans $54 billion?

MIKE BARNICLE: Joe, if he doesn’t want to be completely decimated as a party this November, he’s going to have to accept something out of this meeting from the Republican side of the aisle. If, of the three things-

SCARBOROUGH: By the way, ideas that the majority of Americans support.

BARNICLE: And if, of those three things that you mentioned, if he accepts one, I think he’s at 62 votes already.

MIKA BRZEZINSKI: Exactly.

BARNICLE: He picks up Scott Brown, Susan Collins, and the other Senator, and Olympia Snowe from Maine. He’ll pick up the New England moderates. There’s only three. There’s only three. You’ve got to give them something.

BRZEZINSKI: I don’t know.

BARNICLE: They can’t go back to Maine and Massachusetts and say we said no again.

BRZEZINSKI: I think it’s really great. And I also think it seems kind of like the natural process. I mean, you talk about the reticence to work with Republicans because they ARE the ones, you could argue, who wrecked the economy, so maybe there was some reticence at first. And now, we’re seeing far too left. [SCARBOROUGH LAUGHS] And now we’re – what? I thought this was a good reset(?).

SCARBOROUGH: They wrecked the economy? You know, by the way-

BRZEZINSKI: The last administration put us in the position that we are in.

SCARBOROUGH: By the way, nobody has been more critical-

BRZEZINSKI: Than you.

SCARBOROUGH: -of the Republican party than myself.

BRZEZINSKI: I know, I’m not saying you’re not.

SCARBOROUGH: But let us be clear-

BRZEZINSKI: What?

SCARBOROUGH: While I was criticizing the Republican party for spending too much money-

BRZEZINSKI: Yes?

SCARBOROUGH: -Democrats in Congress were criticizing the Republican party-

BRZEZINSKI: Yes?

SCARBOROUGH: -for not spending enough money. And, by the way, while I was being critical of the Republican party for allowing people to get mortgages they couldn’t afford to repay, Democrats were calling Republicans racists.

BRZEZINSKI: Does that deny the fact that the Republicans-

SCARBOROUGH: Barney Frank calling them racists for not giving even more mortgages they couldn’t afford to pay. So Barack Obama, by the way, one of the biggest – wait, hold on a second, hold on, wait a second-

BRZEZINSKI: Uh-huh.

SCAROBROUGH: -oh, that’s right, Barack Obama, the guy that got more money from Fannie and Freddie executives than anybody else on Capitol Hill doesn’t exactly have clean hands here.

BRZEZINSKI: I’m not saying-

SCARBOROUGH: So maybe everybody should sit down and talk, Republicans and Democrats alike.

BRZEZINSKI: Exactly, and I’m saying-

SCARBOROUGH: Well, you were just supporting him saying the hell with the Republicans last year.

BRZEZINSKI: No, that’s not what I said.

Rick Santelli is the star of perhaps the most politically consequential online video, viral to the extreme, of the past year (right). On February 19, 2009 he let loose on the Obama administration's economic policies on CNBC's "Squawk Box", calling for a "tea party", and inspiring millions of Americans to speak out against what he and many others see as collectivist economics policies pursued by the President and Congress..

“That was spontaneous, absolutely,” he said in an interview with the Daily Caller. “It was also from the heart, and I had no idea of the direction it would take or the response it would get.”

Almost a year later, Santelli is widely seen as the godfather of a large political coalition that, according to some polls, rivals the two major parties in popularity. The Tea Party protesters staged 48 simultaneous protests on tax day last year, a rally on the lawn of the Capitol with hundreds of thousands, if not millions of attendees, and will hold its own convention this week, with Sarah Palin giving the keynote address.

The media's coverage of the protests, and the policies that inspired them, Santelli insists has been less than stellar. "Most of the mainstream coverage of most of the crisis — the economy, the road to get here, and the Tea Party — has been very much lacking," he told the Daily Caller.

The liberal media has done it's best to portray the protesters as racists, extremists, hatemongers, and even "wimpy, whiny weasels who don't love their country" and "nothing but a bunch of tea-bagging rednecks."

But Santelli sees the MSM's knee-jerk reactions to the protests as signs of the movement's success. "The fact that many traditional media avenues that have ignored or belittled the tea parties all of a sudden seem to be spending an inordinate amount of time trying to understand and explain them, I think that alone gives credibility to their girth."

For his part, Santelli is content with remaining on the political sidelines, pleasantly observing the movement he helped create. "I try to avoid political ties," he says. "I’m pretty darn happy with my day job. At the end of the day, the markets are my passion."

So while his CNBC colleague Larry Kudlow contemplates a run against New York Senator Chuck Schumer, Santelli intends to dash the hopes of anyone who wished to send him to Washington. As he said in his monumental rant last February, "do you think I want to take a shower every hour? The last place I'm ever going to live or work is D.C."

“In my life, a very small amount of minutes made a difference," he told the Daily Caller. "I just find that to be one of the things that makes our country great and makes me very proud that I was a part of that."

Only a liberal could imagine that addressing the federal deficit and creating jobs might be mutually exclusive. On MSNBC's Feb. 3 "Morning Joe," Chrystia Freeland of The Financial Times asked Sen. Debbie Stabenow, D-Mich., whether she agreed with President Obama's stated intention of addressing the deficit next year.

"Senator, we've also heard from the president that next year - in his budget for next year - he is going to be focusing on deficit reduction, and he thinks its gonna be time be worried about that," Freeland said. "Is that too soon? Are you worried that the president should really be focusing right now still on stimulating the economy?"

Stabenow took the cue to launch into anti-Bush boilerplate. "Well we have to be focused on both and it's tough," she said. "I mean this president not only inherited the biggest deficit we've ever had, but the biggest deficit in jobs that we've ever had. We've got over 15 million people without jobs right now - bread winners no longer able to bring in a pay check."

Stabenow said that, while jobs must be the focus, "at the same time, we have to send a signal that we get it about these huge deficits."

Nobody pointed out that in the year since Obama took office and the stimulus passed, the deficits have exploded and so has unemplyment. But at least they're gettingt ready to send a signal next year that they "get it."

Katie Couric may be getting a taste of her own populist medicine. When the Dow hit 10,000 last October, she (and other network news personalities) used the opportunity to bemoan massive payments to Wall Street bankers. But now the populist sentiment has turned on her. She faces dramatic pay cuts as CBS News downsizes.

Couric, shown in a, er, file photo at right, "makes enough to pay 200 news reporters $75,000 a year! It's complete insanity," one CBS News insider told the Drudge Report. "We report with great enthusiasm how much bankers are making, how it is out of step with reality during a recession. Well look at Katie!"

The employee was referring to Couric's roughly $14 million annual salary, the highest in network news. That salary may be cut dramatically in the face of massive layoffs at CBS News branches in Washington, San Francisco, Miami, London, Los Angeles and Moscow.

CBS News has been one of the most outspoken networks against massive Wall Street bonuses and executive payments. The "Early Show" hosted economist Peter Morici late last year to whine that "it's absolutely unfair for Wall Street to be paying itself record bonuses. The taxpayers made these bonuses possible by loaning Wall Street money at near zero rates. This is all quite unseemly and inappropriate."

Couric herself has also been critical on occasion. She said last year, "Pick up today's Wall Street Journal and you'll read banks and securities firms are on track to pay their employees record amounts this year. And, you pick up The New York Times and you'll see some workers are being forced to take huge pay cuts."

Days later, she recounted on Evening News that "Taxpayers all over the country were outraged when they heard that companies they helped bail out turned around and gave their executives huge bonuses."

Couric probably would have been better off staying away from criticisms of executive bonuses. Her $300,000 per week salary was sure to raise eyebrows in the event of layoffs.

Maybe as a rule of thumb, multi-millionaires should just avoid inciting class warfare, for their own sake if no one else's.

The White House continues to throw out random numbers in their quest to convince the public that their behemoth stimulus bill is saving jobs at a massive rate.  The confusion has even seeped into the President's biggest support group - the media.

CNN recently announced how the stimulus plan funded nearly 600,000 jobs this past quarter.  In their article, which parrots the numbers provided by the administration's Recovery.gov Web site, CNN hints that these figures may actually be low, in that they do not include jobs created 'indirectly' (emphasis mine throughout):

"It does not tally jobs created indirectly through companies buying supplies for stimulus projects, people spending their tax cuts, increased unemployment benefits and the like."

Would adding the number of indirect jobs have provided a boost to the stimulus numbers?

Not quite, according to a source CNN can likely trust - themselves...

Two days prior to the above article, CNN ran a piece about the nation's first stimulus project, in which they similarly define indirect jobs as being created in the following manner:

"...supplying the steel, pouring the concrete and boosting the local community's economy."

However, the article points out that federal officials had estimated that the project would create 220 of these indirect jobs.  This despite a statement from agricultural economist, Michael Sykuta, who surmises "that a single construction job normally spins off two or perhaps three indirect jobs at most."

An expert claims that 3 jobs are created indirectly at most, and the feds somehow estimate 220 - a mere increase of over 7,000%.  Embellish much?

Thus, reporting of the addition of indirect jobs created or saved is nearly as futile an effort as calculating those directly created or saved. 

Case in point, the numbers being touted by that first stimulus project.  In it, the administration provides an educated guess of 30 jobs created.  Now the Recovery.gov site is using a mathematical formula to determine that the project created or saved 24.69 jobs.  But the contractor involved in the project estimates that the number of jobs saved was 10.

Review that last paragraph for a moment.  Not only are the numbers trending downward, but the terminology involved is designed to drive the numbers upward.  Here is the transformation simplified:  30 created → 24.69 created or saved → 10 saved.

All of this is moot really, as the AP has already reported that tracking jobs created or saved via the new White House method would be impossible.  Impossible.  So why would the media report these dishonest job announcements from the White House, touting calculations that have already been proven an impossible mathematical feat?

Making things even more confusing are that the 600,000 jobs cited for this quarter are actually inflated by including jobs from the previous quarter.  As the AP reported:

"Recipients of recovery money no longer have to show that a job would have been lost without the stimulus help, and they no longer are required to keep an ongoing tally of jobs saved or created. The new rules allow stimulus recipients to limit the job tally to quarterly reports, making it impossible to avoid double-counting a job that was created in one quarter and continued into the next."

Furthermore, the quarterly job report mentions nearly 600,000 jobs funded, coinciding with the AP report that the calculations will no longer count jobs saved or created, but only jobs funded.  Yet, the White House Web site continues the dishonest theme by continuing to list them as jobs 'created'.

Created, saved, funded.  Double-counting directly or indirectly created jobs. 

The Obama administration's smoke and mirrors tactics continue.  Change they should be embarrassed by...

Photo Credit:  Cleveland Plain Dealer

On Wednesday's Countdown show on MSNBC, shortly before the beginning of the State of the Union address, as Keith Olbermann discussed the speech with Chris Matthews and Rachel Maddow, after Olbermann brought up the possibility that President Obama would give a divisive FDR-style speech, Matthews seemed to lament that such a speech would "spook" the middle class, and, as he credited the Democratic party with actually "creating" the middle class, he argued that Democrats are a victim of their own success.  After claiming that it would have been "unpatriotic" not to increase government spending in time of recession, he went on to describe President Obama's economic policies as "conservative": "Everybody who studies economics knows if you have no business spending, no consumer spending, the government has to spend. That is reasonable and I would argue conservative economics."

At about 8:57 p.m., after contending that President Herbert Hoover "proved to every single American that the Great Depression was Republican doing," Matthews made his extraordinary claim about Democrats "creating" the middle class:

The Democrats -- through the Great Society, through the New Deal, through the New Frontier -- created a middle class through student loans, through Social Security, through job program protections, everything that they did was to create a middle class. ... Today if you try to talk like Roosevelt, you’ll find the slightly better than middle class people saying, “My God, he’s coming for my money to pay for the people slightly below middle class.” And I’m telling you that’s the problem. The Democrats ... suffer from what they gave to the American people, which is a middle class. And you can’t rabble rouse with the middle class in this country or they will get spooked.

It was about 9:02 p.m. that Matthews characterized President Obama's economic policies as "conservative":

I don’t think you could objectively say he’s been too liberal. He was stuck with a terrible economic situation that he had to operate against. And if he hadn’t, it would have been unpatriotic. And everybody who studies economics knows if you have no business spending, no consumer spending, the government has to spend. That is reasonable and I would argue conservative economics. You have to do it. Unfortunately for him, the public relations looks bad because he has a $1.3 trillion deficit as a result of doing what he had to do.

Below is a transcript of relevant portions of the Wednesday, January 27, Countdown show and State of the Union coverage on MSNBC:

8:57 p.m.

KEITH OLBERMANN: Will there be big themes, big words? I mean, you heard that Roosevelt clip that I played earlier from 1936. Anything like that? Is this the time for soaring speech?

CHRIS MATTHEWS: Keith, you make me think. And I loved Roosevelt in ‘36, and he spoke at Franklin Field and gave that great speech, and I have to tell you that one at Madison Square Garden you quoted from was wonderful. They may change again. One is really important. Hoover was in office under Republicans for four years and proved to every single American that the Great Depression was Republican doing. It was totally their fault, nobody could walk away, so by the time it was 1936 you had 70 Democratic Senators on the way to 76 Democratic Senators. One party had taken the complete responsibility for the Great Depression. The other party was clean-handed. And that’s why the President could be that divisive effectively.

The second thing is – and this is one of the great ironies of the life you and I lead and have benefitted from – the Democrats through the Great Society, through the New Deal, through the New Frontier, created a middle class through student loans, through Social Security, through job program protections, everything that they did was to create a middle class. And now we have one. We didn’t have a middle class in ‘36. We had working poor people and a few very rich. If you wanted to start a fight, you definitely start a fight the way Roosevelt did. Today if you try to talk like Roosevelt, you’ll find the slightly better than middle class people saying, “My God, he’s coming for my money to pay for the people slightly below middle class.” And I’m telling you that’s the problem. The Democrats benefit, I’m sorry, they suffer from what they gave to the American people, which is a middle class. And you can’t rabble rouse with the middle class in this country or they will get spooked.

...

9:02 p.m.

OLBERMANN: Well, Chris, that begs the question that is, I guess, at the heart of this, the idea of the President’s, if it’s not failings it’s lack of the success he wanted and so many who saw him elected wanted, is that the result, and have they concluded in the White House which the answer is, is that the result of him being too liberal in the last year or too conservative?

MATTHEWS: Well, I don’t think you could objectively say he’s been too liberal. He was stuck with a terrible economic situation that he had to operate against. And if he hadn’t, it would have been unpatriotic. And everybody who studies economics knows if you have no business spending, no consumer spending, the government has to spend. That is reasonable and I would argue conservative economics. You have to do it. Unfortunately for him, the public relations looks bad because he has a $1.3 trillion deficit as a result of doing what he had to do.

Is the luster finally wearing off the love affair between the White House press corps and President Barack Obama? It is, if CBS White House correspondent Chip Reid's analysis of President Barack Obama's latest Wall Street proposals is anything to go by.

Reid appeared on the Fox Business Network's Jan. 25 "Imus in the Morning" program and offered an update on the president's financial and economic advisers, mainly Treasury Secretary Timothy Geithner and Director of the National Economic Council Lawrence Summers. He said both Geithner and Summers should survive, despite a run-in with former Federal Reserve Chairman Paul Volcker, who chairs the President's Economic Recovery Advisory Board.

"Well, you know, it's really the same as it's all been," Reid said. "That there's some unease about both of them, but the President has been satisfied with the jobs they've done. Behind the scenes, they both still have a lot of control. They lost this battle to Volcker, but now they're on board on this new plan for Wall Street, although it really sounds more like politics than a real plan because it's hard to believe it would get through."

According to Reid, Obama's decision to be vocal about policing Wall Street and the banks was politically motivated, and its potential impact on the economy.hadn't been thought through.

"You know, they're just looking for ways to grab this populist tone that he wants to have and beat up on Wall Street," Reid said. "But you know, and then they get home and they realize after giving a speech like that that the stock market goes down when you do things like that. You just can't beat up on Wall Street constantly for political purposes and expect nothing, nothing but good things to happen."

The Obama administration is at a fork in the road according to Reid, and the president has to decide whether or not to lurch further in one direction with certain policies or back off and moderate.

"So they are really in a moment here where they're just trying to figure out where they're going," Reid said. "Do they go - the president when he gave that town hall on Friday sounded like he was doubling down on health care. But you know, a lot of people even in the administration believe it's time to back off and pull out the most popular elements, try to pass something, but don't try to pass this whole big giant package down people's throats. But there are a lot of people on Capitol Hill and some in the White House would like to do just that."

After Obama's announcement on Jan. 22, stocks took a nose dive. The Dow Jones Industrial Average (DJIA) sank 552 points over the course of three days following his strong rhetoric about the banks.

Poor Joe Klein wishes he could give a lecture to average Americans -- the "Too Dumb to Thrive" who probably don't read his magazine's Swampland blog anyway -- on the virtues of Obamanomics.

Of course, they'd probably be too stupid to understand the enlightened Mr. Anonymous, especially Fox News viewers.

Indeed, at least in Klein's mind, these alleged ignorant boobs are practically an existential threat to democracy itself (emphasis mine):

Absolutely amazing poll results from CNN today about the $787 stimulus package: nearly three out of four Americans think the money has been wasted. On second thought, they may be right: it's been wasted on them. Indeed, the largest single item in the package--$288 billion--is tax relief for 95% of the American public. This money is that magical $60 to $80 per month you've been finding in your paycheck since last spring. Not a life changing amount, but helpful in paying the bills.

[...]

It turns out that what people are really upset about is all that wasteful money that has gone to political public works projects...except that the overwhelming portion of that money hasn't been spent yet.

[...]

So, two thoughts:

1. The Obama Administration has done a terrible job explaining the stimulus package to the American people...especially since there have been very few documented cases of waste so far.

2. This is yet further evidence that Americans are flagrantly ill-informed...and, for those watching Fox News, misinformed.

It is very difficult to have a democracy without citizens. It is impossible to be a citizen if you don't make an effort to understand the most basic activities of your government. It is very difficult to thrive in an increasingly competitive world if you're a nation of dodos.

It's amazing how Bernard Condon and Tim Paradis of the Associated Press managed to hang the same label on totally opposite political positions in their report on the situation in the stock market late this afternoon.

According to the AP pair, Scott Brown's U.S. Senate win in Massachusetts was due to a "wave of populism," at the same time as President Obama is supposedly planning to use "populist attacks" to save his party's congressional majority in the fall elections. One of those employments of "populism" has to be wrong.

Additionally, they write that it's Scott Brown's type of populism that caused investors to sell heavily in the middle of last week, but that it's Barack Obama's type of populism that caused it to plunge even further during its remainder.

Got that?

Look at the bright side: As you'll see, the wire service at least got the headline right.

Here are the first five paragraphs of the AP pair's schizophrenic report, followed by a few later ones (bolds are mine):

Obama share scare: Market drop shows vulnerability

It was the fat cats' fault before. But now it's becoming Obama's.

With the unemployment rate stubbornly high, people were already shifting blame for their economic woes to President Barack Obama one year into his presidency. Last week, investors joined them.

For 10 months, the stock market climbed at breathtaking speed. But the Dow Jones industrial average suffered its worst week since dropping to a 12-year low in early March. It fell 552 points Wednesday through Friday, including 216 on Friday.

One big reason investors scrambled to sell: Fear over a wave of populism that swept a Republican to an upset victory in the Massachusetts Senate race on Tuesday. When Obama responded on Thursday with a broadside against big banks, the market plunged. On Friday, investors feared mounting opposition in the Senate could derail Federal Reserve Chairman Ben Bernanke's reappointment. Disappointing corporate earnings and concern that China will slow its economy added to the jitters.

The question now: If the bad news continues, will Obama, who is trying to win votes in the fall elections with his populist attacks, end up losing them instead? Put another way, can Obama win over Main Street by vilifying Wall Street if people fear opening their 401(k) statements again?

Last Tuesday after the Martin Luther King Jr. holiday, the indexes hit 18-month highs in anticipation of Republican Scott Brown's likely victory in the race to replace the late Sen. Edward Kennedy's seat in Massachusetts. Health insurance and pharmaceutical companies led the gains because a Brown victory endangers the massive health care bill favored by Obama and the Democratic majorities in Congress.

But stocks began falling fast on Wednesday when China announced plans to slow its economy. They fell again the next day after Obama's speech calling for limits on the size of banks and their risk taking.

The coup de grace for the market came Friday. In a nod to voter anger at Wall Street, a few Democrats said they wouldn't vote to reappoint Bernanke, whose term ends Jan. 31. But many investors have faith that Bernanke has the tools, the know-how and the political backbone to reel in the unprecedented amount of money pumped into the economy during the financial crisis and avoid a crushing round of inflation.

How Condon and Paradis can alternatively blame Brown for both the market's Tuesday rise and its fall during the remainder of the week (strongly implied in the fourth excerpted paragraph) is quite a mystery.

How the pair can call both the Brown campaign's positions (which included a ringing denunciation of the "Bank Responsibility Fee" the president proposed the previous week) and Obama's attacks on the banks "populist" at the same time. My suggestion: Brown reflects a genuine form of populism that wants the states and the people to have more control over their lives, and the federal government to have less, while Obama's "we want our money back" rhetoric and his desired limits on what banks can do and how big they can be -- limits that can't be imposed on the rest of the world and would likely make U.S. banks less competitive in the world marketplace -- is sheer demonization and demagoguery that has nothing to do with genuine populism.

The "blame Ben Bernanke" gambit being undertaken by some senators has little or nothing to do with "voter anger at Wall Street"; if there's major evidence of that, I haven't seen it. It is instead an attempt to distract the public from the truth about who is really responsible for the housing, mortgage-lending, and general financial services messes that came to a head in the summer and fall of 2008. That list of the blameworthy, not necessarily in order, would include Fannie Mae, Freddie Mac, Timmy Geithner, Henry Paulson, Nancy Pelosi, Harry Reid, the Congressional and Senate majorities, and Democratic Party-inspired legislation going back decades such as the Community Reinvestment Act. If Big Ben even belongs on the list, he would be at or near its bottom.

Towards the end of their report, Condon and Paraidis threw out this howler:

The vote in Massachusetts scared all incumbents. It's now every man and woman for himself or herself in Washington.

Give, me, a, break. All incumbents? Who can possibly believe that sensible, principled conservatives like Jim DeMint or Tom Coburn have been quaking in their boots during the past week because of Scott Brown's win?

Cross-posted at BizzyBlog.com.

Rush Limbaugh is so reviled by the left, that even when he agrees with liberals and issues facts supporting their arguments, they criticize him and demand an apology.

The latest such group to deride Limbaugh for supposedly offensive comments that they themselves have supported is the Anti-Defamation League. The ADL has called on Limbaugh to apologize for suggesting that the Obama Administration's anti-banker populism has troubling anti-Semitic undertones. He did not suggest that Obama is an anti-Semite, nor that is policies specifically single out or target Jews. He did suggest that Jews who voted for Obama may be feeling "buyer's remorse" now that the administration is using language that has so often--historically--been used to demean and discriminate against the Jewish community.

Here is the quote in question: "To some people, banker is a code word for Jewish; and guess who Obama is assaulting? He's assaulting bankers. He's assaulting money people. And a lot of those people on Wall Street are Jewish. So I wonder if there's - if there's starting to be some buyer's remorse there."

The ADL was furious at Limbaugh, and issued a press release saying he "reached a new low with his borderline anti-Semitic comments about Jews as bankers, their supposed influence on Wall Street, and how they vote."

To the latter claim, Rush was not speculating about how Jews voted in 2008; it is a fact that they overwhelmingly supported Obama. According to Jewish news service JTR, "Obama received 78 percent of the Jewish vote - about 25 percent greater than Obama's percentage of total support nationally." So the ADL has no grounds for criticism here.

But ADL demonstrated profound hypocrisy in criticizing Limbaugh for simply recounting stereotypes of the Jewish community used throughout history as the basis for often violent campaigns against Jews. ADL itself has recalled these stereotypes since the beginning of the financial crisis in lamentations that the crisis had given "fodder" to bigots who were quick to lay blame for the nation's economic woes at the feet of Jewish bankers. History is replete with such shows of hatred and ignorance.

ADL lamented that Bernie Madoff's exposed $50 billion ponzi scheme had "given anti-Semites fodder for their bigoted views." ADL President Abe Foxman echoed this statement, telling MSNBC that the Madoff scheme had become "fodder for the bigots."

In discussing the financial crisis more generally, Foxman wrote, "concerns arose about possible anti-Semitic reactions. Our antennae were up because the most prominent elements of anti-Semitism are the charges that Jews have too much power and they are primarily concerned about money."

So, basically exactly what Limbaugh said.

Big Journalism's Ben Shapiro notes the utter hypocrisy in ADL's criticisms:

It is obvious that Obama's hatred of "bankers" can clearly be construed by anti-Semites as coded language indicting Jews. It's no more ridiculous to suggest that Obama's emphasis on "bankers" is code that will embolden anti-Semites than to suggest that Nixon's emphasis on "states' rights" was code designed to embolden racists, as so many leftists do.

Indeed, while the notion of States' Rights is fundamental to the system of federalism institutionalized by our nation's Constitution, it has been perverted by those who would invoke the rights of the states to perpetuate racism, segregation, and subjugation. So too is Obama's populist language rooted in a sincere, if misguided, distrust of the wealthy. But like the language of states' rights, Obama's anti-banker rhetoric can be--and has been--co-opted by anti-Semites who use it as political cover for their hatred of the Jewish community.

Shapiro adds,

And many Jews, indeed, have adopted some of Obama's terminology. It is hardly anti-Semitic to say, as Rush does, that Jews have picked up on Obama's borderline lingo. In fact, Rush's statements are precisely the opposite of anti-Semitic, as Foxman and the ADL should recognize - Rush is indicting those who would seize on Obama's "bankers" language to hurt Jews. And he is indicting Obama for using such incendiary language...

The Jews don't have many friends outside the conservative movement in the United States. When Foxman attacks those friends, he endangers Jews far more than he protects them. And that is a betrayal of his mission and the trust that so much of the Jewish community has placed in him.

Limbaugh has managed to engender criticism even from those with whom he agrees and whose causes he champions. The average person couldn't do that.

Two Democrats on Sunday blamed the soaring budget deficit on George W. Bush, and ABC's Terry Moran didn't challenge either one of them.

First up on "This Week" was senior White House adviser David Axelrod who told substitute host Moran, "President Clinton left a $237 billion surplus, President Obama received a $1.3 trillion deficit."

Moran didn't challenge this, nor did he press Sen. Robert Menendez (D-N.J.) when he uttered virtually the exact same Democrat talking point moments later, "When George Bush came to office, he had a $236 billion surplus; Barack Obama was handed a $1.3 trillion deficit."

Here's how a REAL journalist might have responded the second time somebody made the same stupid comment in the course of about 15 minutes:

• On March 14, 2008, then Sen. Obama voted in favor of the 2009 budget which authorized $3.1 trillion in federal outlays along with a projected $400 billion deficit. The 51-44 vote that morning was strongly along party lines with only two Republicans saying "Yes."
• When the final conference report was presented to the House on June 5, not one Republican voted for it.
• This means the 2009 budget was almost exclusively approved by Democrats, with "Yeas" coming from Obama, his Vice President Joe Biden, his Chief of Staff Rahm Emanuel, and his Secretary of State Hillary Clinton.
• On October 1, 2008, Obama, Biden, and Clinton voted in favor of the $700 billion Troubled Assets Relief Program designed to prevent teetering financial institutions from completely destroying the economy.
• In February, 2009, a $787 billion stimulus bill was passed with just three Republican votes, and later signed by Obama.
• Weeks later, Congress approved and Obama signed $410 billion of additional spending.

Add it all up, and Obama approved every penny spent in fiscal 2009 either via his votes in the Senate or his signature as President.

"Journalists" like Moran should know this, and should challenge anyone that says otherwise. When they don't, they look like White House stooges. 

Nice job, Terry. If your appearance on Sunday's "This Week" was an audition to eventually replace George Stephanopoulos as permanent host, you failed miserably.

On the other hand, if ABC is looking for someone to be just as liberally-biased as Stephanopoulos, and just as unwilling to challenge Democrats when they utter non sequiturs, Moran passed with flying colors.

During the 2008 presidential campaign, Americans were treated to a number of populist sermons on the "special interests" who would oppose "reform" at any cost to maintain the "status quo" from which they "profit financially or politically." The drug companies, the energy companies, the Wall Street bankers, and the health insurers were the corporate enemies of a just and harmonious America, or so one might have gathered.

Obama was at the vanguard of this populist charge. But since his election, he has proposed health care legislation that would subsidize Pfizer and PhRMA, a cap and trade plan that would drive profits to General Electric, and Wall Street bailouts that lined the pockets of the same Goldman Sachs bankers he so reviled during the campaign. What happened?

Washington Examiner columnist Tim Carney exposes and investigates this monumental disconnect in his new book "Obamanomics: How Barack Obama is Bankrupting You and Enriching His Wall Street Friends, Corporate Lobbyists, and Union Bosses." Carney explores the "political strategy of partnering with the biggest businesses in order to create new regulations, taxes, and subsidies." Those measures, he argues, actually benefit the biggest businesses by crowding out competition, consolidating market share, or giving billions in subsidies directly to those companies.

To the chagrin--though hardly the surprise--of many conservatives, very few members of the media raised questions about the blatant contradictions between Obama's "little guy" attitude during the campaign and his support for the behemoths of big business as president. Few have noted his tendency to demonize opponents as lackeys of some large corporation, when in fact the Goliaths of the private sector are on board with his agenda, standing as they do to to make billions from it.

With thorough research to back him up, Carney goes where the mainstream media will not, exposing the cronyism, hypocrisy, and economic damage that Obamanomics entails. In his interview with NewsBusters, Carney discusses his "free market populism", the failure of Republicans to live up to their own ideals, and his routine debunking of myths peddled by the liberal left. (Full disclosure: I was a summer intern at the Examiner and worked with Carney on multiple occasions.)

NEWSBUSTERS: You hear, especially from Tea Party folks, the word socialist get thrown around a lot. But what you're describing, it's certainly not socialism because it works sort of within the framework of capitalism. Do you think the debate would be more honest maybe if it were actually a socialist capitalist dichotomy?

TIM CARNEY: Oh yeah. I always tell my liberal friends, I wish that we were debating about a single payer vs. a free market health care. Instead, we've got two different kind of mixed economies. Something like the current status quo of health care, against an individual mandate where the government is requiring us to buy health care. Or on global warming, what Obama pushes is not some vast strict regulatory regime, it's a cap and trade plan where people can get rich off of gaming the system right, maybe doing what the government wants them to, but special carve-outs get written in.

So calling Obama a socialist is off the mark. Saying that he believes in government control of the economy is accurate, but he still believes in sort of harnessing the power of profit and loss, and having the government kind of steer that ship while business does the driving. That's what I mean by Obamanomics is, it's big business together with big government changing the shape of the economy.

NB: And obviously the price of that, as you point out, is that small businesses get crushed under the regulatory weight--

CARNEY: They get crushed because they can’t afford to comply with the regulations in the way the bigger guys can. The example I give in the book is Wal-Mart wanting an employer mandate on health care. A smaller retailer can’t necessarily provide the health care the government mandates, Wal-Mart can. That's their best thing is using their economies of scale to get a lower price for something.

But also smaller businesses can't afford K Street lobbyists who make sure that the little details in the bill are beneficial to them or who know how to comply exactly with it, or who tweak the regulations, or who can go and actually get the handout being given. So the cost of regulation is one reason why big business benefits often from regulation, but the need for a lobbyist is another reason why small business is the biggest victim because they can't always afford a lobbyist.

NB: It's very hard to reconcile what the president has done with his rhetoric during the campaign, and even his rhetoric now, he was stumping for Coakley, and he's talking about how 'we don't need another big business senator in Washington'. The way you describe it, Obamanomics is a necessary consequence of Obama's agenda, not necessarily how he would have set out to accomplish that agenda.

CARNEY: Well, let me put it this way. What I'm not saying, and I write this explicitly in the book, what I'm not saying is that Obama is bought and paid for by special interests. You could look at all the money he got from Wall Street and the drug makers and look at how the drug makers benefit from health care reform and Obama likes all the bailouts and say, okay he was bought and paid for, but that's reading into his heart and mind and that’s just not something you can do from available evidence is know what his actual intentions are.

I’d say there are two reasons why Obama ends up teaming up with the likes of Goldman Sachs and Pfizer. The first is tactical necessity. He needs allies in his efforts to make these broad changes, whether it’s Wall Street, health care, the environment, etcetera.

The second is the economic laws that I was discussing earlier. Big government will inevitably benefit big business. A caveat there: a giant communist steamroller will crush big business. A single payer plan will crush big business. But the big government of the sort Obama is willing to do, a left of center big government, that will inevitably help big business. So you can even imagine Obama believed he was going to run the special interests out of town, and then he starts erecting his, you know, his health care reform, his cap and trade, and all of a sudden the big businesses come flocking going 'we love it! tweak this, tweak that, and we'll make profit.' And he might have been a bit surprised, but I don't think so considering that he raised more money form Wall Street than any candidate ever, he raised more money from the drug industry, from the health insurance industry, and even from the oil industry, than any candidate ever. I don't think he was surprised by the big business embrace of his agenda.

NB: You I think refer to it as 'the big myth' in the book, sort of a useful myth, that even people who knew that Obama would not be this savior and stand up to big business and lobbyists, people like Paul Krugman would peddle this myth as a way to give Obama some populist appeal.

CARNEY: Yeah, and the heart of the myth is that if it's big government, than it's anti-big business. That's the Krugman line. That's to some extent the Thomas Frank line. And now you’re seeing it again with Wall Street. 'Oh well Scott Brown's with Wall Street because he opposes this regulation.' Well, look at who the top Wall Street lobbyist is right now, it's a man named Thomas Nides, I talk about him in the book. He's a Morgan Stanley banker, who comes from Fannie Mae, we know what Fannie Mae was. Fannie Mae was sort of a money laundering operation for politically connected Democrats. The top lobbyist maxed out to Barack Obama, maxed out to Rahm Emanuel. These are the Wall Street lobbyists he pretends he's taking on. And I looked at the other WS lobbyists, they all have four, five, six visits to the white house.

So Obama comes in, he says he's battling Wall Street, but he doesn't name who he's battling. He proposes regulations, and then, the next step, the unstated major premise here, is that business always wants to be deregulated. And so then he gets to tar his opponents as being the stooges of business even though there's no evidence right now that Wall Street is opposing regulation. They're opposing the rough idea of a big bank tax. And I promise you, just like you saw the health care reform get brought around to be exactly what the drug makers wanted, and some of what the health insurers wanted, you'll see the Wall Street regulation end up being the sort of thing that protects the big banks by keeping out smaller competitors.

NB: With yesterday's election [US Senate in Mass.], all the columnists are saying this is a repudiation of, well, cronyism seems to be the way everybody's describing it. Do you read it as voters sort of waking up to Obamanomics?

CARNEY: I think part of it is certainly the unseemly deal making. My wife said to me last night, 'every politician promises to be transparent. Why did we believe Obama?' The point is we did. Even those of us who opposed all his policies, we thought, well maybe, maybe he'll be something of a reformer. My friend and now my colleague at the Examiner Dave Freddoso, his book last summer, 'The Case Against Barack Obama', said no, Obama has no record of being a reformer, so if he does come into the White House and sort of cleans stuff up, and ends the game playing as he said, that would be a change. And the change didn't happen. Obama's kept being the politician that he was. And I don't think he's a corrupt politician, but he's a politician, and politics is inherently a bit corrupt; I mean its deal-making, its compromise.

And this union carve-out on the health care bill, it’s probably a moot point, but it’s still a great moment. And it might have been a big moment in tipping the race to Scott Brown in Massachusetts because it said, 'we're going to raise taxes on people, unless you're in a labor union', which, the labor unions are the major political force driving the Democratic majority. And, guess what, if you're thinking about joining a union, well now you have that much more incentive because you get an automatic tax cut by joining a union. And so it was this, on the surface, dirty deal, and I think that'll stick in people's minds. Some of what I talk about, the deals with the drug company, really stuck in the minds of the left I think, when he cut a deal with Billy Tauzin to advance the drug bill. Some of the other stuff I talk about is more behind the scenes, I try to draw it out, but that labor union deal, that was right out there in the open, and I think that that might be turning a lot of voters off.

NB: Obama has suggested that during and after the State of the Union, there's going to be a shift towards deficit reduction, more fiscal hawkishness. And deficit spending seems to have been a big driver of Obamanomics, because you can pretty much give handouts at a whim, so, in short, do you see an end to any of this?

CARNEY: I'm not going to predict what Obama's going to do, but I’ll say this: I think it would be very difficult for him to get out of the game of picking winners and losers. Even if he’s going to talk bout deficit reduction, he's going to try to do it in a way where he's deciding who the winners are, who the losers are.

He still has to push some environmental thing and a health care plan and I think Barack Obama believes that men of intelligence and good will sort of should be steering the ship of state, and getting away from Obamanomics would be his sort of eating some humble pie, you know maybe reading some Hayek or something and giving up the fatal conceit and walking away and saying 'what I need to do is actually clamp down on government overspending, actually clamp down on special interests influence.' But what that's about, it's not fun, it's not saying 'we're going to go to the moon, we're going to build the Great Wall of China.' It's saying, we're going to get the government to stop doing things they shouldn't be doing.

NB: It's very natural for politicians to want to say 'we're going to do this, we're going to give you this.'

CARNEY: And there's something about it that compels you to promise to do that. I mean, Ron Paul gets away with not doing that, but in some ways that's become revolutionary. I always say if I ran for congress I would promise to not bring home any pork, not build any federal buildings and I would not create a single job. I don't think that would fly.

That's part of why Republicans I think fell into the big government trap, was it was job creation big government, it was pro-business big government, that was a lot of the Republican big government stuff, because politics has a pro-do something bias. The do nothing politician, maybe it doesn't work electorally or maybe the type of people who want to run for office are the busybodies.

NB: So you think there's a significant contrast to be drawn? Do you think Republicans can have a viable platform considering how upset people seem to be with Obama, in saying 'the government needs to do less'?

CARNEY: I'm not confident that Republicans will do that, but I still think it's possible. I do lay out in the last chapter of Obamanomics something of an agenda for Republicans, what I call free market populism, where they should try to go ahead and roll back the bailouts, make sure they block health care reform and the global warming stuff, and go after corporate welfare wherever it is. And Obama will agree with them on some of it, and will stick up for corporate welfare programs and that's just great politically.

So go after export/import bank. It's a government agency nobody's heard of, I write about it all the time, but it just subsidizes Boeing, is basically what it does. So let's say 'let's get rid of it' and let Obama and Patty Murray take the side of Boeing. Let's go after the Federal Reserve. Why is there a federal reserve? I’d like to abolish it, if not abolish it at least make it feel very uncomfortable by drawing its work out into the open.

There's all sorts of things that Republicans could do, but the reason that I’m not confident is you still have the heads of the Republican party in both chambers are pro-bailout guys, these are guys who supported the Medicare prescription drug act, these are not guys who have a real attachment to limited government, and they are Republicans who do have an attachment to the business lobby, which, as I lay out in this book and in all my columns here at the examiner, the business lobby is not a pro-free market lobby. They are a pro-profit lobby.

NB: Getting a little more specific, and since I'm writing for NewsBusters I have to ask, you write about MSNBC being owned by GE, and sort of the obvious conflict of interest that that presents, and you stop short, and you note that you stop short of saying 'well, obviously MSNBC is shilling for GE's agenda under the guise of news.' And you say you don't really have to go that far because of this blatant conflict of interest. So, do you think--

CARNEY: You’re asking if I am willing to go little bit farther?

NB: Yes, exactly.

CARNEY: I think that the Green Week that NBC does on all of its stations is the worst. That’s the one that, every time it happens, it feels like this is shilling for the Ecomagination products that GE makes. The one time I saw Jeff Immelt go on CNBC and talk about GE products and not disclose that GE was the parent company of CNBC, he was talking about smart meters as part of the Green Week project, and that's the sort of thing, the whole green racket is so much about trying to pretend that at the same time you're being environmentalist and capitalist, while really you're being neither. You're a subsidy suckler who might not be doing anything for the environment. Now I like smart meters, they're one thing I could get excited about. But that's the one case where they're really trying to hype up the idea that greenhouse gas emissions are really threatening us, a groundswell for legislation that causes their profit. That's the one thing where I really do feel that they're acting improperly. I mean, you would never send a reporter out to cover the case in which he's been charged with a crime.

My broader point is, Obama is GE's whole story; they are the for-profit arm of the Obama administration. Obama says embryonic stem cells, GE starts an embryonic stem cell line. Obama says high-speed rail and freight trains, GE goes ahead and hires Linda Daschle to be their lobbyist in that. Obama says health care reform, GE launches a line of health care imaging, MRI-type things. Obama says global warming, GE is all over that creating greenhouse gas offsets already, something that only gets a real value once cap and trade passes. And GE spends more on lobbying than any company in America. When you put that all together, you see the success of Barack Obama is the success of General Electric, so that's where the conflict of interest is just utterly glaring.

GE is lining up to sell NBC to Comcast, which I think is good in removing a lot of that conflict of interest. They'll still have a stake, but it won't be a controlling stake. But of course you know what the Comcast CEO does? As soon as Comcast is buying the TV stations, the Comcast CEO comes out for health care reform, so it's just, it's still murky.

I do enjoy drawing out in the book the Rachel Maddow, Keith Olbermann rants based on the big myth. Maddow went on a rant about how you've got Dick Armey from FreedomWorks helping to push the resistance to health care over the summer. Meanwhile, he was a lobbyist at a firm called DLA Piper whose biggest client was a drug company called the Medicines Company, a drug maker. And so Maddow connects the dots and tries to say 'now we see that it's really the drug companies that are trying to undermine reform.' Drug companies love this bill; they spent $100 million advertising in favor of it. The drug companies already cut a deal, and Medicines Company just stuck into the provision, and maybe its dead now, but they stuck into the bill a provision that would give them a billion dollars in added revenue. So they're not opposing the bill. And then I also have an Olbermann thing in there where he rants, gives half the numbers. That Olbermann would be misleading and dishonest is not news.

NB: Certainly not to NewsBusters readers. Wrapping up with a much more general question, in the last chapter, the speeches that I assume you wrote, you know, if only John McCain had said this during the campaign. I got chills when I was reading those, thinking 'oh man that would have been so great.' But there are even people on the right who would read that and go, 'wait minute, no TARP? No bailouts?' That on both sides of the aisle was seen as a very key step to recovery, and obviously was put in motion by a Republican president. So sort of a 2-part question: it seems that a lot of this free-market populism is, even among conservatives, somewhat esoteric. And then, more generally, what would your path to recovery have looked like?

CARNEY: Yes, the majority of Senate Republicans voted for the bailout, I think about half of the house Republicans voted for the bailout, and I think that at that particular moment, it was as if Ben Bernanke and Hank Paulson had a gun to the head of everybody in America, going 'get in the car! get in the car! we don't have time to ask questions!' and so some of them I don't blame for it. It was the more free market guys--the Paul Ryans, the Eric Cantors, the Tom Coburns--who should have known better, who should have been able to say 'stop! Government rushing for huge, dramatic, radical change is probably a bad thing.'

And now they say, 'oh well it became a slush fund and we didn't intend that.' That sounds just like the Democrats saying, 'oh, well we voted for the Iraq war but we didn't intend for it to become like this.' It was an abdication of responsibility by Republicans to vote for that bill and I think that the Republican Party would be stronger if their leaders who voted for it came out and admitted that it was a mistake, but they haven't done that. I mean I almost feel like it should be like the Civil War, where if you voted for the bailout you would lose your ability to be a party leader.

But what would I have done? I mean, there are all sorts of proposals that could have been done… There were structured bankruptcy plans that were floated, they were all a lot more modest, a lot more humble, and they all accepted the fact that there would be a serious short-term evaporation of lending. And that's the sort of thing that a conservative should be able to deal with, that very short-term pain. The cost of averting the short-term pain is often worse than the short-term pain. It's like if every time you felt a little ache, you made sure to pop some morphine. In the long run, yeah, you might never feel any pain, but in the long run that's not going to do you good.

That's a problem that I think liberals often fall into, that Republicans and conservatives fell into that shows how unrooted they are in a conservative philosophy and in a belief in limited government. This is why I think populism is an important element to this is because what did cause the opposition to the bailout to be so strong, yes you had Reason magazine, you had other people, you had the Cato Institute giving the free market argument, but that's not as convincing as simply saying 'don't take our money and give it to the banks!' I mean Barack Obama now is saying 'we want our money back', I didn't give my money to Goldman Sachs! You took my money and you gave it to Goldman Sachs! And so that sort of thing, the populism is sort of the spirited horse you can ride on to make the free market arguments, and it's more convincing.

Since Republican Scott Brown won the special election Jan 19 to fill Massachusetts' U.S. Senate seat vacated after the death of Ted Kennedy, President Barack Obama and high-level White House staffers David Axelrod and Robert Gibbs have been on the media circuit in damage control mode.

But according to "Fox News Sunday" host Chris Wallace, efforts to spin this in a positive way are futile. Wallace appeared on the Fox Business Network's Jan. 21 "Imus in the Morning" program to explain their efforts to alter the news coverage to a favorable tone in the wake of this news is not the proper course of action.

"I think it means a big deal and I have to laugh, you know, somebody was saying yesterday, there's some events that are just un-spinable," Wallace said. "They're just too big, too dramatic, too obvious - you can't spin them and yet the White House clearly is trying to spin this."

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New York Times columnist Paul Krugman has a brilliant solution for Barack Obama to improve his sagging poll numbers: spend more time blaming George W. Bush for the recession.

"The Obama administration’s troubles are the result not of excessive ambition, but of policy and political misjudgments," Krugman wrote Monday.

"The stimulus was too small; policy toward the banks wasn’t tough enough; and Mr. Obama didn’t do what Ronald Reagan, who also faced a poor economy early in his administration, did — namely, shelter himself from criticism with a narrative that placed the blame on previous administrations."

Don't be surprised if such thinking gets this guy another Nobel Prize (h/t NB reader Jeff):

It’s instructive to compare Mr. Obama’s rhetorical stance on the economy with that of Ronald Reagan. It’s often forgotten now, but unemployment actually soared after Reagan’s 1981 tax cut. Reagan, however, had a ready answer for critics: everything going wrong was the result of the failed policies of the past. In effect, Reagan spent his first few years in office continuing to run against Jimmy Carter.

Mr. Obama could have done the same — with, I’d argue, considerably more justice. He could have pointed out, repeatedly, that the continuing troubles of America’s economy are the result of a financial crisis that developed under the Bush administration, and was at least in part the result of the Bush administration’s refusal to regulate the banks.

Here come's the money shot:

But he didn’t. Maybe he still dreams of bridging the partisan divide; maybe he fears the ire of pundits who consider blaming your predecessor for current problems uncouth — if you’re a Democrat. (It’s O.K. if you’re a Republican.) Whatever the reason, Mr. Obama has allowed the public to forget, with remarkable speed, that the economy’s troubles didn’t start on his watch.

Honestly, in what country does Paul Krugman live, and do they have newspapers, televisions, and Internet access there?

After all, to claim Obama and Company have been remiss in taking every opportunity to blame the recession on the previous administration is as factually dishonest as saying the Washington Nationals won the World Series last year.

Obama's campaign was largely based on pointing fingers at George W. Bush whenever possible, and he and his minions have continued to do so for approaching 365 days since Inauguration Day.

To state anything to the contrary lacks any basis.

Of course, this is by no means surprising, for Krugman has a long and indistinguished history of making things up when it fits his agenda.

Seems to be quite common with today's Nobel Laureates, doesn't it?

Has blatant dishonesty become a prerequisite for this award?

Barack Obama appears to no longer be giving Chris Matthews a tingle up his leg, for the MSNBC host thinks Tuesday's special election in Massachusetts might end up being a reflection of how people are very averse to the new President's program.

With a visible frown on his face, Matthews told "Daily Rundown" co-host Chuck Todd Monday that recent polling data "has to do with reality of a terrible economy, of this new burden that people feel being put on their shoulders of bigger debt, perhaps taxes coming down the road."

Matthews continued, "And the fear that the burden of healthcare is going to be much heavier than the benefit."

The "Hardball" host cautioned, "I think it's going to show up in Massachusetts tomorrow with the results there" (video embedded below the fold with partial transcript, h/t Story Balloon):

CHRIS MATTHEWS: I think it has to do with reality of a terrible economy, of this new burden that people feel being put on their shoulders of bigger debt, perhaps taxes coming down the road, a fear that the bigger debt's going to lead to inflation, a weaker dollar - which it already has - and the fear that the burden of healthcare is going to be much heavier than the benefit. Certainly as we can see it now. And I think it's going to show up in Massachusetts tomorrow with the results there. I think people are very averse to what this program looks like of this new president. They're averse to it right now.  

Wow!

If Matthews is sad now, how's he going to feel if Republican Scott Brown wins? 

The Federal Reserve of Minneapolis has posted a series of charts (HT Ed Morrissey at Hot Air) comparing the current recession -- as defined by the National Bureau of Economic Research, not as normal people define it, a point I'll get to later in this post -- to previous recessions dating back to the end of World War II.

The charts definitely show how utterly wrong reporters like the Associated Press's Jeannine Aversa are when they claim that there has been anything resembling a "rebound" since the economy hit bottom from a growth standpoint in the second quarter of 2009 (the economy has yet to see an employment bottom). They also explain why AP reporter Martin Crutsinger seems to have tired of trying to put a "getting better" face on things in the past couple of days (as seen here and here at NewsBusters; here and here at BizzyBlog).

Here, after screen captures by Morrissey, are the two mind-numbing creations in question, the first showing changes in output (GDP) and the second showing changes in employment:

Together, they could be shown in a continuous loop and named "Nightmare on Main Street."

Now imagine if instead of using the NBER's subjective determination of when this recession began, the chart above had been done using the normally understood definition of two consecutive quarters of economic contraction. In that case, you would shift the "2007" line (renamed 2008, because the recession as normally defined began in that year's third quarter) over by two quarters and six months, respectively. The results would arguably be even uglier.

Morrissey's capsule summary:

The economic policies of the Obama administration have lengthened the recession and delayed what would be the normal recovery process, mainly by signaling to investors and businesses that costs will go up in taxes and energy prices, as well as burdensome mandates on health insurance. As a result, people are not investing their money into job-creating risk but are sheltering their cash instead. 

The Obama administration's "Uncertainty Economy" continues to wreak absolute havoc. Given what the first stimulus hasn't accomplished, any serious attempt at a second stimulus that based on history going back to the 1930s would be just as ineffective will have to call into question whether our government really wants the economy to recover.

In the meantime, I hope the folks at the Minneapolis Fed aren't waiting by the phone for calls from establishment media journalists requesting explanations and clarifications. They'll be pretty lonely if they are.

Cross-posted at BizzyBlog.com.

Okay, who administered the truth serum to the Associated Press's Martin Crutsinger? And will the person who did this kindly inform us when it will wear off?

On Thursday, for the second day in a row following a mostly fact-based report the previous day on Uncle Sam's horrid fiscal situation, Crutsinger ran down a troubling economic report. This time it was December's disappointing retail sales results. The AP writer even took readers on a walk through the historical archives to let them know just how bad December and all of 2009 really were. Pinch me to make sure I'm not dreaming.

Here are key paragraphs from the report:

December retail sales drop 0.3 percent

Retail sales fell in December as demand for autos, clothing and appliances all slipped, a disappointing finish to a year in which sales had the largest drop on record.

The weakness in consumer demand highlighted the formidable hurdles facing the economy as it struggles to recover from the deepest recession in seven decades.

The Commerce Department said Thursday that retail sales declined 0.3 percent in December compared with November, much weaker than the 0.5 percent rise that economists had been expecting. Excluding autos, sales dropped by 0.2 percent, also weaker than the 0.3 percent rise analyst had forecast.

For the year, sales fell 6.2 percent, the biggest decline on records that go back to 1992. The only other year that annual sales fell was in 2008, when they slipped by 0.5 percent. The December drop in sales was a surprise given that the nation's big retailers had reported better-than-expected results last week, reflecting a surge of last-minute holiday shopping. But even with the rebound reported by the nation's biggest chains, these retailers suffered their worst annual performance in more than four decades in 2008, according to data from the International Council of Shopping Centers.

The 6.2 percent fall in the government's retail sales figure is only the second decline on records that go back to 1992. In all other years, even during previous recessions, retail sales, which are not adjusted for inflation, have managed to increase.

Sales at specialty clothing stores fell by 0.6 percent while sales at general merchandise stores, a category that includes big retailers such as Wal-Mart, were down by 0.8 percent while sales at department stores were flat.

Sales at electronics and appliance stores dropped by 2.6 percent and sales at hardware stores dropped by 0.4 percent.

The weakness over the year reflected the battering that consumers have taken from the worst recession since the Great Depression, a downturn that has cost 7.2 million jobs and left households trying to rebuild savings depleted by losses on Wall Street and a crash in housing prices.

Once again, Crutsinger parted company with AP colleague Jeannine "Rebounding Economy" Aversa as he describes an economy that "struggles to recover."

So why did the big stores mostly report modest increases while overall retail sales fell? I'm afraid the answer may be that smaller retailers still brave enough to keep the doors open got hammered. It should also not be forgotten that the "Uncertainty Economy" Barack Obama and Congress have created is working to inhibit those who might start up new retail operations that would replace the failed ones.

Maybe the AP's newsroom has run out of lipstick to put on the economic pig. Whatever is going on, Obama administration apparatchiks and apologists cannot be pleased that Martin Crutsinger for the moment appears to have put a halt to the window-dressing.

Cross-posted at BizzyBlog.com.

In his coverage of yesterday's Monthly Treasury Statement from Uncle Sam, the Associated Press's Martin Crutsinger, who I have criticized frequently for cruddy reporting, especially on federal finances, did a pretty good job reporting key facts and conveying very real concerns that are brewing over the country's current fiscal path.

In the process, he made a stunning admission about the economy's situation that has to be seen to be believed.

I find myself concerned that the previous paragraphs might cause Mr. Crutsinger to get called into a closed-door meeting where he gets asked what in the world is going on. If that happens, I have an agenda item he can bring up. I'll get to that later.

Crutsinger's only serious error was his final paragraph's mischaracterization of deficit trends during the Bush administration.

Anyway, here are key paragraphs from Crutsinger's mostly un-cruddy report (bold after title is mine):

December budget deficit sets record

The federal budget deficit hit an all-time high for the month of December, and the red ink for the first three months of the current budget year is rising at a more rapid pace than last year's record clip.

The massive tide of red ink, reflecting the continued fallout from a deep recession and a severe financial crisis, highlights the challenge facing President Barack Obama as he pledges to get control of runaway deficits.

The Treasury Department said Wednesday that the deficit last month totaled $91.85 billion, the largest December deficit on record. The figure was in line with economists' expectations.

For the first three months of the current budget year, which began on Oct. 1, the deficit totaled $388.51 billion, 16.8 percent higher than the $332.49 billion imbalance recorded during the same period a year ago.

Last year's deficit surged to $1.42 trillion, more than three times the record of the previous year, an imbalance of $454.8 billion set in 2008.

.... The Obama administration is projecting that this year's deficit will climb even higher to $1.5 trillion, which would be 5.6 percent higher than the 2009 deficit.

.... economists warn that the government's financing costs will begin rising sharply once the recovery begins and the Fed starts raising rates to make sure inflation does not get out of control.

Foreign governments, including China, the largest holder of U.S. Treasury securities, have also expressed concerns about the outlook for deficit reduction in coming years.

.... While the administration is pledging to work to improve that deficit outlook, private economists wonder whether Obama will be able to break the political gridlock that has prevented a significant attack on the deficits even before the recession made them worse.

The "once the recovery begins" phrase I bolded above is a mind-blower. Crutsinger is telling us, despite what his colleague Jeannine Aversa recently wrote about the economy's "rebound," that the recovery hasn't begun. Pass the smelling salts.

Sure, we're supposedly into the seventh month of economic growth since the recession as normal people define it ended with the positive growth that occurred during the third quarter of 2008. But that 2.2% annualized growth was largely driven by government spending and government tax breaks. Though those items are probably still heavily influencing more recent growth, the financing constraints Crutsinger cites could render that administration strategy unsustainable in short order.

The AP reporter's last paragraph about the lack of a "significant attack on the deficits" is factually incorrect:

• In the wake of 2001's sort-of recession (as normal people define a recession, there never was one) and the financial impact of the 9/11 terrorist attacks, the administration promised that it would cut the deficit, estimated to be over $500 billion at the time of that promise, in half by the time the president left office.
• Thanks primarily to the income- and investment-related tax cuts of 2003, which grew federal receipts by over 40% in next four years, the Bush administration was able to keep that promise despite insufficient spending restraint three years early, as fiscal 2006's reported deficit was $250 billion. Fiscal 2007, reflecting the fiscal priorities of the final session of the Republican-controlled Congress in 2006, came in with a reported deficit of $162 billion.
• The government was on track to do even better in subsequent years, but it's clear in retrospect that the Democratic takeover of Congress after the 2006 elections ended any hope of further improvement.

Crutsinger is wrong to claim that there was no "significant attack on the deficits" during the Bush administration.

Here's my agenda item for the possible meeting into which Mr. Crutsinger may be called for his excessive honesty and accuracy: After his dress-down, Martin should ask his superiors for permission to tell readers how much the national debt went up during the periods covered. If he had done this work in his most recent effort, he would have found, using this Treasury Department tool, that:

• During December, the national debt went from $12.11 trillion to $12.31 trillion an increase of roughly $200 billion, which is about $108 billion greater than December's reported deficit of $92 billion.
• During the first fiscal quarter, the national debt went from $11.91 trillion to $12.31 trillion an increase of $400 billion, which is about $11 billion greater than the first quarter's reported deficit of $389 billion.

He could then go on to briefly explain why the differences occurred. The nearly indecipherable accounting for the Troubled Asset Relief Program plus factors I cited several years ago would come into play.

Better yet, Martin should probably just do this without asking. Given that the info might be seen as unfavorable to the current administration, AP boss Tom Curley and Co. would probably say no.

Cross-posted at BizzyBlog.com.

Transportation Secretary Ray LaHood took to the WhiteHouse.gov blog today to try to refute a devastating AP report showing that the the stimulus's highway and road funding has done next to nothing to improve the unemployment situation. Though he offered a couple of valid points, LaHood, pictured right in a file photo, actually did very little refuting.

The AP asserts in its report that "there was nearly no connection between stimulus money and the number of construction workers hired or fired since Congress passed the recovery program. The effect was so small, one economist compared it to trying to move the Empire State Building by pushing against it."

LaHood points out--fairly--that the AP examines the construction industry as a whole while the seven percent of the $787 billion that went towards funding highway and road construction (roughly $55 billion) only affects the transportation construction industry, not the industry as a whole.

But in doing so LaHood admits, as NRO's Steven Spuriell notes, that the stimulus "saved or created" jobs for at the very least $213,000 a piece. This statistic assumes that the stimulus saved every single job in the transportation construction industry--LaHood estimates the industry is comprised of 258,000 Americans--so the actual cost is probably much higher (surely at least a few highway construction workers would have kept their jobs without the stimulus).

Furthermore, the AP report seems to take into account the differences between construction spending generally, and spending on road and highway construction. It sought to determine, after all, whether the level of such spending had a discernible effect on employment, and found that it did not. Since the stimulus is designed to put people to work, and not just in the transportation construction industry, overall employment is the ultimate--indeed, the only--measure of its success.

The AP reported,

"Local unemployment rates rose and fell regardless. And the stimulus spending only barely helped the beleaguered construction industry, the analysis showed.

With the nation's unemployment rate at 10 percent and expected to rise, Obama wants a second stimulus bill from Congress including billions of additional dollars for roads and bridges — projects the president says are "at the heart of our effort to accelerate job growth." …

But AP's analysis, which was reviewed by independent economists at five universities, showed the strategy of pumping transportation money into counties hasn't affected local unemployment rates so far.

"There seems to me to be very little evidence that it's making a difference," said Todd Steen, an economics professor at Hope College in Michigan who reviewed the AP analysis.

And there's concern about relying on transportation spending a second time.

"My bottom line is, I'd be skeptical about putting too much more money into a second stimulus until we've seen broader effects from the first stimulus," said Aaron Jackson, a Bentley University economist who also reviewed AP's analysis.

The AP's report seems pretty cut and dry. The administration was very quick to issue its rebuttal of the report, but the response was lukewarm, and didn't actually refute the inescapable findings of the study: pumping money into the transportation construction industry is not helping the unemployment problem or the larger economic ills facing the country.

CNN's efforts to spin the current economy have gotten to the point of being ridiculous.

For three days in a row, a series of reports all showed persistent layoffs above expectations, and in each case CNN.com inexplicably reported optimism. 

First up was an ADP report released Wednesday which tracked the economy from the side of business owners and how many workers they laid off. Instead of showing the complete picture, CNN chose to present a decidedly upbeat angle.

CNN Money writers Jessica Dickler and Hibah Yousuf set the tone as they worked hard to spin unexpected layoffs as a positive sign in their rosy-headlined "Job Picture Gets a Little Bit Brighter":

In some welcome news on the job front, the pace of U.S. job losses eased in December, according to two reports released Wednesday.

Automatic Data Processing (ADP, Fortune 500), a payroll-processing firm, said private-sector employers cut 84,000 jobs in December, the fewest since March 2008.

It was the ninth straight month that job losses narrowed from the previous month. The number of cuts in November was revised down to 145,000 from the previously reported 169,000.

Economists surveyed by Briefing.com had forecast a loss of 75,000 jobs in December.

As an example of actual journalism, the Dow Jones newswire gave an objective summary of the ADP report that included more information. December's numbers showed a temporary boost for jobs in customer service, mostly due to extra shopping for Christmas and Hanukkah, while other industries kept shrinking. Worse yet, even with the retail hiring, there was still more overall loss than what experts had predicted.

By contrast, nowhere did CNN's article explain exactly how persistent layoffs were a sign of good times to come, nor did the writers ask how these predictions seemed to be wrong so often. In fact, speculation about the future was a tangled mess throughout the piece.

After glossing over the blown forecast, Dickler and Yousuf eagerly recounted a new set of cheerful words from an expert about what might happen next:

"We're moving in the right direction, and I think we're only a month or two away from reporting a positive top line number," said Joel Prakken, chairman of Macroeconomic Advisers, in a conference call.

For those who don't speak finance, a positive top line simply means companies are earning some revenue. It does not automatically mean profit, and it's no guarantee they will start hiring more workers any time soon.

Indeed, Prakken followed with a warning that despite positive numbers on an income statement, unemployment would remain high and possibly rise in the near future.

Yet CNN couldn't be bothered to explain the apparent contradiction.

In line with Prakken's estimation, the Department of Labor made its own prediction that the national unemployment rate will reach 10.1% by early spring - a tiny detail CNN mentioned in the very last sentence.

Thus in the span of 15 paragraphs, CNN went from a "brighter" economy on the verge of rebound to unemployment that would keep going up.

Believe it or not, CNN was never so generous while reporting such things under President George W Bush. In September 2004, when unemployment was at 5.5%, John Kerry was on the campaign trail comparing Bush to Herbert Hoover - and CNN gladly reported it as important finance news.

Then in 2006, when unemployment went as low as 4.7%, instead of celebrating the end of recession fears, CNN found a way to rain on the parade:

The drop in unemployment was the latest sign of a tightening labor market, which could put upward pressure on wages and prices in the months ahead.

On Wall Street, stocks fell as investors worried that the report makes further interest rate hikes by the Federal Reserve more likely.

[...]

Jeoff Hall, the chief U.S. economist for Thomson Financial, agreed that the unemployment rate could bounce back up in coming months as those now not counted as in the labor force start to look for or find jobs.

Under Republican leadership, anything above 5% was Hoover-esque while anything below 5% would cause higher interest rates. Under a Democratic President, double digit unemployment comes with abundant hope that things would look up any day.

Actually, when reporting a tough economy under Democratic leadership, CNN's strategy seemed to be ignoring President Obama's influence altogether. The bright future of 10% unemployment did not mention a single politician or any thought of the drastic measures recently taken to stimulate the economy.

On Thursday, Yousuf was forced to return to the issue when the government released fresh data on rising unemployment claims. Once again, there was no blame put on leaders in Washington, no pondering what a slow recovery could mean in an election year.

Instead of dwelling on the negatives, Yousuf got right back to work on sunshine and lollipops:

With layoffs slowing, Lonski expects job growth may be near.

"Fewer layoffs implies that financial conditions of businesses have improved," he said. "In time, businesses will need to hire more workers in order to fulfill customers' needs."

He added that the unemployment rate could have peaked October at 10.2%, and employers could start adding enough jobs to see positive job growth as early as March.

Literally 24 hours after layoffs had been worse than expected, there was CNN finding so few of them.

But just you wait - the worst was yet to come.

On Friday,  the Labor Department released an official report on December layoffs that was even higher than the initial findings of ADP. NewsBusters highlighted the bleak announcement with a bit of curiosity in how the media would cover it.

CNN Money jumped right in. Writer Donna Rosato began with the headline "Jobs Report Wasn't All Bad News," still leaning on retail hiring for the holidays, and also trumpeting growth in healthcare with no worry current efforts by Congress might stymie one of the few positive industries left.

And then Rosato let slip one of the funniest lines to appear in print for some time:

That figure dashed hopes that the final month of 2009 would be the first to show jobs being added back to the economy. With more than seven million jobs lost in the last two years, no one was looking for major job creation.

No one expected major job creation? Really?

For a fun little trip down memory lane, observe CNN Money claiming in August that improvement was just around the corner - after predicting a recovery in July and smugly touting a strong dollar that would surely save the economy in March.

After spending almost a year on job creation, CNN Money felt no shame in denying their own archives.

At some point, readers will begin to realize that CNN always promotes recovery no matter what the numbers might say -- as long as there's a Democrat in the White House, that is.

In a Friday news analysis piece that appeared in the paper's print edition today (teased at its web site as seen on the right), Jackie Calmes at the New York Times began with a pathetic headline, and opened with pity on our poor overwhelmed, stressed-out, stretched-in-all-directions President:

Obama Tries to Turn Focus to Jobs, if Other Events Allow

President Obama keeps trying to turn attention to “jobs, jobs, jobs,” as his chief of staff has put it. But he is finding that it can be hard to focus on any one issue when so many demand attention, often unexpectedly.

This is simply another variation on the "distracted" President theme I noted last year (at NewsBusters; at BizzyBlog). You know, if those terrorists and other messy realities wouldn't intervene, Barack Obama could do his job sooooo much better.

Calmes resumed the pity party in her seventh paragraph:

Meanwhile, the world keeps intruding as Mr. Obama tries to execute his promised pivot.

No sooner was the president home on Monday from his Hawaiian holiday break than he was closeted for days at the White House with his national security team, on responses to the foiled Christmas Day airliner attack.

With House and Senate Democrats now in the home stretch of their negotiations for a compromise on health care legislation, he will have to be more directly involved than ever before in those gritty legislative details.

Anita Dunn, until recently Mr. Obama’s communications director, said that when the health care bill was completed, “that will give the administration more space to really communicate to the American people about those things that have been done and that the president continues to push forward on to make the economy work for middle-class families.”

Mr. Obama, in his Friday afternoon statement on the job numbers, called them a reminder “that we have to continue to work every single day to get our economy moving again. For most Americans, and for me, that means jobs.”

Calmes's citation of statist health care legislation is particularly intriguing. A strong argument can be made that if the president wants to do something to quickly improve the prospects for job creation, suggesting that Congress abandon its effort to have the government seize de facto control over one-sixth of the economy might be the ticket.

The Wall Street Journal backhandedly makes that very assertion in an editorial today:

With so much policy uncertainty out of Washington and the state capitals, no one can be sure what they will pay for energy (rising oil prices, cap and trade) or new regulation (antitrust), how high their taxes will rise, and how much each new employee will cost (health care). In this kind of world, employers will wait as long as possible to add new workers.

Removing the health care component of that uncertainty could and probably would do wonders for employers' current hiring avoidance. If the president were really interested in "get(ting) our economy moving again," he would focus on that. Don't hold your breath.

Finally, how interesting it is that Calmes went to Anita "Mao Inspires Me" Dunn for a comment. Van Jones must not have been available.

Cross-posted at BizzyBlog.com.

First of all, let me wish you a happy and prosperous New Year, and I want to thank you all for reading this column and letting your thoughts be known by responding.

Whether your reaction to what I write be pro or con, it's always good to know what's on your mind, and I sincerely hope that you will continue to do so.

There is a great frustration abroad in America these days and goodness knows we have enough to be frustrated about; the economy, the two wars we are fighting, people walking unimpeded across our border from Mexico, a country that for all practical purposes is being controlled by a ruthless drug cartel.

The closing of businesses, the loss of jobs and the relentless cruelty of Islamic terrorists around the world all add up to a myriad of serious problems facing America today.

Although you will not hear it articulated in the mainstream media, I think what's bothering Americans more than any other single subject is the fact that we've lost control of our government.

The Congress and Senate, for the most part, are peopled by unscrupulous, greedy, self-serving career politicians who are so out of touch with the people who elected them it's a wonder they can even find their ways home.

I have watched as one by one members of the Senate have sold out to Harry Reid and his Democrat slush fund as they are promised millions and in some cases billions of what amounts to political graft.

They have prostituted what minute shreds of integrity they had and sold out America for Democrat dirty money in hopes that it will give them another term to rob the American public.

With very few exceptions, my contempt for both houses of Congress knows no bounds. They never stop campaigning, no sooner do they darken the doors of Capitol Hill than they start making plans for their next election.

They have sold America's birthright and sentenced America to hyperinflation, massive taxes and a national debt we very well may never pay off.

They refuse to deal with the catastrophic problems; they don't even talk about them.

In the next few years the Middle East is going to explode as Iran finishes their nuclear weapons program. I wonder if Congress really believes Iran is developing nuclear power for peaceful purposes as they claim.

If they do, they're an even bigger bunch of fools. If the program is for the production of electric energy, why do they need intercontinental ballistic missiles?

Presidents and Congress have sat back for decades and watched this develop but rather than deal with it they keep their noses so deep in the pork barrel that they probably oink.

It's funny to me that President Obama can make a snap decision on the non-existent global warming crisis and it takes him months to decide to send additional troops to Afghanistan.

As the country slips farther into recession him and his advisors keep telling us that we've turned the corner on economy. They can't really believe that.

The only part of the economy that has grown is the federal government, and guess who finances that.

I guess it's more important to go to Copenhagen and play fantasy crisis games with the other left-wing socialist radicals than to stay at home and face the music. Besides, he gets to give away some more of our money there.

Thugs like Hugo Chavez, Mahmoud Ahamadinejad, and Kim Jong-il thumb their noses at America and correctly perceive that Obama is a weak president who is swimming in waters way over his head and refuses to even wear a life preserver, by surrounding himself with people who have had experience on the world stage.

The attorney general is either certifiably insane or as dumb as a box of rocks to think that anything even remotely good could come out of moving the trials of bloodthirsty enemies of America to New York.

Mark my words, folks. If Congress allows this folly, something bad is going to happen. Why Eric Holder wants to take a chance on this completely baffles me.

And why doesn't Congress stop it? They could by law, but they're too busy selling out America to take notice.

People of New York, I love your city. It's the greatest city on Earth and I just hate to see your noses rubbed in the ashes of 9/11 yet again. I hope you'll rise up, as only New Yorkers can, and demand that this insanity is stopped.

People, we have lost our government and if something isn't done very soon, we are going to lose our country, and I don't think I can bear that.

When Congress and the President ignore the wishes of the people and pass legislation that the majority of citizens are against, we no longer have a republic. We have a medusa-headed dictatorship, not designed to serve the people but for the proliferation of power. Power detrimental to the United States of America.

I'm not talking about political parties when I say. Let's kick these crooked bums out or office before they completely ruin this great nation.

I am inventing a new political anagram. S-O-S-O-B, the first two letters mean, "sell out", I'll leave the last three letters to you.

America deserves much better.

What do you think?

I distinctly remember the placards in the windows of the union hall in my union-stronghold Michigan city: “Show Us the Jobs.”  It was a thinly-veiled campaign against the Bush administration for what the AFL-CIO saw as a failure to create jobs.

The economy in 2009 and 2010 was and is far worse than it ever was in 2004.  The unemployment rate in 2004 was 5.5%.  Today, it’s 10%.  If Obama could get the unemployment rate somewhere in the middle, the Nobel Committee would likely send him the prize for economics.

Saul Alinsky’s Fourth Rule for Radicals is, “Make the enemy live up to their own book of rules.”  So, in true Alinsky fashion, why not turn the left’s campaign against them?  Republicans: adopt the “Show Us the Jobs” campaign.  After all, the AFL-CIO’s bus tour to swing states didn’t begin until March of that year.

A pro-union newsletter said this about the AFL-CIO’s campaign:

A bus tour will soon travel to eight states and 18 cities to highlight parts of the country from small town America to large cities that have been hardest hit by job loss. The tour will end in Washington, D.C. to call on our nation’s leaders to make the jobs crisis their number one priority, and to put America back to work at good jobs. As the tour winds through these cities a spotlight will be focused on the devastating impact of the nation’s deep jobs crisis.

Seems like it’s about time for another bus tour, eh, AFL-CIO?  It would be with good reason.  In April 2004, the International Brotherhood of Electrical Workers framed it this way:

Show Us The Jobs was planned to put human faces behind the cold statistic of 2.2 million jobs lost since President Bush took office.

Using that qualifier (ie. “since President Bush took office”), here’s a dirty little fact:  In just one-eighth of the time, the “cold statistic” provided by Americans for Tax Reform in June tells us that 2.2 million jobs have been lost since Obama took office.

President Obama was able to accomplish something that took the Bush administration eight times longer to do, through the AFL-CIO’s lens.  Congratulations!

But sadly, this is still not a priority.  No, it’s the opaque power grab of health care reform.

And the fact that the AFL-CIO isn’t waging a campaign against President Obama and Congressional Democrats underscores that cold fact.

The economy shed far more jobs in December than economists had expected.

The Labor Department announced moments ago that nonfarm payrolls declined by a surprising 85,000 workers last month. Economists had been expecting no change or maybe a small decline.

One bright spot was healthcare which added another 22,000 jobs. Despite efforts by Democrats to "reform" this industry, it remains one of the few that continues to hire having added a staggering 631,000 employees since the recession began in December 2007.

It will be very interesting to see how this announcement gets covered by the Obama-loving media in the coming days:

Nonfarm payroll employment edged down (-85,000) in December, and the unemployment rate was unchanged at 10.0 percent, the U.S. Bureau of Labor Statistics reported today. Employment fell in construction, manufacturing, and wholesale trade, while temporary help services and health care added jobs.

In December, both the number of unemployed persons, at 15.3 million, and the unemployment rate, at 10.0 percent, were unchanged. At the start of the recession in December 2007, the number of unemployed persons was 7.7 million, and the unemployment rate was 5.0 percent.Construction employment declined by 53,000 in December, with job losses throughout the industry. Employment in construction has fallen by 1.6 million since the recession began. [...]

In December, employment in manufacturing decreased by 27,000. The average monthly decline for the last 6 months of 2009 (-41,000) was much lower than the average monthly decline for the first half of the year (-171,000). Since the recession began, manufacturing employment has fallen by 2.1 million; three fourths of this drop occurred in the durable goods component (-1.6 million).

Wholesale trade employment declined by 18,000 in December, with the majority of the decline occurring among durable goods wholesalers. Employment in retail trade was little changed over the month, although general merchandise stores lost 15,000 jobs.

Temporary help services added 47,000 jobs in December. Since reaching a low point in July, temporary help services employment has risen by 166,000.

Health care employment continued to increase in December (22,000), with notable gains in offices of physicians (9,000) and home health care services (8,000).

The health care industry has added 631,000 jobs since the recession began.

How will this get covered in the coming days?

Stay tuned.

Speaking to Virginia Governor Democratic Party Chairman Tim Kaine on Thursday’s CBS Early Show, co-host Maggie Rodriguez pointed out a potential dire situation for Democrats in the 2010 midterm election: “Your party stands to lose a lot in the fall. Its 60 vote majority in the Senate, dozens of seats in the House, as well as Governor seats across the country.”

An on-screen headline posed the question: “Democrats in Trouble?” Rodriguez summed up the circumstances under which Democrats could do well in the fall: “...two things have to happen. One, the economy has to improve, and, two, health care has to not only pass, but show that it’s working.” She assumed that health care passing would be a good thing for Democrats and failed to ask Kaine about the lack of openness in the legislative process.

Rodriguez asked for Kaine’s assessment of the situation. Unsurprisingly, the DNC chair was optimistic about his party’s chances: “I think both are going to happen....I think the passage of historic health care and continued improvement of the economy is going to actually surprise some people in November in terms of how Democrats do.”

After Kaine outlined that rosy hypothetical situation, Rodriguez challenged him: “You have 11 months to accomplish two pretty ambitious goals. If it doesn’t happen, Governor, should the Gov – should the President take responsibility for this?” Kaine suddenly didn’t feel like making anymore predictions: “I’m not going go into the hypotheticals because like you say, we’ve got a 11 months where-” Rodriguez pressed him: “Well, but it hasn’t happened yet....So you have to consider that it may not happen.”

Kaine claimed: “I think it has happened on the economy....job loss numbers have been dramatically reduced. And we’re seeing a lot of positive signs in the manufacturing sector, returns of consumer confidence....we are going to get health care done, there’s immediate benefits in the health care bill for all Americans.”

Later, Kaine went so far as to suggest that 2010 would be a good year for Democrats: “...while two Democratic senators are going to retire, six Republicans are retiring. Ten Democratic House members are retiring, but 14 Republicans. Two Democratic governors, but four Republicans. The retirements are really on the other side.” He conveniently left out Illinois Senator Roland Burris and Delaware Senator Ted Kaufman, both place holders for the respective seats of President Obama and Vice President Biden, who will not be running for reelection.

Kaine concluded the Republicans were the ones really in trouble: “And no surprise, there’s a huge corrosive civil war within the Republican Party that we see playing out all over the country that I think is going to continue to be a factor that will work in our favor in 2010.” Rodriguez simply replied: “We shall see.”   

Here is a full transcript of the segment:

7:14AM

MAGGIE RODRIGUEZ: On Wednesday, two senior Senate Democrats announced that they will retire after this year as well as a prominent western governor. So is this a bad sign for the Democrats? Let’s ask Virginia Governor Tim Kaine, Chairman of the Democratic National Committee. Good morning, Governor Kaine.

TIM KAINE: Good morning, Maggie. Good to be with you.

[ON-SCREEN HEADLINE: Democrats in Trouble? DNC Chair on Possible Lost Seats]

RODRIGUEZ: Good to be with you as well. Your party stands to lose a lot in the fall. Its 60 vote majority in the Senate, dozens of seats in the House, as well as Governor seats across the country. And the consensus seems to be that to stop that from happening, two things have to happen. One, the economy has to improve, and, two, health care has to not only pass, but show that it’s working. Do you agree with that and do you think that can happen?

KAINE: I do agree with you, Maggie, and I think both are going to happen. I think the President is about to achieve a victory with the passage of a comprehensive health reform bill that has alluded every Democratic president since Harry Truman and I think that will create a real tail wind for the President and the party when that happens, we expect, in the next six weeks or so.

And then second, you’re right, the economy does have to improve, but what we’ve seen is a president who came into office when the economy was in free fall, losing 800,000 jobs a month, $10 trillion in wealth destroyed in 2008. The President, by bold action with the recovery, has stopped that, we’re starting to see some positive signs. You know, we got to see more, we’ve got more work to do, but I think the passage of historic health care and continued improvement of the economy is going to actually surprise some people in November in terms of how Democrats do.

RODRIGUEZ: You have 11 months to accomplish two pretty ambitious goals. If it doesn’t happen, Governor, should the Gov – should the President take responsibility for this?

KAINE: Well, you know, I’m not going go into the hypotheticals because like you say, we’ve got a 11 months where-

RODRIGUEZ: Well, but it hasn’t happened yet.

KAINE: Well it hasn’t – well, wait a minute-

RODRIGUEZ: So you have to consider that it may not happen.

KAINE: I think it has happened on the economy. We – again, we were losing 800,000 jobs a month when the President took office and what we’ve seen is those job loss numbers have been dramatically reduced. And we’re seeing a lot of positive signs in the manufacturing sector, returns of consumer confidence. Again, we’re not where we want to be yet. But I think that the two, you know, conditions you layout are very strong ones.

The President, we are going to get health care done, there’s immediate benefits in the health care bill for all Americans. Ending of insurance company abuses like, you know, pre-existing conditions or rescission of your policy if you get sick. Parents can keep kids on their policy until they’re 27, instead of 21. Seniors will get help with prescription drugs.

So while these retirements, you know, are ones that have – certainly happening on the same day, it’s a surprise – one of the things that I noted as I took a look at the landscape yesterday is, you know, while two Democratic senators are going to retire, six Republicans are retiring. Ten Democratic House members are retiring, but 14 Republicans. Two Democratic governors, but four Republicans. The retirements are really on the other side. And no surprise, there’s a huge corrosive civil war within the Republican Party that we see playing out all over the country that I think is going to continue to be a factor that will work in our favor in 2010.

RODRIGUEZ: We shall see. Governor Tim Kaine, thank you very much.

KAINE: Absolutely.

In the eyes of many in the liberal media, President Obama can do no wrong. If he does, it's not his fault; he is simply a victim of circumstance, or he made the best decision he could given the options. One can tell news items portraying Obama in this light by their descriptions of problems in the passive voice.

Take yesterday's New York Times article by Jackie Calmes, for instance. The piece displays a conspicuous use of the passive voice in the headline: "Promise to Trim Deficit Is Growing Harder to Keep", instead of, say, "Obama's Policies Make Deficit Reduction Unlikely".

The refrain is getting old. When Obama's economic policies caused the debt to skyrocket, and didn't lead to recovery but rather to more federal spending aimed at shoring up the economy, it was because the recession was worse than the administration had planned. Obama's brilliant plans to raise taxes on businesses failed because Congress succumbed to political pressure. Anticipated savings in Iraq were nullified when it turned out winning a war in Afghanistan might actually require significant funding. And Medicare is already being cut to pay for the health care overhaul, so those cuts can't go towards drawing down the deficit. You see, it's never actually Obama's fault.

First, of course, is the obligatory "recession was worse than we had planned" apologia:

A deeper recession and slower recovery than the administration initially forecast have increased the tab for economic stimulus measures beyond the original $787 billion package, adding hundreds of billions of dollars for programs like unemployment relief and tax credits for homebuyers…

“The White House faces a tough challenge preparing a budget with very different goals: cutting the deficit while maintaining stimulative policies designed to keep the recovery going,” said Thomas S. Kahn, staff director for the House Budget Committee.

Calmes buys right into the whopper of a liberal talking point that the economy could not possibly have improved without massive spending programs charged to the taxpayers' collective credit card. She trumpets what is perhaps the greatest economic fallacy of our time: that government can either spend more, leading to economic recovery but raising the federal deficit, or it can spend less, reduce the deficit, but leave the economy to stagnate. Keynes would be proud.

While managing to avoid saying words like "increase", "raise", or "hike", Calmes laments Congress's refusal to collect more in taxes from companies that do business overseas and wealthy Americans. That raising taxes on people who create jobs (investors and businesses) would likely deepen the recession seems lost on the author.

Recalling, though not explicitly mentioning, Obama's campaign line that he would pay for recovery spending by drawing down the Iraq war, Calmes notes "The savings Mr. Obama once projected from winding down the war in Iraq are being eroded by a bigger buildup in Afghanistan than he had initially contemplated."

There's that passive voice again: "…are being eroded". Perhaps it would have been more accurate to say: "Obama's escalation of the war in Afghanistan has eroded the savings he projected from drawing down the conflict in Iraq." Say what you will about the Afghan war, but at least admit that this was not some random happening, and that Obama himself nullified the savings from Iraq by pumping funds into Afghanistan.

"Meanwhile," Calmes continues, "the biggest tool usually employed to chisel away at projected deficits — shaving Medicare payments to health care providers — is already being used to offset the costs of overhauling the health care system." And who was it who put that overhaul in motion? Ah yes, President Obama. Liberals can pontificate all they want about the necessity of so-called health care reform, but it is indisputable that the policy would prevent Obama from paying down the deficit with Medicare cuts (as the cuts will go toward paying for the bill).

Finally, in the last sentence of the article, Calmes states: "even supporters are saying Mr. Obama cannot keep both his promise to bring deficits under control and his vow not to raise taxes on anyone making less than $250,000." But she refuses to place any blame at the President's feet, neglecting to note the many areas in which Obama could have opted for something other than run-of-the-mill liberalism.

Calmes strives to support Obama by neglecting to attribute the failings of his policies to the policies themselves. If Obama doesn't succeed, by her logic, the deck was stacked against him.

In hockey, rough sport that it is, it is rare that one player scores three goals in one game.  They call that a Hat Trick.  In the game of politics, Obama now has managed the Liberal Hat Trick in the minds of the American Public.  In November, he may just find out how rough politics can be.

Of course, many people have known for a long time just how liberal Obama is and was.  There were many warning signs in the last election cycle.  The public however, in this slightly Right of Center nation, either was so tired of ineffective Republicans or, with the help of the Media, refused to acknowledge the warning signs.  In doing so they elected Obama with 52.9% of the vote – a victory but not an overwhelming victory.

Large margin or not, since being inaugurated, Obama has run quickly to the Left. In doing so, he fulfilled Reagan’s warning that Democrat Presidential candidates run as moderates but are determined to govern more to the Left, i.e. Jimmy Carter and Bill Clinton.  The Obama Administration’s response to the terrorist bomb attempt in Detroit completed that process in the minds of the American public.

The Liberal Hat Trick, to which I refer, is when a politician firmly establishes himself as (1) for higher taxes while spending out of control, i.e. being anti – prosperity, (2) being socially liberal if not antagonistic to American traditions, and (3) being weak on defense.

1. High Tax/High Spending Obama. During the campaign, Obama warned us that he was anti-capitalist and anti-prosperity when he stated over and over that he was against the Bush tax cuts – tax cuts that brought us out of a recession and produced over 50 consecutive months of job growth.  Obama said over and over again that the rich didn’t ask for the tax cuts and didn’t need them.  Now Americans by a 3 to 1 margin believe that tax cuts would revive the economy more than Obama’s spending.  As for the staggering growth in spending, a plurality now believe that the Stimulus Bill has hurt the economy more than helped it and concerns for the deficit poll far higher than concerns over health care.

2. Socially Liberal/Antagonistic to American Traditions.  Most Americans knew Obama was liberal on social issues when he was elected.  Since his inauguration, he has done nothing to convince people otherwise including (a) his first week in office lifting of the restrictions on funding for groups that provide abortion services or counseling abroad, reversing the policy of his Republican predecessor, and (b) extending federal benefits to gay domestic partners.  Beyond that, Obama became the Apologist-in-Chief to the distaste of many Americans by going around the World and bowing to dictators and apologizing for America’s “actions.”  All in all, a year into his Presidency, Americans understand well what they knew at the outset, that Obama’s social views are clearly Left of Center.

3.  Weak on Defense. Few Americans expected Obama to be strong on defense let alone a hawk.  Indeed, the Far Left was motivated by the idea that he would get us out of Iraq and Afghanistan as a matter of course not success.  True to form, since his election, Obama has shown to be tepid at best on foreign policy with regard to such high profile issues as Iran, Israeli security and European missiles.

The Detroit terrorism issue, however, is different by a large order of magnitude.  Whereas Israel may be far away to some and few and have seen a missile – making such issues distant in time and space to most which allows people to ignore the issue  - personal safety in the homeland is anything but far away – geographically or mentally.  In other words, his weakness on defense is now close to home and that should have major political consequences.

Recall that the “security” issue among “soccer moms” was a significant issue during the Bush years that changed the political landscape.   Now consider Obama’s weak response to the Detroit terror attack; combine that with the ludicrous Napolitano and her working system and the understanding that Obama has left vacant the heads of TSA and the Customs and Border Protection agency.  Little wonder voters are questioning his priorities.

Witness also that even the liberal lioness Maureen Dowd is openly questioning whether we are safe under Obama and the astonishing 30% jump to 70% in those that expect another attack.  It is hard now but to conclude that Americans are clearly concerned and focused on their safety and whether Obama is strong enough to protect us.

In sum, along with their view that he is liberal on fiscal and social issues, Obama has firmly completed the Liberal Hat Trick in the minds of the majority of American voters – all to the great peril of his fellow Democrats and to the great opportunity of Republicans in November of 2010.

This is the fifth year I have looked into how the media treats these two topics:

• The use of “Christmas shopping season” vs. “holiday shopping season” (note how the AP photo at right uses “holiday” and not “shopping,” even though there is a C-C-, Chr-Chr-Christmas tree in the picture).
• The frequency of Christmas and holiday layoff references.

I have done three sets of simple Google News searches each year — the first in late November, followed by identical searches roughly two and four weeks later. The results of this year's first two sets of searches are here (NewsBusters; BizzyBlog) and here (NewsBusters; BizzyBlog).

A table showing the results from this year, plus key comparisons to prior years, follows:

Looking at this year by itself, the proportion of references to the "Christmas shopping season" increased steadily from just before Thanksgiving to just before Christmas, but were a woeful 9.1% of all combined results. Google News search references to Christmas in stories about layoffs were proportionally four times more frequent than they were in stories about shopping (36.9% vs. 9.1%).

Comparing to prior years, while the "Christmas shopping season" percentage of all "shopping season" searches held steady from 2005 to 2007, it has dropped from 12.2% to this year's 9.1%. That's a 25% drop in just the past two years. If that 1.5-point drop average yearly drop continues, we will find no references to the "Christmas shopping season" in about a half-dozen years.

The results relating to "layoffs" are doubly relevant:

• First, this year's percentage of references to Christmas in layoff stories returned to its 2007 level.
• More important, the absolute number of layoff references this year was down 88% from a year ago. Even after considering that Google News (and probably the economy itself) have pruned the number of news results by about half, the number of references to layoffs dropped by roughly 75%. "Somehow" this is the case even though the unemployment rate is several percentage points higher than it was a year ago. The number of layoffs occurring certainly hasn't dropped by that much.

Sadly, this year's search results show a continuing trend towards having the word "Christmas" become disassociated from stories about the gift-giving season, while keeping it relatively visible in dispatches about job losses.

Cross-posted at BizzyBlog.com.

The Associated Press's business writers and many others in the establishment press spent just over a year reminding readers at seemingly every conceivable opportunity that the recession began in December 2007, simply because the supposedly apolitical collection of academics at the National Bureau for Economic Research said so.

Lo and behold, in her year-end roundup of 2009's top business stories, an article so biased and error-prone that I am devoting my next weekly column to deconstructing it, the Associated Press's Jeannine Aversa writes that:

After four quarters of decline, the economy returns to growth during the July-to-September period, signaling the end of the deepest and longest recession since the 1930s.

Well, isn't that special?

All of a sudden, Aversa is telling us that that the recession really ran from the third quarter of 2008 through the second quarter of 2009. She says that the recession ended during the third quarter of 2009 simply because the economy has returned to positive GDP growth (i.e., the "signal" went from a minus sign to a plus sign), which means she is now pegging it as having begun just four quarters earlier.

In other words, after using the NBER to define the beginning of the recession, she is using the "normal people" definition of a recession to say it's over.

No can do, babe.

If you want to come back to the "normal people" definition, Jeannine, you and your colleagues are going to have to rewrite all items composed during the past year that dated the recession's beginning as December 2007 -- items that conveniently told us that we were putting up with a recession for more than a full year before Dear Leader came along. If you and your fellow journos aren't willing to do that, you're just going to have to be patient like the rest of us and wait for the NBER to tell us when it ended, and in the meantime shut your traps about whether it is or isn't. In other words, if it's on because they say it's on, it doesn't come off until they say it comes off.

As I noted in my Pajamas Media column/BizzyBlog post on February 12 and 14 this year, NBER, to arrive at its December 2007 determination, ignored three different significant pieces of evidence it cited in its own report -- beyond the obvious fact that second quarter 2008 GDP growth was positive, ultimately even after the comprehensive revision several months ago -- that the economy was improving during 2008’s second quarter, but got stopped in its tracks after that (bolds are mine):

The income-side estimates (of gross domestic income) reached their peak in 2007Q3, fell slightly in 2007Q4 and 2008Q1, rose slightly in 2008Q2 to a level below its peak in 2007Q3, and fell again in 2008Q3.

Our measure of real personal income less transfers peaked in December 2007, displayed a zig-zag pattern from then until June 2008 at levels slightly below the December 2007 peak, and has generally declined since June.

The Federal Reserve Board’s index of industrial production peaked in January 2008, fell through May 2008, rose slightly in June and July, and then fell substantially from July to September.

Beyond these three contrary items, considering December 2007 through June 2008 as part of the recession has these other additional flaws:

• In December 2007, the economy added 120,000 seasonally adjusted jobs.
• Fourth quarter 2007 GDP growth was an annualized +2.1%.
• Compared to the first two full quarters of previous recessions, the first six months of 2008, with its average of +0.4%, is the only period showing positive net positive six-month GDP growth.
• Jobs lost during the first six months of 2008 were lower as a percentage of the workforce than any other first two full quarters of previous recessions.

I for one am perfectly willing to concede that the recession as normal people define it is over, even if the economy's performance isn't particularly impressing anyone. In fact I have to; that's what's nice about having clear, objective, fact-based definitions. Of course, that also means that I've always said that the recession began in the third quarter of 2008.

But given that seasonally adjusted job losses haven't yet ended, new home sales are still in the tank, and the largely government-induced nature of third quarter 2009's growth, it's hard to see how NBER, if it is to be consistent, will consider the recession to have ended in July. We'll have to see what these supposedly apolitical academics have to say when they say it.

Cross-posted at BizzyBlog.com.

Ever since President Obama took office with his merry band of Democrats controlling both chambers of Congress, the media began reporting high unemployment in the most positive light they could find.

NewsBusters exposed one such trick by Newsweek on December 10 that found a silver lining for unemployed dads to reconnect with their children. ABC News posted a column on their website Thursday that advanced the cause even further: now people who still have jobs are hoping to get laid off.

Such was the case made by one Michelle Goodman in a piece cutely titled "All I Want For Christmas is a Layoff." The premise for this bizarre headline was that many Americans began to realize they were working for "slave wages" in jobs that were far too stressful, so perhaps the recession offered a chance to start over.

According to Goodman, the mental effects of remaining on a difficult job could make the unemployment line look a bit more attractive:

If you're one of the countless Americans who's sent out hundreds of unanswered resumes this year, you might be scowling about all the hand-wringing over a job a person actually has.

But being miserable in one's job is nothing new, as years of pre-recession polls conducted by organizations like The Conference Board and Web sites like CareerBuilder.com will attest. Even in flush economic times, many surveys have reported that one in two U.S. workers don't exactly feel warm and fuzzy about their place of employment.

Factor in the stress, paranoia, pay cuts, morale killers and mind-boggling workloads that have gripped employees this year and you have a recipe for some serious job dissatisfaction....

"Several colleagues and I are dreaming of a layoff," the self-described "abused temp" said in an e-mail. "Everyone is searching for another job, some openly. The firm is half the size it was in fall 2007. Clients aren't paying their bills, and we've lost some clients. Every day it's another psychodrama."

Goodman's advice for a worker with the blues? Volunteer to take a layoff, collect a severance package or unemployment benefits, and live off the money (stress free) until something better comes along:

But he's not the only one who views collecting unemployment checks and severance pay as the key to sanity and solvency. My inbox is sprinkled with e-mails from embittered employees who say they're hoping Santa gives them the old heave ho this Christmas.

Instead of explaining unemployment pay as a last-resort safety net offered by the government for those who cannot find work, Goodman encouraged burned-out Americans to see it as more of a paid vacation. A smart worker was therefore someone who tactfully inserted their own  name to the hit list - nudging the company to let them go so they didn't have to quit:

Jim Woods of San Francisco was one of these employees in waiting. But the commercial real estate analyst didn't just pine for a pink slip. He begged his boss to add him to the layoff list.

"I asked to be laid off in December of 2008, two weeks after the first round of layoffs," said Woods, who in 2006 launched the organic beer company MateVeza on the side and was ready to concentrate on his business full time. "I was really nervous about how to frame everything. I said that I would not mind being part of the next round as long as I received a similar package to those that had left in November."

Nowhere did Goodman express concern that volunteering for a layoff might appear to the government as tantamount to quitting and possibly be grounds to lose unemployment eligibility. In an age when many states have already run out of funding to prop up unemployed citizens, taxpayers are not likely to be amused by the government spending even more on people who strategize to quit their job without technically quitting.

To add a hint of balance to the piece, Goodman found time at the end of a three-page column to spend a few sentences on someone brave enough to stick it out:

As for Matthew, the software project manager who was dreaming of a downsized Christmas, he's retiring his hope for a golden parachute.

"I'm sick of living in limbo, wondering whether and when my employer might cut me loose," he said. "I think maybe it's time to give up the layoff fantasy and make the most of the crummy job I've got -- at least until I can find something better."

The line about having to remain at a "crummy job" summed up the entire tone of Goodman's piece. Being unemployed with Obama in the White House was a liberating experience that finally broke the chains of an oppressive employer.

In 2004, when George Bush was President and Republicans controlled Congress, ABC News reported on low employment quite differently. Back then, out-of-work people felt a "pinch" that made life "frustrating."

In those days, folks who found a job, no matter how difficult, were "lucky" just to get a paycheck.

How curious the stigma of unemployment suddenly turned into blissful freedom just five years later.

In keeping with the tradition of the holidays - the minds at MSNBC, the place for politics if you're of the lefty persuasion, decided rate the top 10 political stories of the decade.

And leading this gang of masters of the political journalism universe was "Hardball" host Chris Matthews, who on the broadcast of his Dec. 24 program, announced that conservative activism, mainly the tea party movement was the eighth biggest story of the decade - but labeled "angry white voters" (emphasis added).

"Welcome back to ‘Hardball' - our number eight political story of the decade, angry whites at town hall meetings across the country," Matthews said. "Lawmakers heard the wrath of angry voters."

On Matthews' panel, adding insight and analysis to the story, was NBC chief foreign affairs correspondent Andrea Mitchell, Washington Post "Pulitzer Prize-winning columnist" Eugene Robinson and NBC White House corresponded Chuck Todd. Mitchell chalked this "angry" phenomenon up to the economy, which she claims to have seen firsthand looking for a scoop about Sarah Palin during the former Alaska governor's book tour.

"I think this really does grow out of the recession and the economic pain and the unemployment," Mitchell said. "So this may not be as large a phenomenon as we go forward. I think it is cyclical, but it's angry. I saw it out there when I was covering Sarah Palin on her book tour. These are angry people in the Midwest, in the Rust Belt. They are hurting and they want to let people know and they're telling people off."

Matthews, apparently relying on the cherry-picked footage aired on MSNBC, said they were labeled angry whites because he didn't see any other ethnicities.

"Well, we say angry whites because they do seem to be monochromatic," Matthews said. "They are all whites at these meetings."

But Robinson wasn't willing to just attribute this alleged "angry white voter" phenomenon to the bad economy, but the election of President Barack Obama.

"And I think there was something there, waiting to be touched off by not only the recession but the election of the first African-American," Robinson said. "And the health care. I think it all was the kind of spark that set off, but the kindling was there."

Todd, playing the role of part political scientist and part anthropologist, said this movement had deeper roots than even Obama's election, but the 2003 California recall.

"We did see a sort of preview of this angry voter revolt in a story we don't have mentioned in our top 10 but is a gigantic story in this decade - the California recall, which was an unbelievable story at the time," Todd said. "Yes, it gave us Arnold Schwarzenegger, but set him aside for a minute. It had its roots in this angry voter revolt movement. They were so unhappy with the election. This Gray Davis got reelected. It started in this - it was the same group, Darrell Issa, congressman who's taken advantage of this tea party anger that's out there now - it all started in the conservative sort of Orange County area."

But Matthews dismissed this activism and said Schwarzenegger, who was deemed a failure, was evidence "amateur politics" and "citizen politics" doesn't work.

"Is it episodic, does it erupt out of, like Andrea says - out in California, they've had a bad experience with Arnold Schwarzenegger - amateur politics, citizen politics hasn't worked," Matthews said.

Todd warned tea party participants that if they as a citizenry got too involved, they will face the same fate of California.

"At this time, it wasn't anger," Todd replied. "And it should be a good lesson frankly to these tea partiers - be careful what you wish for, look what you got in California."

 

In an item time-stamped at 1:16 p.m. today (in case updated, here is a graphic capture of the first six paragraphs as they then appeared) covered by yours truly a short time ago (at NewsBusters; at BizzyBlog), the Associated Press's Jeannine Aversa discounted today's weaker than expected economic growth report from Uncle Sam showing that gross domestic product only grew by an annualized 2.2% during the third quarter (two months ago, that growth was thought to have been 3.5%.

Not to worry, Aversa said, because the fourth quarter is going to be really good ("[possibly] the strongest showing since 5.4 percent growth in the first quarter of 2006"), and the first quarter of 2010 will be okay ("growth will slow to a pace of around 2 or 3 percent in the first three months"). To be fair, she did entertain the possibility of a double-dip recession in 2011 in her 18th of 21 paragraphs. But of course most readers won't get that far, and most editors trimming her piece down will leave it on the cutting room floor.

Strangely, Aversa made no attempt to hide her near gloom in a dispatch time-stamped at 2:22 p.m. (first section graphically saved here), barely an hour after her paean to fourth quarter growth.

It's also more than a little odd that after years of the establishment media telling us that the future of the economy as we know it depends on a robust Christmas shopping season, Aversa tells us that this time it's really no big deal:

Strong economic rebound depends on more than Santa

Don't count on holiday shoppers to fuel the economic recovery.

.... Even if holiday sales exceed expectations, the broader recovery is expected to remain weak - for the rest of the year and beyond.

.... usually as recoveries begin, the economy roars to life as pent-up spending is lavished on cars, clothes, homes and appliances. Consumers become an engine of economic strength.

Not likely this time.

.... Despite the glimmer of optimism on the surface ... the economic fundamentals are weak," said Sung Won Sohn, economist at California State University's Smith School of Business.

Many economists do think the economy is growing faster now than it did last quarter. JPMorgan Chase Bank, for instance, has bumped up its forecast for growth this quarter from 3.5 percent to 4.5 percent.

.... But that's no thanks to consumer spending, which is forecast to slow compared with last quarter. Growth is instead being driven by companies restocking shrunken stockpiles of goods.

Yet that benefit could be fleeting.

.... The economy isn't usually this weak early in recoveries.

.... As long as consumers and small businesses remain unable or too cautious to borrow and spend - during and after the holidays - the recovery is likely to make only fitful gains.

How odd, considering that Aversa's 1:16 p.m. GDP report waved around the possibility of 5% annualized fourth-quarter growth under our noses:

The economy is probably growing at nearly 4 percent in the October-to-December quarter, analysts say. A few peg it closer to 5 percent. If they're right, that would mark the strongest showing since 5.4 percent growth in the first quarter of 2006 - well before the recession began. The government will release its first estimate of fourth-quarter economic activity on Jan. 29.

Whether it's bias or something deeper, you've got to admit that it's a long way from "Recovery likely strengthening after weaker 3Q" to "The economy isn't usually this weak" barely an hour later.

If there's an explanation for this outside the realm of psychiatry, it may be that Ms. Aversa wants to be able to cite items such as her later report and say, "See, I'm perfectly fair!" -- knowing full well that her coverage of today's GDP result will be much more widely used by AP's subscribers than any analysis she attempts.

Cross-posted at BizzyBlog.com.