Christie Leveling with Voters about NJ's Economic Reality

Christie is just the type of man we need in the national arena. He is so forthright about the need to cut pensions and health care costs for the public sector workers in New Jersey. Imagine what he could accomplish in the areas of social security and the abominable health care bill. If not 2012, I pray 2016!

Voters Want Spending Slashed Ahead of Deficit Reduction

A new Rasmussen poll finds that 57% of likely voters think reducing federal government spending is more important than reducing the deficit. In fact, only 34% thought that reducing the deficit should be the first priority. Of course, as always, there was a marked divide across ideological and political lines. Sixty-five percent of so-called mainstream voters believe cutting spending is more important, while 72% of the political liberal class say the primary emphasis should be on deficit reduction. About 74% of Republicans and 50% of Independents say cutting spending is more important than reducing the deficit and Democrats are narrowly divided on the question. 

Unemployment Hitting Youth the Hardest

On Friday, the unemployment figure creeped up to 9.8%, which caused economists to wring their hands and begin to assess the "recovery" in terms of history. When they compared the previous recoveries from all 10 American recessions since 1948, this year's figures were bleak as only the 2001 recovery took longer to raise unemployment figures back to pre-recession numbers.

This is the worst recession on record, but when will the 15.1 million unemployed Americans get back to work? The jobless rate has remained above 9% for 19 straight months, the longest stretch on record since 1949, and it's affecting everyone.

Not surprisingly, high school dropouts have the highest rate of unemployment at 15.7%, but, right behind them are college graduates at 5.1%. In fact, those at the beginning of their life cycle are suffering at a much greater rate:

Age 16 to 19......21.5 %

Age 20 to 24......9.3 %

Age 45 to 54......8.1 %

Age 55 and up....7.3 %

http://newsblogs.chicagotribune.com/marksjarvis_on_money/2010/12/unemployment-for-college-graduates-and-people-over-45-hit-highs.html??track=ct-daywatch-12610

All those college kids and hipsters that got out the vote for Obama must be cursing him now.

Sixty Percent Say Congress Won't Cut Spending

Despite the president's bipartisan deficit reduction commission and the Republican's pledge to slash spending, most voters continue to expect the government to keep spending our money. A new Rasmussen poll finds that just 33% of likely voters think it is at least somewhat likely that Congress will significantly reduce government spending over the next year. However, 60% say a significant reduction in government spending is unlikely. Interestingly, the 60% is comprised of 63% of Republicans and 73% of voters not affiliated with either political party whereas Democrats are evenly divided on the question.

The party that introduces legislation that increases our budget will be called on the carpet this time around. I know the GOP won't attempt this, but I hope they also don't squander the opportunity to place as many cost cutting pieces of legislation on Obama's desk as possible. People need to see a real sea change in the party's fiscal responsibility to once again trust the convictions of the party.

Republicans Pledge to Fillibuster All Lame Duck Bills

All 42 Senate Republicans have pledged to refuse to vote for cloture on any bill until the federal government is funded beyond this week and the Bush tax cuts are addressed before they expire December 31. Apparently, they sent a letter to Senate Majority Leader Harry Reid this morning stating their intention to stifle any quick passage of bills Democrats are considering taking up before addressing the tax cuts. The two most publicized such bills relate to a defense authorization that includes a repeal of the “don’t ask, don’t tell” policy and the Dream Act, giving some illegal immigrants who came to the U.S. as children a path to legal residence.

Of course, to politicize the issue, Reid said he is "also lining up action on a labor-backed bill to guarantee collective bargaining rights to first responders, such as police and firefighters, and a bill to extend health care coverage and compensation to people who worked in the World Trade Center ruins after 9/11 and since became sick." That way, he can condemn the Republicans for their obvious homophobia and refusing to take care of 9-11 victims. Let him do it. The GOP is attempting to do the responsible thing in this lame duck session and can remind voters in 2012 that four Democrats voted against the earmark ban:

•Jon Tester (Montana)

•Ben Nelson (Nebraska)

•Kent Conrad (North Dakota)

•Joe Manchin (West Virginia).

64% Will Skip Black Friday-like Situations

Eight to ten percent more Americans are choosing to avoid the crowds this holiday season than last by shopping online. The Rasmussen Reports survey shows that 64% say they'll do at least some of their holiday shopping online this year. Americans are becoming more and more tech saavy; however, 35% still say they will not go online for any of their holiday shopping.

More Bad Economic News for the Dems

Jobs slipped again in September to levels that were even worse than expected. Private employers cut 39,000 jobs after a gain of 10,000 in August. Analysts expected the private sector to only cut 24,000 jobs, but they were once again wrong.

This could not be welcomed news for Democrats, who are hoping for anything to stop the bleeding during this campaign season in which the pollsters are predicting a donkey thrashing. 

The Last Ditch Effort of House Dems

Because Pelosi knew she didn't have the numbers, she pushed off a vote on the expiring Bush tax cuts until after the November elections. However, she couldn't prevent some of her Democratic House members from voicing their opposition to the President's plan to extend only some of the tax savings. A group of 47 House Democrats sent her a letter today, detailing their wish to continue all of the Bush-era tax cuts and "breaking ranks" with Obama and Pelosi, as they failed to do during the health care debate. 

The letter addressed Pelosi and urged her to maintain current tax levels as, "Raising taxes...could discourage individuals and businesses from saving and investing." The letter was signed by several vulnerable freshman hoping to keep their seats in the fall. 

I hate to break it to the 47, but no amount of letter writing can undo the health care and stimulus legislation they helped enact. When they go to the polls, voters will not forget that they traded favors for votes on critically important legislation that the country did not want.

75% Believe Congress Should Take a Pay Cut Until they Balance the Budget

Although 75% of overall voters believe that Congress should balance the budget or take a pay cut, the number rises to 85% when considering only mainstream voters and failing to factor in the liberal "political class," 74% of which do not think congress should see a decline in pay until they balance the budget. Who are these morons? 

There's That Word Again

Again, reporters are saying that claims for unemployment benefits "unexpectedly" rose last week according to the latest report. Whether they expected it or not, it is the reality which will be the final nail in the coffin of the Democrat's attempt to hold onto power in November. After all, claims for unemployment benefits are now at a nine-month high, the highest since mid-November of 2009, and probably only decreased this year due to the employment of census workers.

With the overspending and general policies employed by the Democrats, it is hard to see how the numbers could go anywhere but up as businesses are weary of new regulation and the invariable tax hike that is all but certain for 2011. One analyst said that the trend of unemployment claims indicates that the economy "ran into a wall in August." Democratic candidates won't be able to go over, under or through this wall they created in November. 

Unemployment Expected to Remain Stable or Rise Slightly Tomorrow

Analysts are projecting that unemployment will remain flat this month at 9.5%, and may even rise slightly. The report will be revealed tomorrow but the government said today that first-time claims for unemployment benefits rose last week to their highest level in four months. Specifically, they rose by 19,000 to a seasonally adjusted 479,000 and did not drop slightly, as analysts expected. This is the first time experts have predicted a potential increase in the overall unemployment numbers since the crisis began, suggesting the possibility of a double dip situation. However, most economists are denying such a scenario, while still admitting that businesses are not hiring and the recovery is in serious jeopardy.

Nice Vetting, White House

Once again, Obama's administration has made a rookie mistake. Last week, President Barack Obama held a public gathering and asked Congress to extend unemployment insurance. Once of his props, Leslie Macko, stood next to him as his example of a person in need of the extension. The problem? Apparently, Macko was found guilty of prescription drug fraud in March 2009, and one month later, she lost her job as an esthetician at a fitness center. Specifically, Obama lamented:

We need to extend unemployment compensation benefits for women like Leslie Macko, who lost her job at a fitness center last year, and has been looking for work ever since. Because she's eligible for only a few more weeks of unemployment, she's doing what she never thought she'd have to do. Not at this point, anyway. She's turning to her father for financial support.

So far, the White House has declined to comment. I would, too, as how hard could it be for his people to run a background check? This is just another easily avoidable boneheaded move on the part of his administration.   

Congress Hands the Fed More Power

The passage of the financial regulatory bill through the Senate signals the loss of Ron Paul's efforts to limit the power of the Federal Reserve - his lifelong mission in congress. Not only did the bill fail to scale back the powers of the Fed, but it actually expanded them, ensuring that it will remain the pre-eminent regulator in the industry. 

Paul has argued for years that the Fed's supervisory oversight of banks and interest-rate decisions caused the meltdown of 2008 and he hoped to put serious controls on the body to prevent similar future harm. Instead, congress gave the Fed more power and more tools to ostensibly prevent financial crises by making it the primary regulator for large  financial firms of all kinds, rather than just banks. 

This comes along with a sweeping rewrite of the financial rules which, of course, greatly expands the power of government over banks, markets and the industry. Many analysts familiar with the legislation say the usurpation of federal power in the bill is second only to those extended during the Great Depression. 

The depression-era bills charged the Fed with promoting price stability and maximum sustainable employment. The new bill adds the maintenance of financial stability to the list of Fed responsibilities. Specifically, it will be responsible for deciding whether the council should vote to break up "too big to fail" companies if they threaten the stability of the financial system. It will also now have the power to force any large financial companies—not just banks—to boost capital and liquidity, which means it will regulate large hedge funds.

The power to decide who is too big and thus, tamper-worthy, will not involve a mathematical calculation. Politicians will intervene and the Fed will act accordingly. How can we give the federal government this much power over our "free" market?  It is an utter disgrace.  

Double Dip Reality

Not surprisingly, all of the reports for the leading economic indicators are gloomy. Unemployment claims are up, new home sales are down 30% and manufacturing is coming to a halt. All signs point to the double dip scenario, which most economists denied until now. However, there is no denying the direction and size of the numbers. New claims for job benefits jumped by 13,000 to a seasonally adjusted 472,000, the highest level since March, and analysts expect the unemployment rate to edge up slightly tomorrow.

Also, since the recession, the jobless have enjoyed an extra 72 weeks of benefits over and above the 26 normally given. Democrats want to vote to extend them past the 98 week mark, but Republicans are fighting them tooth and nail since they want the extension funded from the remaining stimulus funds. Of course, Democrats want to pile the price tag onto the debt as "emergency funds." This gridlock allegedly troubles economists who say we need to provide jobless benefits so the unemployed can spend the government money and "stimulate growth." It really worries me to think top economists are counting on unemployment benefits to pull us out of the recession. How much can a $400/week unemployed individual stimulate the economy? I expect this type of stupidity from Nancy Pelosi (http://www.foxnews.com/politics/2010/07/01/pelosi-unemployment-checks-best-way-create-jobs/), but from economists?

To make matters worse, the housing market is still plummeting. New home sales fell 30% in May as tax credits expired and the pool of those with the ability to obtain credit shrank. Most analysts expect another 8 to 10% drop in housing prices, which is likely to be followed by more foreclosures.

The industrial sector's growth also slowed in the U.S. as well as in 16 other countries tied to our currency.

More Government Spending?

As the market plunged today, I noticed that some people still don't get it and probably never will.  Eric Cinnamond, portfolio manager at Intrepid Capital Management, said, "We are still in a de-leveraging mode.  Continued government spending is the only way out."  Good grief.

'Arbitrary and Capricious' Ban Lifted on Deepwater Drilling

New Orleans United States District Court judge Martin Feldman issued an injunction today lifting the reactionary six-month moratorium on deepwater drilling imposed by Obama a few weeks ago in response to the BP oil spill. Feldman stated that he could see no reasonable rationale for Obama's ban on drilling in waters deeper than 500 feet "to give a presidential commission time to study improvements in the safety of offshore operations."  The injunction is effective immediately and prohibits the government from enforcing the ban.

Apparently, the government told Feldman the ban was based on a report following the sinking of the rig, which attempted to link further drilling to "public safety," but Feldman stated that he could find no rational relationship between the findings and the scope of the moratorium. “The blanket moratorium, with no parameters, seems to assume that because one rig failed and although no one yet fully knows why, all companies and rigs drilling new wells over 500 feet also universally present an imminent danger.” Feldman cause the public policy "arbitrary and capricious" also also noted that the ban would cause irreparable economic injury in the region as oilfield companies estimated that the ban could cost as many as 20,000 jobs if it lasted 18 months.

Finally, someone called Obama and his cronies out on their BS.  It would've been more fun to hear the judge substitute "arbitrary and capricious" with "horse sh*t," but I'll take what I can get.

Double Dip Looks More Likely with Rise of Jobless Claims

Last week, the number of people filing new claims for unemployment benefits rose by 12,000 to a seasonally adjusted 472,000. First-time jobless claims have stayed near 450,000 since the beginning of the year after falling in late 2009 until now. Despite the sluggish pace at which jobs have recovered, analysts continue to predict that claims will fall week after week and are wrong week after week. Layoffs persist and will likely remain the rule until the stimulus wears off, housing prices take another dip and we finally hit the bottom.

Unemployment Dips Slightly to 9.7%, Boosted by Census Workers

According to the latest jobs report http://www.cnbc.com/id/37507250, unemployment fell slightly to 9.7% from 9.8% despite predictions that it would experience a larger decline this month. In fact, outside of the hiring of 411,000 temporary census workers, there was little hiring by private employers as that sector added just 41,000 jobs, down from 218,000 in April and the fewest since January. The worst part about the numbers?  Apparently, the government intentionally hired more census workers than it needed http://cnsnews.com/news/article/67156 and several census workers claim the government hired and fired them several times to inflate job numbers by counting every subsequent hire http://www.realclearpolitics.com/video/2010/06/03/census_worker_claims_job_numbers_are_being_inflated.html.

One Cue We Should Take from the Brits

Most Americans, including me, have a hard time understanding how the Brits elect their Prime Minister. They operate under a very complicated parliamentary process that left the new Prime Minister, David Cameron, begging a minor party candidate to build a coalition government with him to defeat Gordon Brown. Due to this coalition, I thought Cameron, of the Conservative Party, would be hamstrung in cutting Britain's budget, and he may be, but he announced £6B worth of spending cuts today. Of course, a cut this small  normally would not make the headlines, but this one did, because of the character of the items that were slashed - namely, ministerial cars and chauffeurs. All high ranking government officials in jolly ole England will now have to huff it to work like the rest of us unless they occupy one of four offices: the Prime Minister, the Foreign and Commonwealth Secretary, the Home Secretary and the Chancellor of the Exchequer.

As Steyn so deftly comments, "This is gesture politics. But symbols are important. Citizen legislators in democratic societies are not a ruling class. They should walk among us, rather than be swanking about on the public dime. If you want a chauffeured limo, get a gig in the private sector and earn it. And that goes for Nancy Pelosi's ludicrous Botox One jet, too." How soon do you think Pelosi and American politicians will follow suit? I would put all my money on "never" even though their approval ratings are apocalyptic and November is around the corner, as I have never seen such an unapologetic and entitled bunch inhabit Washington. 

There it is again: "An Unexpected Rise in Jobless Claims"

Why do they continuously use the word "unexpected" to describe near constant rises in unemployment claims?  How about "unforeseen, unanticipated, unpredicted, surprising, startling, astonishing, sudden, out of the blue?"  Seriously, the alleged unexpected spikes have occurred more months than not, so I am dumbfounded by the verbiage.  Why are all the analysts predicting lower unemployment numbers when the economy is lagging at home and there are deepening fears about Europe's fiscal viability?

As a few economists have postulated, the economy is on target to take another serious dip as the market is overinflated and needs to readjust.  The S&P 500 is now in correction territory, down over 10% from its high and the Dow is down 9%.  As an analyst aptly stated, there are a "tremendous number of indicators" that suggest the whole market is oversold and "a sharp rally is at hand."  All of this will lead to expected increases in jobless claims.  I'm just waiting for someone to print it.