Still in the Woods: Jobless Claims, Inflation on the Rise

Initial state unemployment benefits claims rose 31,000 to 473,000 this week. (The expectation was a slight decrease to 430,000.) More troubling, gasoline rose 1.4% while food prices rose .4% after increasing 1.4% in December. With joblessness and inflation on the rise, many are begging the federal reserve to raise interest rates. However, they have projected no intent to do so.

Suburban Homelessness on the Rise

"The U.S. Department of Housing and Urban Development's annual survey last year found homelessness remained steady at about 1.6 million people, but the percentage of rural or suburban homelessness rose from 23 percent to 32 percent." The spike of first-time homeless is credited to job loss and foreclosures in the country's suburbs. Sadly, about 60% of the county's homeless are children 9 and younger.

52% Say They Wouldn't Reelect Obama

A CNN Poll found that voters opposed Obama's reelection 52 to 44 among both all Americans and registered voters. Four percent had no opinion.

Bayh Bailing

My decision was not motivated by political concern," Bayh said. "Even in the current challenging environment, I am confident in my prospects for re-election." Riiight. The Democrats can repeat the mantra that "there are more Republicans retiring than Democrats," but it doesn't change the fact that the vacated Democratic seats are far more vulnerable than those held by retiring Republicans. In fact, for the first time, many commentators are predicting a win in ten states for the GOP in the Senate, which would give them control of the Senate. At this stage, lobbyist and former Republican Senator Dan Coats, looks like the favorite for the seat. He will likely be challenged by either Reps. Baron Hill or Brad Ellsworth, one of which will be chosen by their party to run. Bayh's bow out at least signals that someone in his party understood the consequences of Massachusetts. In fact, Bayh warned his party not to ignore the Massachusetts Senate race as it would "lead to even further catastrophe" for the party and that "if you lose Massachusetts and that's not a wake-up call, there's no hope of waking up." At this point, it seems most of them are comatose.

Pol Follows Through on Promise: Christie Freezes Spending and Fires Up NJ Dems

Chris Christie, love him or hate him, is doing what he promised to do if elected New Jersey's Governor - he announced a budget freeze on state spending to address budget shortfalls that could soon bankrupt the state. Specifically, he declared a fiscal emergency and announced drastic cuts on aide to school districts that have excess surpluses as well as the embattled New Jersey transit system. Christie said that he hoped it would force management in these areas to stop wasting money and renegotiate unsustainable union contracts that keep the undeserved employees in the transit system and worse, the state's schools. See...http://teachersunionexposed.com/protecting.cfm

Jobs Bill Won't Create...Ummm...Jobs?

No one expects the newly proposed jobs bill to actually create jobs. Neither the White House nor leading economists believe that it will be effective as companies are unlikely to hire workers to receive a tax break. Simply put, before businesses hire, they need increased demand, which would spur more work for their employees, which would create more revenue to pay new workers. Specifically, "a company could save a maximum of $6,621 if it hired an unemployed worker after the bill is enacted and paid that worker at least $106,800 — the maximum amount of wages subject to Social Security taxes — by the end of the year. The company could get an additional $1,000 on its 2011 tax return if it kept the new worker for at least a full year." Obviously, companies are not going to outlay $106,800 to receive a $7621 tax credit. This seems like simple economics to me. Why can't anyone in Washington devise an idea that would spur demand and job growth?

Idle Chinese Threats

Chinese officers within the People's Liberation Army (PLA) suggested to the Chinese government that it dump American bonds to punish us for out recent $6.4 billion arms sales to Taiwan. Word of this came after the Chinese government's renewal of an admonishment to Obama not to meet with the Dalai Lama, who they consider a traitor. (Obama did not meet with him after the initial mandate, but plans to meet him on his next trip to Asia.) A massive divestment of U.S. bonds could significantly destabliize the market as China has the world's biggest pile of foreign currency reserves, and approximately $798.9 billion of it is in U.S. treasuries. However, many see these threats as idle, as a negative impact on our economy, and the dollar, would have a devastating impact on China's U.S. holdings. I assume there will be no talk from Beijing about dumping bonds in the future but that there will be a continuous flow of skits like this (http://www.youtube.com/watch?v=pL9Dd2IT7EU) on SNL.