Washington, D.C. Becomes America’s Richest City
Obama’s $4 trillion army settles into its barracks
Things are tough all over… except for Washington, D.C. By vacuuming four trillion dollars out of the private economy, President Obama has brought a deficit-fueled boom to the seat of the national bureaucracy he loves. Bloomberg News does the honors as Silicon Valley is dethroned, and America’s new richest city is crowned:
Federal employees whose compensation averages more than $126,000 and the nation’s greatest concentration of lawyers helped Washington edge out San Jose as the wealthiest U.S. metropolitan area, government data show.
The U.S. capital has swapped top spots with Silicon Valley, according to recent Census Bureau figures, with the typical household in the Washington metro area earning $84,523 last year. The national median income for 2010 was $50,046.
This has not escaped the notice of those who concern themselves with income disparity, and they’re feeling a bit queasy about it:
The figures demonstrate how the nation’s political and financial classes are prospering as the economy struggles with unemployment above 9 percent and thousands of Americans protest in the streets against income disparity, said Kevin Zeese, director of Prosperity Agenda, a Baltimore-based advocacy group trying to narrow the divide between rich and poor.
“There’s a gap that’s isolating Washington from the reality of the rest of the country,” Zeese said. “They just get more and more out of touch.”
I’m all in favor of narrowing the divide between rich and poor myself, provided it’s done by making the poor richer. Flooding D.C. with six-figure bureaucrats until it turns into El Dorado is the exact opposite of that. The very policies that helped Obama surround himself with a suitably magnificent aristocracy are killing the poor. As money is siphoned out of the private sector, and the national debt accumulates with staggering interest payments, opportunity withers. Not coincidentally, Obama has brought the number of people living in poverty to record highs.
There is no more concise, and devastating, symbol of Obama’s failure than watching Washington, D.C. become the richest city in the nation, while Gross Domestic Product flounders and 9% unemployment drags on for years. Worst of all, whoever gets the job of cleaning up this mess will be accused of wanting to make unemployment worse, when they start sending those surplus $126,000 bureaucrats home.
Big-government economic policies are impoverishing America
A majority of Americans disapprove of what President Obama has done in office. He promised hope and change but delivered disappointment and stagnation. The unemployment rate is stuck at 9.1 percent. The poverty rate is at 15.1 percent, tied for the worst performance since the Census started tracking numbers in 1959. White House policies of class warfare and redistribution are impoverishing America, and the public is starting to feel worked over.
While economic scorekeepers say the recession officially ended in June 2009, few Americans would say they’ve felt much relief. A new study by Gordon Green and John Coder of Sentier Research explains this phenomenon. They found inflation-adjusted median household income fell 6.7 percent from $53,518 in June 2009 to $49,909 in June 2011. That’s on top of the 3.2 percent drop that took place during the official recession period from December 2007 and June 2009. Altogether, the average household lost $5,400 in spending ability - a near 10 percent drop in the standard of living.
One reason for this is that people who have found jobs have had to settle for a pay cut. Princeton University’s Henry Faber found that, on average, when an employee lost a job and then got rehired during the recession, the new position paid 17.5 percent less than the old one. It’s no wonder that confidence levels are low, and Americans, even those with jobs, are being careful with spending.
Not surprisingly, the biggest decline was found in households where the head is unemployed. Their income fell more than 18 percent. During the recession, the average duration of unemployment increased from 16.6 weeks in December 2007 to a shade over 24 weeks by June 2009. That figure is now 40.5 weeks, the longest it has been in more than six decades. The longer a person is unemployed, the harder it is for him to find a job, as job skills erode and potential employers question whether it might be more prudent to hire someone else without big gaps in their work history.
Mr. Obama’s solution involves having the federal government declare the long-term unemployed a legally protected class. His American Jobs Act would subject businesses to frivolous lawsuits if they decide against hiring someone who has been jobless for an extended time. Doing so would serve as one more disincentive for companies to hire or hold interviews for open positions, making it even harder for the jobless to find work.
By passing the long-pending free-trade agreements with South Korea, Colombia and Panama this week, Congress took the first small steps toward improving the U.S. economic predicament. American agricultural exports are likely to be the largest beneficiaries, but various service sectors would also see a boost. The South Korea deal alone is expected to generate an increase in U.S. gross domestic product of $10-12 billion. That means more job creation.
Ultimately, Americans will not find their pocketbooks thickening so long as Uncle Sam strangles entrepreneurs with regulatory red tape. Companies need to have certainty that they will be able to keep the proceeds of their investments in the future before they will start hiring again and pay their employees more.
So much for Obama's 'new era of open government'
A secret meeting on transparency in government was held by the Office of Information Policy in the Justice Department headed by the President’s attorney general, Eric Holder.
Justice Department documents made public Tuesday by Judicial Watch exposed an "accomplishment" of President Obama that his many admirers and enablers in the liberal mainstream media likely don't want to talk about: a secret meeting on transparency in government. It happened on Dec. 7, 2009, and was convened by the Office of Information Policy in the Justice Department headed by Obama's attorney general, Eric Holder. The meeting's purpose was to train Freedom of Information Act officers from federal agencies how to respond to FOIA requests, including tips on resolving disputes over what government documents can be made public.
Judicial Watch obtained a series of pre-conference emails in which Justice Department officials sought approval from White House media officials for closing the meeting to reporters. That the December meeting was closed was no isolated incident. In one of the emails, Melanie Pustay, OIP's director, said she has "always held parallel meetings, one for agency 'ees [i.e. government employees] and then one that is open." We can only wonder what Pustay tells government FOIA officers that she doesn't want journalists to hear.
It was Obama who said on his first day in the Oval Office that he wanted his subordinates in the executive branch to respond to FOIA requests "with a clear presumption: In the face of doubt, openness prevails." Apparently that memo didn't make it to the Justice Department's OIP, which oversees executive branch compliance with the FOIA. As Judicial Watch's Tom Fitton said, "only in Washington would political appointees think it appropriate to keep secret a government workshop on transparency."
Unfortunately, keeping the meeting secret isn't the only area in which the Obama administration's record on this issue has proven to be woefully short of what the president promised. In both the Fast and Furious and Solyndra scandals, for example, Obama appointees have held back thousands of documents legitimately sought by congressional investigators while defending their refusal with arguments coined by President Nixon.
Similarly, Obama's secretary of labor, Hilda Solis, has gutted transparency regulations that required labor unions to disclose information about the organizations' financial health, including union officers' total compensation packages. Also killed was a requirement to report on union trusts, which often function like offshore accounts for corporations in providing a means of hiding assets. And gone is a requirement that would have made unions report on "no-show" jobs -- positions for which the union is paid but nobody actually does the work. The biggest losers when unions are able to conceal such information are union members.
That is likely why, as The Washington Examiner reported Tuesday, a recent survey of union households for Americans for Limited Government found that "94 percent of the respondents agreed that 'union officials and executives should have to disclose their salaries and benefits connected to their official union office as a way of making them accountable to their members.' " When it comes to transparency, Obama sides with bureaucrats against taxpayers and union bosses against union members.
How California Drives Away Jobs and Business
The Golden State continues to incubate cutting-edge companies in Silicon Valley, but then the successful firms expand elsewhere to avoid the state's tax and other burdens.
California has long been among America's most extensive taxers and regulators of business. But it had assets that seemed to offset its economic disincentives: a sunny climate, a world-class public university system that produced a talented local work force, sturdy infrastructure that often made doing business easier, and a record of spawning innovative companies.
No more. In surveys, executives regularly call California one of the country's most toxic business environments, while the state has become an easy target for economic development officials from other states looking to lure firms away.
In a 2004 survey of California executives by the consulting firm Bain & Company, half said they planned to halt job growth within the state. By 2011, according to a poll by a California coalition of businesses and industries, 84% of executives and owners said that if they weren't already in the state, they wouldn't consider starting up there, while 64% said the main reason they stayed was the difficulty of relocating their particular kind of business. For several years in a row, California has ranked dead last in Chief Executive magazine's poll about states' business environments.
Labor groups, environmentalists and some politicians jeer at these surveys. But the hard numbers tell a disturbing story.
From 1994 through 2008, the latest year for which data are available in the National Establishment Time Series database (a joint project of Walls & Associates and Dun and Bradstreet), California ranked 47th among the states in net jobs created through business relocation, losing 124,000 more jobs to other places than it gained from other places. Meanwhile, it generated just 285,000 more jobs from new businesses than it lost to business failures, placing 29th in the country—while first-place Florida gained 2.4 million net jobs. Demographer Wendell Cox has noted that close to none of those 285,000 net jobs were created between 2000 and 2008, meaning that start-ups haven't contributed to California employment for more than a decade.
The state continues to incubate cutting-edge companies in places like Silicon Valley, where investment remains vigorous, thanks in part to the area's muscular venture-capital industry. Yet its successful firms increasingly expand elsewhere.
In 2007, Google built a new generation of server farms in Oregon; the following year, Intel opened a $3 billion production facility near Phoenix. Earlier this year, eBay, based in San Jose, Calif., said it would add some 1,000 back-office jobs in Austin, Texas, over the next decade. Hank Nothhaft, former CEO of the San Jose-based micro-electronics firm Tessera, has estimated that Silicon Valley lost one-quarter of its computer, microchip and communications-equipment manufacturing jobs from 2001 to 2008.
A suffocating regulatory climate has a lot to do with the state's bad business numbers. Writing in the California Political Review this summer, Andrew Puzder, chief executive of California-based CKE Restaurants—which operates 3,000 eateries nationwide—called his company's home state "the most business-unfriendly state we operate in."
CKE, which runs Hardee's and Carl's Jr., has stopped opening restaurants in California, where the regulatory process can take up to two years. But it plans to open 300 in Texas, where the start-up time can be six weeks and opening costs $200,000 less than in California.
A 2009 study by two California State University finance professors estimated that regulation cost the state's businesses $493 billion annually, or nearly $135,000 per company. Sanjay Varshney and Dennis Tootelian estimated that the burden pushed California's overall employment down by 3.8 million jobs.
Ironically, green-promoting California is now even losing green manufacturing jobs.
Earlier this year Bing Energy, a fuel-cell maker, announced that it would relocate from Chico in San Bernardino County to Tallahassee, Fla., where it expected to hire nearly 250 workers. Solar Millennium, an energy company, canceled plans to build a facility in Ridgecrest, Calif.—an undertaking that would have created 700 temporary jobs and 75 permanent ones—after lengthy delays caused by state environmental reviews, including one on the project's impact on the Mojave ground squirrel. AQT Solar, an energy-cell maker based in Sunnyvale, will employ 1,000 people at a new 184,000-square-foot manufacturing plant—in South Carolina. Then there's Biocentric Energy Holdings, a Santa Ana energy company that moved to Salt Lake City; and Calisolar, a Santa Clara–based green-energy company building a factory in Ontario, Canada, that will employ 350 workers.
Again, no wonder: California taxes are high and hit employers and employees hard. While the highest individual income-tax bracket, 10.3%, applies to million-dollar earners, the second-highest, 9.3%, kicks in at $47,000. Even in high-tax New Jersey, the top bracket of 8.97% doesn't kick in until filers hit $500,000 in income. California also has a high corporate tax rate of 8.84%.
The state's legal environment is a mess, too. A so-called consumer rights law allows trial lawyers to sue firms for minor violations of California's complex labor and environmental regulations. After lawyers kept sending out threatening letters in mass mailings to thousands of small businesses, demanding payments in return for not suing over purported minor paperwork violations, outraged voters passed the Prop. 64 reform initiative in 2004. Yet that only forced suing attorneys to first show that they were representing plaintiffs who claimed to have been harmed.
California also allows plaintiffs to sue for damages over even minor violations of the Americans With Disabilities Act's architectural guidelines for accommodating the disabled. One plaintiff alone has sued 1,000 businesses, mostly restaurants, and won an average settlement of $4,000. Using an obscure provision of California labor law that requires stores to have enough seats for all employees, trial attorneys have filed about 100 lawsuits, claiming damages of up to $100 per employee, against chain retailers.
Today, California seems to be following the path first trod by New York state, which dominated the nation's economy through the early part of the 20th century, only to see massive outmigration of jobs and people, and subpar employment growth as its taxes and regulations rose.
My Twitter.com identity: jonjayray. I have deleted my Facebook page as I rarely access it. For more blog postings from me, see TONGUE-TIED, EDUCATION WATCH INTERNATIONAL, GREENIE WATCH, POLITICAL CORRECTNESS WATCH, GUN WATCH, FOOD & HEALTH SKEPTIC, AUSTRALIAN POLITICS, IMMIGRATION WATCH INTERNATIONAL, EYE ON BRITAIN and Paralipomena
List of backup or "mirror" sites here or here -- for readers in China or for everyone when blogspot is "down" or failing to update. Email me here (Hotmail address). My Home Pages are here (Academic) or here (Pictorial) or here (Personal)
The Big Lie of the late 20th century was that Nazism was Rightist. It was in fact typical of the Leftism of its day. It was only to the Right of Stalin's Communism. The very word "Nazi" is a German abbreviation for "National Socialist" (Nationalsozialist) and the full name of Hitler's political party (translated) was "The National Socialist German Workers' Party" (In German: Nationalsozialistische Deutsche Arbeiterpartei)