Thursday, January 01, 2015
Economy grows in spite of Obama
Economic recovery grows from private sector, not government
It only took six years, but we’re finally starting to see the U.S. economy kick into gear. This isn’t a story of government-directed growth, but the opposite — Washington’s role in the economy starting to shrink after years of Obama administration activism. The private sector is starting to take over.
Let’s start with the positive news. Economic output soared in the third quarter at a rate of 5 percent. That comes on top of 4.6 percent growth in the second quarter. It appears that the U.S. economy has clawed out of its anemic 2 percent growth rut of the past five years and that we are now shifted into a higher gear with 3 percent-plus as the new normal.
The growth was propelled by a big rise in business investment, up nearly 9 percent, personal consumption up 3.2 percent and exports up 4.5 percent. Government spending, which is a negative for the economy, grew by 4.4 percent thanks to a big rise in military spending, but domestic spending is still restrained. The news was so good that even the threat that the Federal Reserve will now have an excuse to raise interest rates couldn’t deter the bulls on Wall Street.
What’s generating the growth? A huge factor has been the fall in energy costs. As the oil price fell from $105 a barrel this summer to close to $70 by September, the cost of oil imports tumbled. Imports fell by nearly 2 percent, and this alone added almost 0.2 percentage points to gross domestic product growth.
Even that badly understates the economic windfall from cheap energy. Production costs fall when energy costs do, so the supply of American-produced, non-oil and non-gas products, such as manufactured goods, rise when gas is cheap. With prices lower now in this quarter, the good news story rolls on. Thank you, fracking.
Businesses are clearly feeling less fearful about investing, and some of the negative, wet-blanket effect of Mr. Obama’s anti-business, anti-shareholder agenda has dissipated as the Republican Congress repels his worst ideas — cap and trade, minimum wage hikes, new taxes on the energy industry, and massive new spending initiatives out of Washington. Gridlock now looks to be built into the political system for the next two years, and in many ways that’s reassuring.
One troubling feature of the GDP report was that the largest contributor to personal consumption growth was health care spending.
This is the Obamacare effect — and the big rise in spending is more concrete evidence that Obamacare is driving the cost curve up, not down. Rising health costs is nothing to celebrate. It’s further evidence that Obamacare is still a giant negative on the real economy, but the betting is Congress will at the least trim back some of its worst features.
Despite the boost in military spending in the last quarter, the biggest story of the U.S. economy over the past three years has been the retrenchment of government spending. Federal spending has fallen from above 23 percent of GDP in 2011 to just under 20 percent of GDP in the last quarter, according to an analysis by Dan Clifton of Strategas, an economic policy consulting firm. This is creating an anti-Keynesian boost to growth, because the government is taking fewer private-sector resources each month.
As I have noted many times in these columns, this recovery from recession is still nearly $2 trillion behind where it should be if we had a Reagan-paced boom. This is still one of the most anemic recoveries, though it is clearly picking up steam. Wages are still flat for most workers.
Republicans could keep growth in the 3 percent to 4 percent range by picking off the low-hanging fruit of economic policy proposals. These include the Keystone XL pipeline, corporate tax reform and slamming the brakes on the Obama regulatory assault. It would also be helpful for Congress to pass a law allowing the repatriation of foreign capital back to the United States at a 5 percent tax rate, to provide even more jobs.
Mr. Obama, despite his executive branch power grabs, is mostly a lame duck, and that’s what have been waiting for. Businesses and investors now believe that less is more when it comes to Washington. For the most part, they are probably right. This is a recovery that the private sector is creating. And, no, Mr. President, you didn’t build that.
Are Facts Obsolete?
Some of us, who are old enough to remember the old television police series "Dragnet," may remember Sgt. Joe Friday saying, "Just the facts, ma'am." But that would be completely out of place today. Facts are becoming obsolete, as recent events have demonstrated.
What matters today is how well you can concoct a story that fits people's preconceptions and arouses their emotions. Politicians like New York mayor Bill de Blasio, professional demagogues like Al Sharpton and innumerable irresponsible people in the media have shown that they have great talent in promoting a lynch mob atmosphere toward the police.
Grand juries that examine hard facts live in a different world from mobs who listen to rhetoric and politicians who cater to the mobs.
During the controversy over the death of Trayvon Martin, for example, a member of the Congressional Black Caucus said that George Zimmerman had tracked Trayvon Martin down and shot him like a dog. The fact is that Zimmerman did not have to track down Trayvon Martin, who was sitting right on top of him, punching him till his face was bloody.
After the death of Michael Brown, members of the Congressional Black Caucus stood up in Congress, with their hands held up, saying "don't shoot." Although there were some who claimed that this is what Michael Brown said and did, there were other witnesses -- all black, by the way -- who said that Brown was charging toward the policeman when he was shot.
What was decisive was not what either set of witnesses said, but what the autopsy revealed, an autopsy involving three sets of forensic experts, including one representing Michael Brown's family. Witnesses can lie but the physical facts don't lie, even if politicians, mobs and the media prefer to take lies seriously.
The death of Eric Garner has likewise spawned stories having little relationship to facts. The story is that Garner died because a chokehold stopped his breathing. But Garner did not die with a policeman choking him.
He died later, in an ambulance where his heart stopped. He had a long medical history of various diseases, as well as a long criminal history. No doubt the stress of his capture did not do him any good, and he might well still be alive if he had not resisted arrest. But that was his choice.
Despite people who say blithely that the police need more "training," there is no "kinder and gentler" way to capture a 350-pound man, who is capable of inflicting grievous harm, and perhaps even death, on any of his would-be captors. The magic word "unarmed" means nothing in practice, however much the word may hype emotions.
If you are killed by an unarmed man, you are just as dead as if you had been annihilated by a nuclear bomb. But you don't even know who is armed or unarmed until after it is all over, and you can search him.
Incidentally, did you know that, during this same period when riots, looting and arson have been raging, a black policeman in Alabama shot and killed an unarmed white teenager -- and was cleared by a grand jury? Probably not, if you depend on the mainstream media for your news.
The media do not merely ignore facts, they suppress facts. Millions of people saw the videotape of the beating of Rodney King. But they saw only a fraction of that tape because the media left out the rest, which showed Rodney King -- another huge man -- resisting arrest and refusing to be handcuffed, so that he could be searched.
Television viewers did not get to see the other black men in the same vehicle that Rodney King was driving recklessly. Those other black men were not beaten. And the grand jury got to see the whole video, after which they acquitted the police -- and the media then published the jurors' home addresses.
Such media retribution against people they don't like is part of a growing lynch mob mentality. The black witnesses in Missouri, whose testimony confirmed what the police officer said, expressed fears for their own safety for telling what the physical evidence showed was the truth.
Is this what we want? Grand juries responding to mobs and the media, instead of to the facts?
How Liberals Use Black People
By Walter E. Williams
Back in the day, when hunting was the major source of food, hunters often used stalking horses as a means of sneaking up on their quarry. They would walk on the opposite side of the horse until they were close enough to place a good shot on whatever they were hunting. A stalking horse not only concealed them but also, if their target was an armed man and they were discovered, would take the first shot. That's what blacks are to liberals and progressives in their efforts to transform America — stalking horses.
Let's look at some of the ways white liberals use black people. One of the more obvious ways is for liberals to equate any kind of injustices suffered by homosexuals and women to the black struggle for civil rights. But it is just plain nonsense to suggest any kind of equivalency between the problems of homosexuals and women and the centuries of slavery followed by Jim Crow, lynching, systematic racial discrimination and the blood, sweat and tears of the black civil rights movement.
The largest and most powerful labor union in the country is the National Education Association, with well over 3 million members. Teachers benefit enormously from their education monopoly. It yields higher pay and lower accountability. It's a different story for a large percentage of black people who receive fraudulent education. The NEA's white liberals — aided by black teachers, politicians and so-called black leaders — cooperate to ensure that black parents who want their children to have a better education have few viable choices.
Whenever there has been a serious push for school choice, educational vouchers, tuition tax credits or even charter schools, the NEA has fought against it. One of the more callous examples of that disregard for black education was New York Mayor Bill de Blasio's cutback on funding for charter schools where black youngsters were succeeding in getting a better education. That was de Blasio's way of paying back New York's teachers union for the political support it gave him in his quest for the mayor's office.
White liberals in the media and academia, along with many blacks, have been major supporters of the recent marches protesting police conduct. A man from Mars, knowing nothing about homicide facts, would conclude that the major problem black Americans have with murder and brutality results from the behavior of racist policemen. According to the Bureau of Justice Statistics, there are about 200 police arrest-related deaths of blacks each year (between 300 and 400 for whites). That number pales in comparison with the roughly 7,000 annual murders of blacks, 94 percent of which are committed by blacks. The number of blacks being murdered by other blacks is of little concern to liberals. Their agenda is to use arrest-related deaths of blacks to undermine established authority.
Liberals often have demeaning attitudes toward blacks. When Secretary of State John Kerry was a U.S. senator, in a statement about so many blacks being in prison, he said, "That's unacceptable, but it's not their fault." Would Kerry also say that white prison inmates are also faultless? Johns Hopkins University sociologist Andrew Cherlin told us: "It has yet to be shown that the absence of a father was directly responsible for any of the supposed deficiencies of broken homes. ... (The problem) is not the lack of male presence but the lack of male income." The liberal vision is that fathers and husbands can be replaced by a welfare check.
Liberals desperately need blacks. If the Democratic Party lost just 30 percent of the black vote, it would mean the end of the liberal agenda. That means blacks must be kept in a perpetual state of grievance in order to keep them as a one-party people in a two-party system. When black Americans finally realize how much liberals have used them, I'm betting they will be the nation's most conservative people. Who else has been harmed as much by liberalism's vision and agenda?
Obamacare's Annus Horribilis
There's no candy coating the truth: Obamacare has had a very terrible, horrible, crappy, none-too-happy year. What it really means is that the victims of Obamacare -- taxpayers, health care consumers, health care providers, employers and employees -- have had a hellish, nightmarish 2014.
Let's start with premiums. President Candy Land promised that he'd "lower premiums by up to $2,500 for a typical family per year." But premiums for people in the individual market for health insurance have spiked over the last year. In fact, Forbes health policy journalist Avik Roy and the Manhattan Institute analyzed 3,137 counties and found that individual market premiums rose an average of 49 percent.
The U.S. Department of Health and Human Services itself admitted this month that average premiums will rise at least five percent for the lowest-cost plans offered by federal Obamacare health care exchanges. Democrats' reaction? Obamacare rate shock doesn't matter ... because government is redistributing the burden and taxpayers are footing the bill! HHS crowed this week that nearly 90 percent of exchange enrollees received public subsidies in order to pay their premiums.
"Affordable" doesn't mean what White House truth-warpers says it means -- just like everything else they've spewed about the doomed federal takeover of health policy in America.
As the White House tries to hype year-end enrollment numbers and hide Obamacare-imposed cancellations, just remember that the administration got caught this fall cooking the books by including 380,000 dental plan subscribers that have never been counted before. Innocent oopsie? The "erroneous" inflation just happened to push the Obamacare enrollment figures over the president's 7 million goal, while fudging the attrition of more than 1 million enrolled in Obamacare medical insurance plans.
A "mistake was made," HHS 'fessed up after GOP investigators discovered the Common Core math antics. Lying liars. Caught red-handed.
So, how about: "If you like your doctor, you can keep your doctor?" Well, not if he or she isn't practicing anymore. After scoffing at conservative warnings for years that socialized medicine-light would create doctor shortages, Obamacare cheerleaders can no longer whitewash the grim reality. The Physicians Foundation found that 81 percent of doctors believe they are "either overextended or at full capacity." Another 44 percent said they "planned to cut back on the number of patients they see, retire, work part-time or close their practice to new patients."
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Posted by JR at 1:52 AM