Alan Peel's blog

Response to President Obama's State of the Union Address

Introductory Note: In 2008, then-Senator Barack Obama gave a response to the State of the Union Address of then-President George W. Bush prior to President Bush’s address to the joint session of Congress. I believe that turnabout is only fair play so I will give my response to President Obama’s 2011 State of the Union Address before he delivers it.

Good evening. My name is Alan Peel and I am a private citizen and small business owner in Leawood, Kansas.

Before I begin, I would like to extend my thoughts and prayers to Rep. Gabrielle Giffords and her family as well as the other victims and the victims’ families in the recent shooting in Tucson, Arizona. We wish a speedy recovery for those who were injured and solace for those who lost loved ones in this senseless act.

We Americans are confronted with several issues and problems either with us currently or on the horizon that could imperil our country as we go deeper into the 21st Century. Applying many of the same solutions that have been implemented in the last century will not solve our debt problems, lack of spending restraint, everyday issues affecting businesses and households and challenges abroad.

We all agree that America has a debt problem. Borrowing $14 trillion without any ideas as to how to reduce our debt to countries that may or may not have our best interests at heart is not a good thing for our country. However, the way in which we get to complete debt elimination is where we the American people disagree vehemently with President Obama.

The American public has come to the conclusion that America has a spending problem and not a revenue problem. We already have some of the highest tax rates in the world even when state and local tax rates are excluded. Instead of hoping for an economic recovery to reduce our deficit or raising taxes in the middle of a fragile economic period, we should consider cutting spending significantly. I am personally looking forward to the House Republican’s unveiling of their plan to cut spending and reduce the debt by over $2 trillion by the end of the decade. I also invite President Obama to outline a budget that will significantly reduce the deficit and lead us to a balanced budget within the next three years.

One quick way for the president to reduce the debt in the future would be to support the repeal and replacement of ObamaCare. When proposed, there were only six years of benefits, ten years of new taxes, kickbacks and pork-barrel spending and several accounting gimmicks that would make Bernie Madoff blush.  This was used by President Obama to sell his own party on passage of his disastrous health care plan and ultimately led to the a midterm election last November that even he called a "shellacking". Even as millions of jobs hang in the balance thanks to ObamaCare’s existence, we look forward to having ideas presented to the president as to how we can expand coverage for all Americans and to reduce health care costs without onerous levels of government regulations and bureaucratic interference.

Another understanding that has been reached by the American public is the idea that government spending as a means to create jobs and create prosperity is nothing more than an overhyped myth that leaves government deeper in debt and Americans jobless. Instead, we should be looking to permanently extend all of the Bush tax cuts before the end of the year and extend the payroll tax cuts for another three to five years while looking for ideas as to how we can improve the revenue streams for Social Security while looking for ways to reduce the tax burden for everyday Americans and by not cutting benefits for those who have paid into the system.

The American people are wide awake and realize that the plans of bailouts and stimulus do not work.  In fact, the recent actions taken by the Federal Reserve to inject more printed money into circulation will actually lead us to further chaos with massive inflation coming this year that risks ending any hopes of a strong economic rebound and puts us on the road to a lost decade similar to that of Japan's lost decade of the 1990's where stimulus and central planning hurt that nation's economy.

Furthermore, Washington needs to learn lessons from what families are doing during hard times. Most families have been getting their family budgets under control and have made great sacrifices to ensure their own financial security. In learning from everyday Americans, fiscal restraint is our only option at this time and we should solve our nation’s fiscal nightmare of trillion-dollar deficits by drastically reducing spending and getting government within its means.

The surest way to create jobs is to empower entrepreneurs. Keeping tax rates low and eliminating onerous regulations are essential for job growth and job creation. Millions of jobs can be created by unleashing the entrepreneurial spirit of our country. We have the most resourceful, talented, and knowledgeable workforce in the world. The only way that we can take advantage of our workforce is to motivate and empower them to produce for themselves so that they can take the necessary risks of hiring employees and improving America’s jobs picture.

Also, the American people are disheartened that we are getting more of the same from President Obama on energy policy. The drilling moratorium because of last year’s disaster in the Gulf of Mexico has begun the rise in fuel and energy prices. Sharing and depending on already scarce resources is not the way to ensure low energy prices. Instead, we need an all-at-once approach to cultivate and develop new resources and to allow the free markets to determine America’s energy future, not environmentalists using junk science and empty promises to manipulate us to pursue unproven energy technologies that are still a good 15 to 20 years away from being ready for the over 300 million people who require energy to for all of our everyday uses. Instead, we need to develop short-term resources such as domestic oil drilling and coal mining, develop more mid-range resources including nuclear energy, and longer-term resources that will ensure that we no longer import another drop of energy from OPEC.

Finally, America is best when she is at her strongest abroad. It hurts to see President Obama deferring to the United Nations and other countries when America’s leadership is essential and necessary.  We also believe that it is not constructive for our president to conduct constant apology tours or for the 2009 Nobel Peace Prize winner to host a state dinner for the leader of a regime that currently has the 2010 Nobel Peace Prize recipient in prison whose only crime was speaking out for freedom.

Furthermore, a country without borders is not a nation.  Posting signs telling Americans on American soil that going beyond a certain point is not a sound border protection plan.  Instead, we need to empower border patrol agents to do their jobs and to stop this act of human trafficing, drug trafficing and rampant crime on our southern border.  Instead of pursuing politically-motivated amnesty for people here in this country illegally, we should be looking to enforce the law and to work with state and local law enforcement agencies to deal with the crime-related issues of illegal immigration.  Suing states like Arizona who have lost their patience with the federal government's refusal to enforce the law is not constructive and should be abandoned immediately.

Make no mistake: we care about the people in other countries and we especially love to have visitors and people who want to become Americans.  We just ask that we enforce the laws and regulations and expect everyone who comes to our country to become a part of America the right way.  Permitting those to come across our borders in violation of our laws is not the way it should be done.  Instead, we need to change our system so that more legal immigrants can enter our country and not be turned away.  Those who can provide skills to our already outstanding job force or those who want to pursue better educational opportunities for themselves and their children are always welcomed and our policies should be a reflection of that and not that of quotas or limits as to who can and cannot come to America.

We also have questions about whether or not America will win in Afghanistan before we draw down from our current troop levels. If we are to fight this war the right way, we should either be fighting to win in Afghanistan or we should immediately withdraw all our troops from Afghanistan. Instead of fighting to appease special interest anti-war groups, we should be fighting to ensure that our troops come home victorious and to do soon. We also don’t want to see future generations of Americans dying in our streets in acts of terrorism or have to fight wars in the future because we didn’t fight to win the ones we are currently fighting.

With these approaches and an embracing of American exceptionalism, America will be an even greater and stronger nation in the future. Thank you for your time. Good night and may God continue to bless this great nation of ours that we all love.

The Real Cost of ObamaCare

The latest Congressional Budget Office (CBO) report recently reported their findings on the cost of the Senator Ted Kennedy’s health care bill that would cover 16 million of the 46-47 million uninsured.  Before going into the nitty-gritty of the report, the uninsured count includes illegal immigrants, those who are eligible for federal programs but have not signed up, and those who have the ability to pay for insurance but choose not to do so.

Back to the costs: The CBO has estimated that $1.3 trillion would be required over 10 years to cover just 16 million of the uninsured. This does not include the public option, the deal that President Barack Obama wants. The reality is that the public option would ultimately lead to a government-run, single-payer health care plan for America.

Based on these numbers, the cost to cover one of the uninsured is $8,125 per person per year. If the estimated population of the United States was put at 307 million, the end cost per year of ObamaCare would be just over $2.49 trillion per year.

Considering that there are over $77 trillion coming in liabilities in Medicare, Medicaid, Social Security, interest on the debt, and the debt itself, adding this will ultimately break the bank and kill any hope of economic freedom for Americans who will be enslaved by the government to cover the debt either by confiscation taxes on all Americans or by massive hyperinflation.

Congratulations, America. You’ve been had (for electing these weasels in Washington) and now you, your children, and your children's children are going to pay the consequences.

Looking Ahead on Unemployment

In taking in to account the recent statistics on unemployment dating back to the lowest rates of the Bush administration (4.4% in October 2006) and the data since that point, I have come to the conclusion that we will experience depression level unemployment (10% or more) in October 2009. A depression will likely be eminent and will become official (10% or more over two consecutive economic quarters) in March 2010.

By February 2010, one in eight Americans in the workforce will be unemployed and will be attempting to pursue employment, meeting the definition of “unemployment” according to the Bureau of Labor Statistics. By the end of 2010, the rate will reach 18.1%.

Based on data from the Bureau of Labor Statistics and projections using a polynomial trend-line, these calculations were determined with over 98% certainty that the current recession will become a depression once the summer is over with October 2009 unemployment hitting 10.7%. A depression will become official with an unemployment rate of 13% in March 2010.

By comparison, the unemployment rate from May 1979 to August 1983 increased from 5.6% to 9.5% (an increase of 69.6%). Over the ensuing 52 months (September 1983 to December 1987), unemployment dropped from 9.2% to 5.7%, a drop of 38%.

All of these calculations do not take in to account any economic impacts. The only details taken in to account are the monthly unemployment numbers from the Bureau of Labor Statistics.

How the Obama Stimulus Plan is the Best Thing to Ever Happen to the GOP

Rasmussen Reports, one of the two most accurate polling firms in predicting the outcome of the 2008 Presidential Race, has come out with a series of new polling numbers the last couple of days that should come as welcome news for the Republican Party. It all has to do with one thing: the opposition to Barack Obama’s so-called “stimulus” package that has been described as a “piñata” and a “rotting corpse”.

In other words, the American people, who were once for the Obama stimulus plan, are now suddenly against it. For the first time, the support for the Obama plan has fallen below the number of those who oppose it (37% support it versus 43% opposing it). Why? There are 50% of Americans who believe that the plan will make the economy worse.

The end result is that this is becoming a huge shot in the arm for the Republicans who are in opposition to the Obama stimulus plan. For the first time since early December of last year, the Generic Congressional Ballot shows the Republicans within four points of the Democrats (42% to 38%) and more than half of all Americans (54%) think Congress is doing a “poor” job while only 12% think Congress is doing an “excellent” or “good” job (that’s beginning to rival Rod Blagojevich territory when Blago had a 7% approval rating back in December). 

If the Democrats, led by House Speaker Nancy “Margaret Hamilton” Pelosi want to become a minority party again by 2010 and 2012, all they need to do is to keep doing what they are currently doing. 

In the House vote, every Republican and 11 Democrats voted against the plan, but it was not enough to stop the plan from passing the House. In the Senate, Senator Bill Nelson (D-FL) has tried to reassemble the “Gang of 14” to get any stimulus plan passed. It’s more a sign of desperation instead of bipartisanship. 

Before our eyes, the plan’s details, namely the pork-barrel projects, are being decried. There was money for contraception which has now been removed. There is money for a discus golf course in Austin, Texas. There is money for Shreveport, Louisiana to purchase eight Harley-Davidson motorcycles for the police department. There is money for a dog park in Chula Vista, California. And, of all places, Las Vegas is asking for $2 million for more neon signs. 

As the days go by, the American people are waking up to what is really going on in Washington and it flies in the face of the “change” that President Obama’s campaign was all about. Instead, Obama should have just cut out the Barbara Streisand (B.S.) and just campaigned on “Politics as usual”. 

Obama Stimulus Package Doomed to Fail, I Guaran-DAMN-tee It.

More and more of the details about the proposed $825 billion stimulus from President Barack Obama and the Democrat Congressional majorities are surfacing and it appears more and more that the proposition’s goals are not to stimulate the economy, but rather to reshape it in to socialism on steroids. By the spending proposed in the bill, the United States is going to start looking more and more like Sweden and France and less like the United States that we knew just two or three years ago.

First, let’s start with the tax cuts proposed in the bill. Business is struggling to borrow money from banks, like other private citizens are, and the value of their stock is in decline. All of this is thanks to economic conditions that have made business go from expanding and hiring more employees to consolidations and layoffs. Just today, 75,000 job cuts were expected from Caterpillar, Sprint, and Home Depot just to name a few.

For all of these pains where the highest taxes on sole proprietors, partnerships, and Chapter S corporations are going to remain at 35 percent. As for Chapter C corporations, they will still pay a 31 percent rate and their dividends will still be taxed again at the same income tax rate as paid by the shareholder. In other words, someone who has pre-tax earnings per share of $2.00 would end up seeing only anywhere from less than $0.90 to $1.17 (using the lowest tax rate of ten percent) per share that could be taken home after corporate and income taxes! That is an end tax rate for a shareholder ranging from 41.5 percent to over 55 percent! No wonder some people are hesitant to buy stock.

Instead, tax cuts are going to be given via Social Security payroll deductions at $1,000 for families and $500 for individuals. Let’s go back to last year when Americans received tax rebate checks for $600 (individuals) and $1,200 (families). Economists have concluded that less than 25 percent of the money from the tax rebate checks of 2008 was spent on goods and services (mostly Chinese made) while the remainder was used to pay down debt. We all know how well that worked out with the current recession.

Where tax cuts work is what Ronald Reagan, Bill Clinton, and George W. Bush did. Reagan dropped the lower rate from 70 percent when he took office to 28 when he left and the economy grew dramatically. Bill Clinton cut the capital gains rate from 28 percent to 20 percent which led to the late-1990’s stock market boom. George W. Bush cut taxes on income, capital gains, and in other places and it led to an economic boom from 2003 to 2006. In every instance, tax revenues and America’s standard of living grew because of the increased economic activity by reducing the barriers of taxes.

What makes matters worse on the tax relief front is that the tax code changes won’t take hold until next year. If we are in such an urgent crisis, let’s do something from a tax standpoint that works and reduce rates going forward and make the tax cuts from the George W. Bush years permanent. However, as you read later, that will not be the motivation.

Next comes the infrastructure spending programs that sound good, but more will lead you to believe that this is not the right way to go forward. We have a nostalgic view about Franklin D. Roosevelt not because of the manner in which he ran the economy, but how he managed the war, mostly thanks to the great generalship of Dwight Eisenhower, Douglas MacArthur, George Patton, and others.

The New Deal that Roosevelt implemented twice government spending programs on infrastructure and blue-collar jobs. It’s “twice” because the first program failed and only government is insane enough to try a sequel (unless you voted Democrat for governor in Michigan and Illinois in 2006). As it turned out, economists at the University of California-Los Angeles (UCLA) determined that the New Deal actually delayed a full economic recovery by seven years.

The result was World War II and around-the-clock mass production for the war effort that ended the Great Depression in 1943. Think about that. The Great Depression, had the New Deal not been pursued, could have ended in 1936, on the eve of FDR’s reelection.

In total, there will be $90 billion in the $825 billion package spent on infrastructure alongside the $275 billion in tax cuts that won’t be realized until 2010. That’s a grand total of $365 billion, or just more than 44 percent of the package being spent to “stimulate” the economy.

The reality is that infrastructure spending programs don’t do the job and the tax cuts are insufficient. In total, the government is putting together a program designed to give window dressing with this package to make us feel as if President Obama and the Congressional Democrats are actually doing something. The reality is that if that something doesn’t do what we have the expectations are (reviving a stagnant economy), they’re toast.

So what happens with the remaining money? The remaining money will go to other projects that won’t be realized until long after Obama is out of office. Education spending, health care spending, and cover state shortfalls on Medicaid are nice, but the purpose of the bill is lost. The purpose is to jump-start the economy and to jump-start it now.

In the end, the American people will be more than $800 billion deeper in debt with no chance of either reviving the economy, creating jobs, or ending the current recession. Instead, the plan is to have enough debt on the books to where Obama and the Democrats can actually terminate all, if not most, of the Bush tax cuts.

In a previous post, I had mentioned that the four stages of the Great Depression were a credit crunch, a stock market crash, price destabilization, and tax increases. As it will turn out, the economic plan of Obama’s will generate more inflation either by increasing debt or the need to print more money (both of which are inflationary) and repealing the Bush tax cuts to result in the largest tax increase in American history.

I am not alone on a looming depression. There are a number of other economists, including Harry Dent, who accurately predicted the 1990’s economic boom. I guarantee that the Obama program will fail. I wish it weren’t true for the sake of this country because we need help. However, this isn’t the help we need but rather a shell game disguised as a push towards socialism that has been proven to fail in every instance it has been tried.

Obama Stimulus Will Fall Flat; GOP Must Stand Up and Fight

President-elect Barack Obama has laid out a plan to “create or save” three million jobs during his first two years in office. His plan is to increase government spending, deficit be damned, by at least $775 billion dollars over that same period. While the projects he plans to invest in are things that we Americans can all use, the stimulus plan will be a flop. Here’s how I got here:

Let’s start with the money. Obama plans to increase government spending without any increases in taxes, so that negates his use of PAYGO budgeting. At the same time, the total amount of money per job that he creates or saves will come out to more than $258,333 per job. There are business executives who don’t even make this money for their job, yet Obama, who has never held a private sector job in his lifetime figures the cost of a job to “create or save” at more than one quarter of a million dollars.

Any reasonable businessperson, like myself, will tell you that if it cost that much money to save a job, we would rather sooner terminate the job immediately. The problem here is that Obama and the other people in government have no real concept of what it costs to run a business, generally speaking. The purpose of a business is not to make customers happy or to employ as many people as possible. The end goal of a business is maximizing their profits and making their shareholders money. Those who do not live by that mantra of making money for the company and stockholders quickly go out of business.

The two things that the average person on the street does not realize are how much one billion is and how much one trillion is.  For the concept of one billion dollars, imagine that on the day of the birth of Jesus Christ you were given one billion dollars and had to spend $1,000 each day onward while gaining no interest, you would be still be spending money for at least the next 700 years.  By comparison, one trillion dollars is one thousand times one billion.

Second, according to the CIA Factbook, the current Gross Domestic Product (GDP, or the total value of all goods and services produced inside the borders of the United States) currently sits at $14.334 trillion. In other words the stimulus is only 5.4 percent of GDP. From here, that percentage goes down fast.

In the Highway Spending Bill that Congress recently passed, less than 26 percent of that money was spent within the first fiscal year. If this holds true, it then means that a value of less than one-and-a-half percent of the nation’s GDP will be infused in to the economy within the first fiscal year of the stimulus bill’s existence. For an economy that will be going in to a deep recession throughout 2009, this does not bode well for Obama.

The end result is an increase in inflation thanks to the increase of the deficit to a level that will approach or exceed two trillion dollars this fiscal year and a slow-to-respond stimulus bill that will actually, when implemented, cause the death of many jobs.

However, that is only half the story about Obama’s economic plans for America. House Speaker Nancy Pelosi wants to get Obama to sign the Employee Free Choice Act (EFCA) which is Orwellian by name, but will cause considerable damage when implemented and enforced. Barring a miraculous filibuster by the Republicans in the Senate, America’s workforce will become unionized and small businesses will close their doors.

What’s more is that the unions will get the ultimate payback from the Democrats they helped get elected. Their membership and union dues received will increase which will give the unions considerable influence in American politics and with their membership. Also, the union bosses will be able to oversee how each of its members votes in a union election, bringing to an end the secret ballot. If the Senate Republicans cannot stop this bill, small businesses in the United States will either have to shell out more of their money to meet the demands of the unions or they will close their doors, or both.

If this comes in to play, the projections for an unemployment rate of nine percent will look good to Americans because the unemployment rate in the USA will be higher than at any time since Ronald Reagan’s first term following the horrific economic policies of Jimmy Carter. The only difference is that Reagan was able to lower the unemployment rate from its peak in December 1982 of 10.8 percent to 8.3 percent in December 1983 and ultimately to 7.2 percent the very month he won a 49-state landslide win against Walter Mondale. By contrast, Obama won his election with an inflation rate of 1.07 percent and an unemployment rate of 6.7 percent in November 2008.

Finally, research from economists at UCLA determined that the Great Depression lasted seven years longer because of the New Deal. Obama wants to implement the New New Deal almost from the moment he takes office. Considering that the double-digit unemployment rates did not end until 1943, this means that had the New Deal not been implemented by President Franklin Roosevelt, the Great Depression would have ended in 1936 leading to an easy reelection.

The reality is that Obama doesn’t have the luxuries that FDR had when he was President, yet he wants to take us back to the past with an economic policy that exacerbated and extended this long economic slump. If this plan flops (and it will), just like FDR, Obama will come back with a sequel of New New Deal II which will be used as a means to “save” his job during a time of economic distress.

If the Republicans are able to do anything, it will be to vote against the stimulus package and to attempt to block the EFCA. Should this happen, they will have the ability to say that these things are prolonging the economic crisis and that they fought it all the way. If not, they will be on the same side of the line as Obama and the Democrats in 2010 and again in 2012 which could pave the way for two terms of economic agony.

It’s almost crunch time and the Republicans need to fight the expansion of big government early and often, then turn around and use it as a means to defeat Obama and Obamaism when given the opportunities to do so in 2010 and 2012. If not, they will become a permanent minority party with previous successful Presidents like Abraham Lincoln, Teddy Roosevelt, Dwight Eisenhower, and Ronald Reagan as distant memories of what was once great about America, but never will be again.

It’s time for the GOP to be ready to fight Barack Obama when he’s wrong (like on these matters) and Obamaism. 

Carmakers need Delta Model, Not UAW Bailout

The hard reality is that the Big Three automakers could be facing bankruptcy if they don’t get a combined $14 billion in “loans” in order to stay in business and support their business model. However, the reality is that this is really a bailout of the United Autoworkers who need this bailout to keep their wages and benefits even as General Motors, Ford, and Chrysler go down the tubes.

Everyone has been talking about how we need manufacturing jobs and not bankruptcy of the Big Three. However, I will give you the reason why Ford, General Motors, and Chrysler need to pursue a Chapter 11 bankruptcy filing. I give you Delta Airlines.

As early as 2004 and in to 2005, Delta pursued cost-cutting measures that ended up cutting service, but did nothing for both executive pay and the pay received by union employees working for Delta. Everything came to a head with the company’s Chapter 11 filing on September 14, 2005 citing fuel prices and high labor costs.

While the company was in bankruptcy, unionized airline pilots took a cut in pay of 14 percent, executive officers took one of 15 percent, and CEO Gerald Grinstein took one of 25 percent. Also, the company laid off somewhere between 7,000 to 9,000 of the 52,000 employees.

On April 25, 2007, Delta had their bankruptcy strategy approved and emerged from bankruptcy five days later. This proves that a Chapter 11 filing will not kill a company, but restructure it so that it can function free of constraints from management and the unions and make a profit in order to stay viable.

According to the Heritage Foundation, GM, Ford, and Chrysler are paying $73.26, $70.51, and $75.86 in per-hour wages and benefits respectively. By comparison, the foreign carmakers like Toyota, BMW, Nissan, Honda, and Mercedes are profitable thanks to their locations in right-to-work states like Alabama, Georgia, Tennessee, and South Carolina at a fraction of what the Big Three pay in wages and benefits. This does not include the new Kia plant that will employ 2,500 new autoworkers in West Point, Georgia at just $17 per hour in wages. On a side note, the average American makes only $25.36 per hour in the same category.

Business executives and owners (past and present) are irritated by the difference in the earnings between the two biggest car-selling companies in the world, GM and Toyota. Last year, both companies sold 9.37 million cars each. The difference became the labor costs with GM posting a loss of $38.7 billion (a loss of $4,130.20 per car sold) versus Toyota making a profit of $17.7 billion ($1,889.01 in profit per car sold). The Big Three are fighting a losing battle thanks to the UAW who wins if the bailout passes.

What would be simple to avoid any bankruptcy would be for both sides to agree to necessary pay cuts. The UAW isn’t willing to do it because they will lose all leverage in negotiating. Where are the CEO’s telling these union thug bosses that they can either have their jobs at a lower wage or have no jobs at no wages?

All of this has led to Americans losing sympathy for the unions, who have been noticeably absent in the media’s coverage of the ongoing behind-the-scenes work on the bailout. As it would turn out, there are reasons why the American people no longer want to support the unions.

First, more Americans work in white-collar jobs that pay higher wages and provide more benefits because of the skill and education required to obtain and keep those times of jobs. When Americans were making more money during the 1980’s during the Reagan years and the new types of business leaders that were making changes for the better while maintaining and increasing profitability, the sympathy for unionization went out the window and down the drain.

Second, there are the list of high-profile unions that have gone on strike and why they did. Consider that in my lifetime, the biggest strikes were in Major League Baseball, the National Football League, the National Basketball Association, the National Hockey League, and the Screenwriters Guild. All of them wanted just one thing: more money.

When you have even the bluest of blue-collar workers being told to support millionaires on strike, even they begin starting to think the unions have outlived their usefulness. No longer are they fighting overbearing bosses, dangerous working conditions, or oppressive hours. The unions are fighting for the almighty dollar and for political influence and clout.

It’s time to tell the automakers to drop dead to force bankruptcy so that we can restructure the costs of the manufacturing sector so as to compete with the global economy. As long as we are bailing out failed companies in pro-union states thanks to the unions at the expense of taxpayers in successful right-to-work states, America will never be able to compete with the rest of the world.

Obama's Boundaries for Year One

Going in to the first year of his Presidency is something that any President needs to handle delicately. Jimmy Carter failed to do it, Ronald Reagan and George W. Bush did it almost flawlessly, and Bill Clinton went with the flow of Congress and it cost Congress. For all the things that the United States is facing in economic policy, foreign policy, and cultural divisions, President-elect Barack Obama needs to act as if he is walking on eggshells. If not, the first year could take away his aura of almost messianic appeal. 

In looking at a number of things that the Democrat-led Congress and Obama are eyeing as policy they would like to implement, there are eight things that Obama cannot sign in to law or else he could make the Republican takeover of Congress in 1994 look like a blip on the radar screen by 2012, if not 2010. Here are the nine policy changes Obama and the Democrats cannot pursue if they hope to expand their majorities or hold on to them over the next two to four years:
 
#1: Any Tax Increase
 
Everyone knows that the economy is in a slowdown. Despite Obama’s calls for “trickle-up” economic policy, reducing taxes on the highest of income groups always appears to lead to greater economic expansion. John F. Kennedy took the top from 90 percent to 70 percent and Ronald Reagan took the top rate from 70 to 20. The end result both times was an economic expansion and greater tax revenues. However, Obama might tempt his fate by going against this approach.
 
The three areas where Obama would want to raise taxes would be on the so-called “rich” by raising income tax rates to the Clinton-era top brackets of 36 and 39.6 percent, eliminating the cap on FICA taxes, and to raise the capital gains tax rate. Any of these three would turn this current recession in to a full-blown depression. As I mentioned in an earlier post, tax increases were the last of the four things that pushed the economy of the 1930’s in to the Great Depression.
 
One of the reasons that the stock market has shed anywhere from 11.7 percent to 14.8 percent of its value in the eight trading days since the Presidential election came to a close (depending on which market you’re evaluating) is that Obama has not addressed his plans on taxes for the foreseeable future. Even the Wall Street Journal has called on Obama to hold a press conference, give a speech, or issue a press release that says he will not increase taxes for the “foreseeable future”. If this does not happen, the stock market will continue to shed its value while waiting with baited breath as to what Obama intends to do as President.
 
If a tax increase comes, it would not be felt until at least the next year. However, the effects of the tax increase would be long lasting in that it would take a potential economic recovery in 2010 in to a second recession that would likely come before the Congressional midterm elections. If the economy is still an issue, 2010 could go for the Democrats the same way it went for Republicans in the middle of economic woes in 1970 and 1982 and Democrats in 1978.
 
#2: Trillion-Dollar Deficit Budget
 
If anyone has been paying close attention, there have been calls for President-elect Obama to increase deficit spending once he takes office. It appears all but certain that unless strict budget discipline is imposed by Congress and Obama, the deficit could hit $1 trillion by the end of the year. All of a sudden, a party that had promised to restore fiscal responsibility and budget discipline by way of PAYGO budgeting would be well on their way to losing all credibility on the matter.
 
It was one thing for Obama to slam President Bush on doubling the size of the deficit during the Presidential Debates against John McCain, but it would be another to not practice what he preaches. By the time of the midterms in 2010, there is no more George W. Bush to blame for unbalanced budgets. Either the deficit is reducing in size as Obama said he would like to do or it is increasing in size as Congressional Democrats would be willing to let happen.
 
When it comes to a budget battle, the home-field advantage belongs to Congress because of the ability it has to draft its own budget and to get members to vote for it based on a number of pork-barrel projects and other giveaways. It also makes it harder for the President if he decides to wage a budget battle with Congress as it will trickle in to other areas on matters of public policy.
 
About the only way out for Obama would be to severely cut military spending. Doing so in a time of two-theater military engagements would cause a great deal of harm to the military. Even the blue-dog Democrats will attempt to stop him (until they get pork or tax cuts they desire). In the end, reducing military spending by increasing runaway earmarks could actually accelerate the size of the deficit at an even faster pace.
 
Chances are that if spending is increased and tax revenues start to run dry thanks to a faltering economy, Obama will have no choice but to become the first President to sign a trillion-dollar budget in to law. If it happens, there will be wrath from the voting public who had expected better from the Democrats on budget matters.
 
#3: The Employee Free Choice Act
 
Speaking of bolstering the unions, the biggest thing that Obama and the Congressional Democrats can do to help their base is to pass the Employee Free Choice Act. What this bill intends to do is to boost union membership by automatically creating a union shop thanks to more than 50 percent of a company’s employees signing a union card.
 
By doing this, it forces an already harmonious relationship between owners and workers in to a more tension-fuelled environment by forcing upon big and small business alike in to pro-union collective bargaining agreements with the government as an arbiter. The problem with this is that workers will get more benefits and wages and job protection while hurting any company’s bottom line with pro-union bureaucrats fighting business at the same time.
 
Also, this would end secret-ballot elections in union elections. Instead, all union elections could be open-ballot votes with union bosses seeing how particular members of their membership voted. In effect, it would turn a union election in to the equivalent of a Saddam Hussein-era Iraqi election with members ostracized and ridiculed for not voting the union line. In a sense, it makes “employee free choice” sound Orwellian.
 
President Bush was smart to veto this bill in 2006, but it will take the filibuster efforts of 41-plus Republicans (which could be in doubt) to stop this bill dead in its tracks. If Obama is all about jobs, he will reject this bill because it will actually kill jobs instead of creating them.
 
Already, there are economists predicting an unemployment rate of as much as 7.3 percent by May 2009 and 9 percent by the end of 2010. If this bill becomes law, we will be talking depression-level unemployment by the time the midterms arrive.
 
#4: Bailouts of American Automakers
 
Rasmussen Reports released the results of a poll showing that 73 percent of Americans fear the United States Government running out of money. If the automaker bailout goes in to effect, Obama will increase that number further thanks to the bailout itself and the number of failing companies in the business community also calling for a bailout.
 
The airlines, cities, and states are all getting ready to get in to line to see how much money the government will give them in the form of a bailout. If this goes through, then Congress will be hard pressed to find a way out of telling all of them “no” directly to their faces.
 
If nothing else, the bailout isn’t for General Motors, Ford, or Chrysler, but it’s for the establishment of the United Auto Workers union to an effort to keep their negotiating leverage. If a Chapter 11 bankruptcy (which is needed) were to ever come about for any of the big three, then it would zap the UAW’s power away thanks to a conservator who would dramatically scale back their pay and benefits.
 
Chances are good (and I’ll be the first to make this prediction) that if the automakers are bailed out now, they will be back for more cash before the Presidential election in 2012 because of the unions and their bad business models. If bankruptcy happens, it could actually save an entire sector of the economy from an even bigger calamity.
 
#5: Repealing Abortion Restrictions with the Freedom of Choice Act
 
To the best of my (or anyone else’s) knowledge, there is not a single state that has successfully restricted abortion by way of a constitutional amendment. If the Freedom of Choice Act ever becomes law, it would result in abortion on demand sans restrictions and even allow for the federal government to directly pay for as many abortions as possible.
 
One of the ways in which Obama and the Democrats succeeded in winning elections was by neutralizing the values-based voters of the conservative persuasion. This was done by their rhetoric of sounding like Reagan on issues such as abortion, faith, and gay marriage (more on this later) and sounding genuine about it. Even President-elect Obama did this in his run for President.
 
What also helped was the complicity of the mainstream media in not probing Obama or other Democrats on social issues. If this one flies under the radar (the media hopes), this will all be forgotten by the midterms and 2012. Instead, there are a number of voting groups that would know better.
 
For one, the Catholic voters went for Obama by the margin of 53 percent to 45 percent while Protestants only went for McCain by a 53 to 45 percent margin. What could be important is the Catholic vote, which made up 26 percent of the electorate versus the Protestant vote (55 percent). For years, Catholics were a reliable part of the Democrat Party base until Roe v. Wade when the Democrats took up the feminazi’s struggle on abortion and kicked Catholics to the curb on the matter. Despite this, Catholic voters went for Obama this year.
 
However, what Obama could not afford to do would be to legislate against abortion bans and encourage more abortion. Catholic clergy (priests and nuns) would not stand for it and would relay their message from their lecterns. If the Catholic vote were to go 75 percent to a Republican, that would be more than 25 million votes, or a projected increase of 10 million votes for the GOP. This switch alone would be enough to defeat Obama in his reelection bid unless he could get some 1.5 million votes elsewhere.
 
#6: Repealing the Defense of Marriage Act
 
From what has been taking place in California in regards to the passage of the gay marriage ban in that state might set the stage for this action taking place. In order to throw the far-left base of Obama’s supporters a bone, there might be a move to repeal the Defense of Marriage Act (DOMA) that was signed in to law by President Clinton in 1996. Should this happen, it could galvanize a majority of voters who oppose gay marriage.
 
Again, this goes back to the plans of Obama and the Democrats to sound like moderates or conservatives on social issues, but their rhetoric ultimately becoming lip service. Far-left politicians on social issues have a hard time being elected when they become an issue in a campaign and when they proclaim left-of-center social policy approaches.
 
In districts where conservatives outnumber liberals by substantial margins, this would not play well at all. If the issues of gay marriage and abortion become the forefront in these campaigns, it almost always favors the Republicans. It would be wise to back off this for quite some time until at least what Obama would hope to be his second term. If not, there will be major electoral losses and Obama would have to reinstate a gay marriage ban in order to save himself from being attacked along social policy lines.
 
#7: “Comprehensive” Immigration Reform
 
This was tried back in 2007 by John McCain and Ted Kennedy and we all know how it turned out. In the end, there were not enough votes to break the filibuster and bring “comprehensive” immigration reform to the floor of the United States Senate. One of its supporters who tried to break the filibuster was then-Illinois Senator Barack Obama who supported this bill.
 
The major point at which the American public and most Senators began to oppose the bill was that amnesty would be granted to all illegal immigrants currently here in the United States and to their immediate families living outside the country. It also drew opposition because of the reduction in the length of the border fence.
 
Obama, who also expressed his support to give driver’s licenses to illegal immigrants during the Democrat primaries, has said he wants to sign it in to law. If there are not enough votes to sustain the filibuster, it will likely pass and another 20 million illegal immigrants and their immediate family members will be put on a “path to citizenship”.
 
Amnesty was tried in 1986 when Ronald Reagan made it happen with his idea that it was the “right thing to do”. Sadly, we have come to the realization that amnesty is not the answer, but a band-aid for a gaping wound.
 
#8: Reinstating the Off-Shore Drilling Ban
 
Later this month, OPEC will meet to discuss further cuts in oil production in an effort to raise prices. This comes as there was the expiration of the off-shore drilling ban and George W. Bush’s executive order ending a ban on the practice. However, as any economist will tell you, when you cut supply, you increase the price.
 
The same would likely take place here as OPEC will almost certainly cut production dramatically in order to start making money the same way they were back in the summer. Iran alone has called for a cut of up to 1.5 million barrels per day. Of course, the Democrats and Obama will become useful idiots by attempting to restrict domestic oil exploration.
 
All of this will actually increase energy prices as the calls for more oil exploration become louder and louder by the day. In the end, it could prove to be fatal as Obama tries to make plays to extreme environmentalists and sacrifices the pocketbooks of average Americans to make a play to his base.
 
#9: Brining Back the Fairness Doctrine
 
There’s an old expression of “if you can’t beat them, join them”. However, in the liberal lexicon, the expression goes “if you can’t beat them, silence them.” Sadly, liberals support free speech only when it appeals to liberalism. The return of the Fairness Doctrine (aptly called the Censorship Doctrine by Sean Hannity) would only impose on AM and FM radio so-called balance as determined by government bureaucrats.
 
Former Clinton advisor Dick Morris has predicted that it will happen, but will be overturned by the Supreme Court “in two years”, but talk radio is effectively dead if this happens. Their targets are the successful conservative talk radio programs because of the failure of liberal talk radio programs. In other words, they are going to destroy success in order to prevent failure which is a long way of saying the attempt is an equal outcome.
 
This will put the United States on par with Venezuela and Russia in terms of restricting free speech on the radio. Meanwhile, television, newspapers, and the internet will not fall under this kind of regulation. In other words, one might call it the Hush Rush Act of 2009. All of this would be designed to end any voice of opposition even as Obama and the Democrats put the United States in the fast lane on the highway to hell.
 
All of these in some way could be plays to the Democrat Party or liberal bases, but they would all begin to antagonize the center, center-right, and right-wing elements of the country to where they take it out on either Obama or on Democrats in Congress. If this becomes the case, it will take either a Republican majority in both houses of Congress to bring Obama to the center following the 2010 midterms or the complete overhaul of Democrat majorities and Obama in 2012.
 
If nothing else, the GOP needs to get to work to offer opposition and alternatives or to be prepared to electorally defeat the Democrats within the next four years.

 

Foreign Policy: What Obama Must Do

One of the biggest items of “change” that President-elect Barack Obama ran on was in the department of foreign policy. It was one of the major reasons that he was able to engineer an upset of Senator Hillary Clinton in the Democrat primaries and clinch the nomination. However, when faced with the realities of a dangerous world, one that was dangerous before George W. Bush took office, “change” may seemingly have to take a back seat in order to defeat Islamofacist terrorism.

First, Obama must make the commitment to winning in Iraq. During the campaign, Obama ran on a promise to end the war in Iraq. However, his plan for a 16-month troop withdrawal may hit a snag: How history will remember him in regards to winning an important theater in the first war for America’s existence since the Revolution.

If Obama commits to winning the war before pulling all of the troops (he can still hold his pledge on not having permanent bases despite the desires of the Iraqi government), history will think of John McCain as the whistleblower, George W. Bush as the implementer, and Barack Obama as the closer and victor. It’s a political win-win-win all around the board. It would also have historians forget that Obama was willing to concede defeat in the middle of the success of the surge.

Also, the American public is hearing little about what’s going on in Iraq today. Since the start of October, there have been a total of 17 U.S. troops killed over a 40 day period for an average of just under 0.43 troops per day dead. To top this off, there has only been one month this year (June) where the body count was greater than the number of days in the month. Prior to that stretch, the only months that had a monthly body count less than the number of days in the same respective month were in February 2004 and December 2007.

The other is for Obama to fulfill his complete campaign promise to pull all the troops within 16 months, or by the end of May 2010. This could be risky for his majorities in Congress should Iraq descend in to chaos. Already, Israel is about set to elect Benjamin Netanyahu as Prime Minister of Israel thanks to the election of Obama on Tuesday. Netanyahu will likely have to take over as the leading head of state in the war on terror if Obama decides to withdraw any troops that are necessary for victory and appease rogue dictators who are supporting Islamofacist terrorists.

A withdrawal also empowers Iran and Syria who would align with the Shiite majority in Iraq and fight the Sunnis who will be backed by Jordan and Saudi Arabia. This would be problematic and a catastrophic failure of the Obama administration because Syria and Iran have been building up their military for an invasion of Israel, but would get the parting gift of Iraq. Jordan and Saudi Arabia will be unable to fight because Jordan has made peace with Israel and Saudi Arabia depends on the United States to protect them as it has since just before Desert Storm.

Pulling out of Iraq sends the mixed signal to forces fighting the United States in Afghanistan by saying “We don’t believe that this ‘surge’ worked in Iraq, but we’re going to implement it here against you anyway.” There would be an emboldening of the terrorists in Afghanistan and Pakistan if the United States doesn’t commit to winning in Iraq alongside that of a troop surge in Afghanistan to root out insurgent forces once and for all.

Second, Obama must decommit himself from meeting with rogue dictators ranging from Venezuela’s Hugo Chavez, North Korea’s Kim Jong Il (it is still up in the air as to whether or not he’s alive), Iran’s Mahmoud Ahmadinejad, Syria’s Bashar Assad, and Cuba’s Raul Castro. It cannot happen because it would set up a disaster akin to what John F. Kennedy had after he met with Nikita Khrushchev.

The meeting resulted with the Soviet construction of the Berlin Wall and the Cuban Missile Crisis. Neither of these were successfully concluded by the Kennedy White House. In the case of the Berlin Wall, it stood until 1989 when it was torn down as both Berlin and Germany were reunited. As for the Cuban Missile Crisis, Fidel Castro feared an invasion by American military forces that would oust him from power if the missiles were not taken back. Khrushchev acquiesced on the Cuban missiles.

Third, President-elect Obama must not condemn any actions taken by Israel in defense of their country. This was a problem of his that emerged when the Russians invaded Georgia this past summer. In his first response, Obama called on Georgia to “exercise restraint” in the defense of their country. This was absolutely laughable and showed his ignorance and naivety on foreign policy matters.

If Iran is accelerating towards a nuclear bomb and the Israelis have credible intelligence that indicates this, it would be wise to let Israel deal with the problem and take out Iran’s nuclear program with air strikes of their own. Should Netanyahu decide as Prime Minister (and he will win election in February) to bomb Iran, Obama would be wise to not condemn the actions of an ally against a mutual enemy. It is neither politically wise for him to do so nor would it be strategically wise in a worldwide war against Islamofacist terrorism.

Finally, Obama needs to come to the realization (and the intelligence briefings better do the trick) to make Obama realize that the enemy of Islamofacist terrorism is an even graver enemy than that what the Soviet Union could have ever been. That realization has to come about from the methods, tactics, and aspirations of Islamofacist terrorists versus that of the former Soviet Union.

The Soviet proliferation and expansion was initially as a result of their territorial gains and reconstruction of Eastern Europe from World War II. From 1945 to 1989, the Soviets had puppet Communist governments in Czechoslovakia, Poland, Rumania, Hungary, and Bulgaria as well as recapturing Estonia, Latvia, and Lithuania and absorbing them into the Soviet Union itself.

One of the greatest methods that the Soviets used was spreading military technology and money around to nations, especially Arab ones, in order to gain influence and to back them against Israel who was being backed by the United States and Western Europe. They also sought to further influence nationals from other nations by spreading Communist teachings and ideology.

Meanwhile, the Islamofacist approaches of countries like Syria and Iran as well as terrorist groups like Hamas, Islamic Jihad, Hezbollah, and al-Qaeda results in a goal of complete subjugation to strict Islamic teachings and law. Their means are the use of intimidation by killing civilians with bombs and to pursue greater and more deadlier attacks throughout countries that don’t subscribe to or support their ideology.

If Obama decides that he is going to scale back the War on Terror and attempt to use a type of détente with terrorism like that of what Nixon, Ford, and Carter did with the Soviet Union, there will be many more major losses coming over the next four years. The end result of détente with the Soviets was their invasion of Afghanistan which was responded to with the Moscow Olympics boycott, the dumbest of all foreign policy decisions made since in the last 30 years.

There can never be coexistence with terrorism and President-elect Obama must come in to office on day one with that realization. Either we stop it and destroy its capabilities or we allow them to intimidate and dictate the future of freedom and liberty with subjugation under what many in the post-modernity West would consider barbaric.

Should Obama push for a kind of coexistence with those who have a goal to kill or subjugate us to their radical and barbaric philosophies of hate, he will be even more naïve than what America’s enemies are being led to believe.

 

Chicken Little or Nostradamus

Saturday morning, I turned on “Bulls and Bears” on the Fox News Channel and I heard one of the strangest stock investments to make for the next four years. Believe it or not, this guy said that the economy was going to be so bad that the best investment he could come up with was Molson Coors Brewing Company. In other words, his message was to keep plenty of booze handy because this is going to be an economy that will drive even the most ardent teetotalers to drinking.

Now, I will admit that like a lot of others, I do see a light at the end of the economic tunnel with Barack Obama being elected. However, I also hear the sounds of a locomotive coming from that general direction. For Obama’s sake and for our country’s sake, I would prefer that the economy be in a boom. Sadly, I don’t see it happening.

Last night, I was reading on the causes of the Great Depression and there is a real possibility that we could get a miniature version of a depression. In looking at the signs and the symptoms of the Great Depression, I couldn’t help but notice how each of the signs and symptoms are going to create an even worse economic crisis. All four of them adversely affected the business community and ultimately affected the American public. Consider them the four horsemen of the economic apocalypse: Tight credit (pestilence), stock market dives (war), price destabilization (famine), and tax increases (death).

The first thing that happened was a tightening in the credit market. Back in the 1920’s, lending was such a fast and loose practice that there was speculation on the part of investors to make money off of debt. The end result was a deflation in debt caused by liquidation that ultimately tightened the credit market.

Compared to today, we are now in a state where the economy is seeing a tightening credit market. It’s harder to get loans because the banks are trying to get their balance sheets in order after the collapse of the subprime loan market.

The second thing that happened was the fall of the stock market. In 1929, the Dow Jones Industrial Average dropped 68.90 points, or a drop of 23 percent. It wouldn’t be until 1954 until the full drop was recovered. This was the kind of equity crunch that firms had difficulties with for years.

Back on May 19 of this year, the market closed for the last time over 13,000. Since then, the market has dropped from 13,028.16 to 8,943.81 for a total percentage drop of 31.4 percent. Granted it was over a period of almost six months, but it’s been enough to drive down stock prices and create tightening of equity.

The reason that these first two items, debt and the stock market, is because of the importance the two of them have in the life of a business. In order for firms to expand, they need to have cash. To generate cash, aside from sales and profits, they need to be able to acquire loans or to generate a higher stock price. As this environment is now and may be for the next four years, it will be harder for firms to generate more money.

The first is the possible increased tightening of the credit market. President-elect Obama has proposed loan forgiveness and a freeze on foreclosures. This will create an environment where a loan officer may as well take his paid vacation time because the banks won’t lend unless under threat of the government to commit financial suicide.

The second is that the Democrats want to take over 401(k) funds from individuals who have them. By the government taking over the 401(k)’s, it will create less incentive to buy stock. Instead of allowing for your retirement to be the result of successful investing yielding in high rates of return, the rate of return is a fixed four percent per year before inflation. If inflation above four percent, you actually lose the inflation-adjusted value necessary to retire more comfortably.

By comparison, if someone had opened a 401(k) fund and invested in the Dow Jones Industrials Index Fund on October 20, 1987, your value would have increased by 314.3 percent. In other words, that would be an average gain of almost 15 percent per year or 3.75 times the rate of return of the government’s 401(k) rate of return. Sadly, the government is the only entity that can make bad business decisions and still stay in business all these years later.

The third of these problems was price destabilization. Because of the deflation of debt and the stock market crash, prices wildly deflated as a result of the United States loaning gold to Germany to industrialize in order to pay France who needed the money to pay debt to the United Kingdom and the United States. This was in response to the early 1920’s hyperinflation in the Weimar Republic.

However, the current situation could be increased inflation due to higher energy prices from the proposals of Obama, a contraction of oil supply by OPEC, and the desire to implement cap-and-trade programs that have the goal of reducing global warming, but will have the effect of reducing industry.

Inflation will be further fueled by record-high deficit spending by the next Congress when it convenes in January. With the bailouts being proposed, a second stimulus package in the works, increases in government spending for programs, fighting two wars, and an economy that is providing less tax revenue, a deficit of $1 trillion will probably become a reality before the mid-term elections if not by this year.

The increases in regulations and the increases in wages that will result from the increase in the minimum wage from $7.25 to $9.50 (the inflation-adjusted figure of the original minimum wage is less than $4) that Obama and the Democrats want will result in increased job losses and reduced production. When you have fewer goods in the marketplace, the price has nowhere to go but up.

Finally, there is the last of these: increased taxes. Following the prior three things happening to the economy, Herbert Hoover and the Republican Congress in 1930 enacted the Smoot-Hawley Tariff Act that raised taxes on imported goods (tariffs) to record levels despite the pleas and protests of over 1,000 economists and a number of business executives including Henry Ford who called it “economic stupidity”.

Despite these pleas and protests, Hoover signed Smoot-Hawley in to law and the goods imported from Europe alone decreased by half of what they were before the act. Also, there was a backlash where a number of other nations increased their tariffs on American goods.

The other tax increase was in 1932 with a Democrat-led Congress and Hoover. This time, it raised the top marginal tax rate was raised from 25 percent on those making $100,000 or more to a top rate of 63 percent on those making $1,000,000 or more (by comparison, the rate on $100,000 to $149,999 was raised to 56 percent). On top of that, the corporate tax rate was increased from 12 to 13.75 percent (an increase of almost 15 percent).

The end result was a jump in the unemployment rate from 7.8 percent in 1930 to 25.1 percent in 1933. It would not be until 1943 when the unemployment rate dropped below 10 percent.

By comparison, President-elect Barack Obama is proposing an increase in the capital gains tax from 15 percent now to anywhere from 20-28 percent (which would make buying in to the stock market a less desirable proposition), closing corporate tax loopholes that will ultimately increase the tax burden on corporate America (a tax rate that is already the second highest in the world), and raising the top effective income tax rates from 33 and 35 percent now back to the Clinton-era levels of 36 and 39.6.

What makes matters worse is that high taxes at the state level have devastated the state of Michigan perhaps more so than any other economy. Along with Oregon, the state has one of the two highest unemployment rates of any state in the country because of high tax burdens.

I bring up Michigan because of the incompetence of Governor Jennifer “Jenny No Jobs” Granholm who was right behind Obama during his Friday press conference. Granholm has done more to drive jobs away from her home state as governor. It was because of a bad Republican year in 2006 that she was able to get reelected, but her political career will officially end when she leaves office because of how damaged she has left Michigan with tax increase after tax increase.

As it stands now, the unemployment rate under “Jenny No Jobs” rose to 8.7 percent in September, more than two full percentage points higher than the unemployment rate above the national unemployment rate for October. Overall, the Granholm administration in Michigan has cost the state 143,000 jobs since she took the helm in 2003 (an average of more than 21,000 jobs a year).

What’s scary is that Obama is embracing Granholm’s high tax, no jobs approach to economics. This is why Obama’s economic policies will fail Americans. It will not provide jobs, sustainable growth, or stable prices. Instead, it will provide unemployment, higher taxes, more regulations, and more big government.

I may be Chicken Little or Nostradamus depending on the outcome. For the time being, I will be monitoring not whether or not those who voted for Obama will have buyer’s remorse, but when.

 

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