President Obama put his rosy glasses on for an interview with CNBC on Thursday, claiming “It’s pretty hard to find an economic measure where we’re not significantly better off.”
Obama spoke with CNBC’s Steve Liesman about the economic policies pushed by the White House and what the federal government expects going forward.
“What can you tell average Americans about the outlook of the economy?” Liesman asked, noting that even Obama’s own former economic advisor Larry Summers is forecasting lower growth over the next few years.
Obama dismissed that notion. “If you think about where we were, Steve, when I came into office and where we are now — it’s pretty hard to find an economic measure where we’re not significantly better off.”
The president pointed to the massive ballooning of the stock market and corporate profits under his administration, the decline of workers seeking unemployment benefits and a recovering auto industry. He even took credit for the nation’s natural gas boom and the moderate rollback of the federal deficit.
“There are a lot of things there that give me confidence we’re poised to take off,” he continued. “But there are some things that are holding us back.” Those things, of course, were “inactions by our federal government.”
Liesman pushed back. “Sorry Mr. President — I can confirm most of your data, but median family incomes, that’s one that is not doing better.”
Obama agreed, blaming trends like globalization, structural income inequality and inaction on minimum wage in Congress — not White House policy.
On Tuesday, Vice President Joe Biden declared that America’s jobs picture is brighter than ever.
“Businesses are hiring at historic rates, with 52 consecutive months of net private sector job growth,” said Biden in the newly released report supporting the reauthorization of the Workforce Innovation and Opportunity Act of 1998, which President Obama signed on Tuesday.
The Workforce Innovation and Opportunity Act reauthorization will use a $1.4 billion “job-driven checklist” tool to “ensure that the $17 billion in federal training funds are used more effectively,” said a senior White House official. The program will also feature a $25 million Department of Labor award to develop a web-based “skills academy” for adult learners.
Obama and Biden’s efforts to cast a positive light on America’s jobs outlook, however, may face headwinds with voters. As the New York Times noted, “In fact, part-time jobs accounted for two-thirds of all new jobs in June.” What’s more, economist Ben Casselman of Nate Silver’s FiveThirtyEight states, “For the 49th time in 50 months, more jobseekers gave up looking than found work.”
Obama and Biden’s upbeat economic outlook stands in contrast to the views of voters. According to Gallup, 56% of Americans believe the economy is getting worse, versus just 39% who say it is improving.
Obama departed from the signing of the jobs-training reauthorization for a Democratic fundraising trip in California. The price to attend the reception and take a picture with Obama is $10,000, and it cost $32,400 to be a co-host of the event.
Since January 1 of this year, 13 states have raised their minimum wage.
However, these states also have something else in common: Since January 1, they have suffered a loss in job growth.
From the American Action Forum:
While most of these states’ minimum wage raises were previously mandated automatic adjustments for inflation, four state legislatures – Connecticut, New Jersey, New York and Rhode Island – specifically voted for increases to take place this year.
American Action Forum policy Analyst Ben Gitis explained the clear repercussions of raising minimum wages:
“While many assume that it would come out of profits of large companies, in reality it only affects restaurants and retail businesses that have narrow profit margins.”
“They have no choice but to either reduce their current employment levels or put off plans to expand and make new hires. As a result, the cost of the minimum wage comes out of the pockets of unemployed workers who are denied an opportunity to work.”
Those who argue for increasing the minimum wage generally do so with good intentions – if Americans make more money, the entire nation is better off. However, they are misguided because they ignore this question: Who pays for the higher wages, and how do they afford it?
The answer to that question? Small businesses that are already hurting have to foot the bill, and they can’t afford it; they end up having to find other ways to cut costs, including hiring fewer employees.
Yes, it’d be great if Americans were paid higher wages. But as this data clearly spells out, a mandated minimum wage hike will not achieve that.
Instead, as Gitis points out, “it is time policymakers consider policies that actually improve job creation and get people back to work.” It is time, indeed.
Brett Molina, 12:52 p.m. EDT July 17, 2014
Microsoft confirmed it will cut up to 18,000 jobs over the next year, part of the tech titan’s efforts to streamline its business under new CEO Satya Nadella.
In a statement released Thursday, Microsoft says about 12,500 of the professional and factory positions will be cut as part of its $7.2 billion acquisition of Nokia’s handset business, which the company closed in April.
“My promise to you is that we will go through this process in the most thoughtful and transparent way possible,” said Nadella in a memo to employees.
Nadella, who replaced Steve Ballmer in February, says the “vast majority” of employees affected by layoffs will be notified within the next six months. They will also earn severance and job transition help in many locations. All cuts will be completed by next June.
The layoffs by Microsoft — which employs 125,000 people — are the company’s largest ever. The acquisition of Nokia’s handset business in April added 25,000 people to Microsoft’s payroll.
First Take: Nokia takes deepest cut in Microsoft layoffs
Daniel Ives, analyst with FBR Capital Markets, says the “larger than expected” layoffs hints at Nadella’s plans to simplify Microsoft’s infrastructure.
“Under the Ballmer era, there were many layers of management and a plethora of expensive initiatives being funded that has thus hurt the strategic and financial position the company is in, especially in light of digesting the Nokia acquisition,” Ives says.
“Nadella is using today as an opportunity to make sure that Microsoft is ready and well positioned to embark on its next chapter of growth around mobile and cloud,” Ives says.
Microsoft expects to incur pre-tax charges as high as $1.6 billion over the next four quarters, which will include $750 million to $800 million for severance and related benefit costs, and $350 million to $800 million of asset-related charges.
Shares of Microsoft were up 3.3% at $45.55 in pre-market trading. Overall, investors have been pleased by Nadella’s performance. Microsoft stock surged 25% since Nadella took over.
Baig: The promise and pain of Windows Phone and Nokia
Last week, Nadella sent a memo to employees reinforcing his vision for a “mobile-first, cloud-first” world, focusing on unifying its software and hardware.
“Microsoft has a unique ability to harmonize the world’s devices, apps, docs, data and social networks in digital work and life experiences so that people are at the center and are empowered to do more and achieve more with what is becoming an increasingly scarce commodity — time!” Nadella wrote.
Nadella has injected “a new sense of focus, energy and interest in what’s going on at Microsoft,” says S&P Capital IQ analyst Scott Kessler, citing Microsoft’s deal with Apple to host productivity apps suite Office on the iPad.
“He’s doing things the way he thinks they should be done,” Kessler says. “If it means they’re going to do a partnership with a former — and you could argue current — rival in Apple for the betterment of the business, then he’s going to do it.”
Gartner analyst Merv Adrian says Nadella recognizes Microsoft cannot operate with a “Windows first at all costs model” and has started shaping the company to thrive in a tech space with multiple platforms and devices. “It’s been a very consistent delivery on the promises he’s made so far,” he says.
Microsoft is the latest tech giant suffering through a round of layoffs. In May, personal computer company Hewlett-Packard announced it would cut an additional 11,000 to 16,000 jobs as part of a massive restructuring. Earlier this year, IBM said it would take a $1 billion charge for “workforce re-balancing.”
Chip maker Intel and network-equipment maker Cisco Systems both said in the past year they were cutting about 5% of their workforces.
Travis Perry / @Watchdogorg / July 13, 2014 /
OSAWATOMIE, Kan.—For Kansas, the bad news is the state flubbed more than $18.9 million in Supplemental Nutrition Assistance Payments during fiscal 2013.
The good news is this represents an improvement. The state snapped a streak of rising payment errors that stretched back to 2010.
Overall,Kansas incorrectly paid out 3.99 percent of the roughly $474 million distributed during fiscal 2013. The state overpaid on 3.24 percent ($15.4 million) and underpaid on .75 percent ($3.5 million) of all SNAP disbursements.
Even with the improvement, Kansas still lags behind the national overall average of 3.2 percent.
Read more:Florida wins $7 million for wasting $47 million in food stamp funds
Here’s the recent history for the Sunflower State:
Fiscal 2010 – 4.79 percent error rate / $18.36 million
Fiscal 2011 – 5 percent error rate / $22.1 million
Fiscal 2012 – 5.45 percent error rate / $24.8 million
Theresa Freed, communications director for the Kansas Department for Children and Families, told Kansas Watchdog last year that the state’s elevated error rate was caused, at least in part, by Kansas’ focus on paying benefits before eligibility was verified. Now, it seems, that’s no longer the case.
“We are now doing a better job of rechecking applications to ensure we have all needed information prior to authorization, to prevent errors from ever happening,” Freed said.
“Our (Economic and Employment Services) staff meets with our regional director on a monthly basis to discuss the error rate. We are also continually researching the types of cases that are more prone to errors so we can be proactive in preventing inaccurate payments.”
Kansas’ SNAP program serves 127,651 households, including 150,003 adults and 135,979 children.
Read More on Watchdog.org.
By Michael Hausam 2 days ago
The two main measures of inflation that the media and government use show 39% and 32% increases over the last 14 years, respectively. That simply means that things that cost $1.00 in 2000 now cost around $1.35.
But is that true?
No, it isn’t. Take a look at this:
If you purchase any of the items on the above list — and who doesn’t? — your costs have been higher, massively higher in some cases, than the 30-something percent figures touted by the media and the government.
In other words, you’re poorer. For example:
Fuel oil is 242% more expensive
A gallon of gasoline is 176% more expensive
A dozen eggs is over twice as expensive
Healthcare is over twice as expensive (average)
Ground beef is nearly twice as expensive
College tuition is up 68%
Electricity is up 60%
Car prices are up over 50%
Now consider that nearly every one of these items is driven up in price through government intervention.
The Fed’s intentional inflation policy has been decreasing the purchasing power of the dollar over time. Environmentalism damages oil and gas production, coal production and electricity generation. Car and emission mandates have contributed to higher automobile prices. Ethanol and other farm subsidies have been leading to higher produce prices. Student loans have encouraged liberal-run colleges to take students to the bank.
It’s funny – for being supposed advocates of the “poor,” progressives who support government meddling in the economy sure know how to make almost everybody feel poorer. The bottom line is that all the “do-gooderism” of the left… it’s on your tab.
by PAUL CRAIG ROBERTS, DAVE KRANZLER AND JOHN WILLIAMS | INTREPID REPORT | JULY 11, 2014
The third and final estimate (until the annual GDP revisions) of first quarter 2014 real GDP growth released June 25 by the US Bureau of Economic Analysis was a 2.9% contraction in GDP growth, a 5.5 percentage point difference from the January forecast of 2.6% growth. Apparently, the first quarter contraction was dismissed by those speculating in equities as weather related, as stock averages rose with the bad news.
Stock market participants might be in for a second quarter surprise. The result of many years of changes made to the official inflation measures is a substantially understated inflation rate. John Williams (www.shadowstats.com) provides inflation estimates based on previous official methodology when the Consumer Price Index still represented the cost of a constant standard of living. The 1.26% inflation measure used to deflate first quarter nominal GDP is unrealistic, as Americans who make purchases are aware.
A reasonable correction to the understated deflator gives a much higher first quarter contraction. The two main causes of inflation’s understatement are the substitution principle introduced during the Clinton regime and the hedonic adjustments ongoing since the 1980s that redefine price rises as quality improvements. Correcting for excessive hedonic adjustments gives a first quarter real GDP contraction of 5%. Correcting for hedonic and substitution adjustments gives a first quarter real GDP contraction of 8.5%.
Realistic economic analysis is a rarity. The financial press echoes Wall Street, and Wall Street economists are paid to help sell financial instruments. Gloomy analysis is frowned upon. Even negative quarters are given a positive spin.
Years of understatement of inflation has resulted in years of overstatement of GDP growth. Thinking about the many years of misstatement, we realized that the typical computation in nominal terms of the ratio of debt to GDP is seriously misleading.
Consider that debt is issued in nominal terms and repaid in nominal terms (except for a few Treasury bonds with inflation adjustments). However, nominal wealth or nominal GDP overstates real economic strength. The debt is growing, but both the nominal and real values of the output of goods and services are not keeping up with the rise in debt.
To understand how risky the rise of debt is, nominal debt must be compared to real GDP. Spin masters might dismiss this computation as comparing apples to oranges, but such a charge constitutes denial that the ratio of nominal debt to nominal GDP understates the wealth dilution caused by the government’s ability to issue and repay debt in nominal dollars. We know that inflation favors debtors, because debts can be repaid in inflated dollars.
The graph below shows three different debt to GDP ratios. The bottom line is nominal debt to nominal GDP, the financial press ratio. The middle line is the ratio of nominal debt to the official measure of real GDP. The top line is the ratio of nominal GDP to Shadowstats’ corrected measure of real GDP that puts back in some of the inflation that is no longer included in official measures. The basis for this corrected measure is also 2000, but as the GDP number for 2000 is lower due to correction, this graph begins with the ratio at a slightly higher point.
The nominal debt to GDP ratio shows that as of the end of the first quarter of 2014 total US Treasury debt outstanding is 103 percent of US GDP.
The ratio of Treasury debt to official real GDP shows debt at 136% of GDP.
The ratio of debt to real GDP deflated with more a more realistic measure of inflation, one more in keeping with the experience of consumers, puts US public debt at 185% of GDP. In other words, the burden of US debt on the real economy is almost twice the burden that is normally perceived.
The Shadowstats adjustment we made to real GDP does not fully correct for what we believe has been a growing understatement of inflation since the 1980s. The adjustment we made corrects the implicit price deflator for a two-percentage point understatement of annual inflation due to hedonic distortion. Real GDP with this correction since 2000 looks like this:
We have calculated the ratios of US public debt to nominal GDP and to two measures of real GDP. The ratios of debt to GDP would be much higher if we used total credit outstanding, or total public and private debt, and if we used the government’s unfunded liabilities. The fact seems clear that debt is a major and unappreciated issue for the US economy. The enormous debt, especially with the middle class economy largely offshored, implies substantially lower living standards for the 99 percent.
The first quarter contraction, especially our corrected number, implies a second quarter negative real GDP. In other words, the years of Quantitative Easing (money printing) by the Federal Reserve has not resulted in economic recovery from the 2008 downturn and has not prevented further contraction.
Massive money creation and huge fiscal deficits have protected the balance sheets of “banks too big to fail” but have harmed the American people. Retirees and pension funds have been deprived for years of interest income as the Federal Reserve engineered zero or negative interest rates for the sake of a handful of oversized banks.
The extraordinary creation of new dollars diluted the dollars held by peoples, companies, institutions, and central banks throughout the world, raising fears that the dollar would lose exchange value and its role as world reserve currency.
Washington’s use of financial sanctions to force other countries to bend to Washington’s will is causing countries to leave the dollar payments system. Russian President Vladimir Putin’s advisor has said that the dollar must be crashed as the only way to prevent US aggression. The Chinese have called for “de-Americanizing the world.”
The imperialistic US Foreign Account Tax Compliance Act (FATCA), which comes into full force July 1, 2015, imposes such heavy reporting costs on foreign financial institutions that these institutions might opt out of dollar transactions. All together, the result could be a serious tumble in the value of the US dollar, more wealth contraction, higher inflation via import prices, and less US wealth available to support US debt.
In view of this reality, why is Washington pushing its puppet in Kiev toward war with Russia? Why is Washington pushing NATO to spend more money and build more bases on which to deploy more troops in the Baltics and Eastern Europe, especially when Washington’s contribution will be the largest part of the cost? Why is Washington re-entering the Middle East conflict that Washington began by inciting Sunni and Shia against one another? Why is Washington constructing new naval and air bases from the Philippines to Vietnam in order to encircle China?
If Washington is this unaware of its budget constraints and its financial predicament, it cannot be long before Americans experience economic catastrophe.
John Williams, an expert on government economic statistics, has been a private consulting economist for more than thirty years (www.shadowstats.com). Dave Kranzler ( http://www.investmentresearchdynamics.com ) has years of experience in financial markets. Paul Craig Roberts is an economist and former Assistant Secretary of the US Treasury for Economic Policy.
Democrats throw black voters under the bus.
By A. J. Delgado
One of the sleeper issues surrounding the debate on amnesty for illegal immigrants – an inconvenient one that no proponent of a widespread amnesty wishes to acknowledge – is the devastating effect so-called immigration reform will have on African Americans.
The black unemployment rate is almost 11 percent, far higher than that of any other group profiled by labor statistics. African Americans are disproportionately employed in lower-skilled jobs – the very same jobs immigrants take. As Steven Camarota asked in a recent column, why double immigration when so many people already aren’t working?
Who will be harmed most by amnesty? African-Americans.
The issue resurfaced this week when a YouTube video emerged of two young African-Americans confronting pro-illegal-immigration demonstrators in Murrieta, California. Murrieta is one of the towns in which undocumented minors are being relocated — and supporters are squaring off with protestors.
The young man argues:
If somebody brought six children to your house and you ain’t got no job, are you gonna take them in?… What are you gonna do? Are you gonna try to go out there and take care of these children AND the children you got already that you can’t take care of?… What are we going to do for the people who are here who are starving already?… We got our OWN people that are starving and hungry…. Why would we add to the problem?!
He also laments the problems in black neighborhoods where prices “are upped on everything” after large groups of immigrants move in.
The young woman argues:
It’s just too much…. We already have our own poor people. Starvation, kids walking with no shoes…. We don’t need other people’s kids to bring more problems…. You’re gonna watch America go spiraling down… We’re already in debt as it is. [Now] we’re gonna need more money to support these kids.
Why are Democratic politicians disregarding the concerns and needs of black Americans in a push to address the concerns and needs… of foreigners? Amnesty proponents speak of the need to grant others a better life – but what of the need to look out for our fellow Americans? What of those black Americans whose ancestors quite literally built this nation through the sweat of their brows?
Instead, Democrats are chucking aside black voters in their rush to lock in the Latino vote (or so they’re hoping). Taken for granted as a given come election-time, blacks are now actively harmed as the Democrats vow to grow their voting base through importing more and more of what they see as future blue-voters. It’s the husband who leaves his wife of 30 years: ‘We had a good run, honey, but I’ve found someone new.’
Black attorney and member of the U.S. Commission on Civil Rights Peter Kirsanow, serves as one of the lone voices of reason, repeatedly outlining the harm amnesty will cause black Americans. In a 2013 letter to the Congressional Black Caucus, he wrote: “The obvious question is whether there are sufficient jobs in the low-skilled labor market for both African-Americans and illegal immigrants. The answer is no.” Kirsanow’s statistics demonstrate the way in which immigration impacts the wages and employment opportunities of black males and hurts the black community.
But no one seems to listen to Kirsanow.
Meanwhile, the harm to African Americans is not limited to reduced wages, greater competition for jobs, and declining household incomes – now even the black history of suffering is being diluted. Liberal columnist and CNN pundit Sally Kohn penned a column last week arguing that the term ‘illegal immigrant’ is the same as the N-word. Kohn, is usually fair-minded and reasoned in her arguments, lumping black Americans’ unique history and suffering with that of certain Latino immigrants is absurd and offensive. Consider that the N-word was used to describe a person who was whipped daily, while ‘illegal immigrant’ is a word used to describe a person who receives free education (even in-state tuition!), housing, driver’s licenses, legal aid, food, and healthcare. To even claim the two words are similar is an unthinkable affront – and insult – to African-Americans.
Senator Jeff Sessions’s recent National Review column “On Immigration, It’s Time to Defend Americans,” hits the nail on the head. Sessions notes:
Harvard professor George Borjas estimated that high immigration rates from 1980 to 2000 resulted in a 7.4 percent wage reduction for lower-skilled American workers…. The Center for Immigration Studies issued a study based on Census data showing that “since 2000 all of the net gain in the number of working-age (16 to 65) people holding a job has gone to immigrants.”… If mass immigration is so good for the economy, why then — during this long sustained period of record immigration into the U.S. — are incomes falling and a record number of Americans not working?
Birthright citizenship is already bad enough; largely refusing to deport illegal immigrants is already bad enough.But now, we’ve upped the ante even further. Overburdened taxpayers, including black taxpayers, are covering the cost to feed, clothe and educate illegals, and black Americans face the additional burden of having their historic suffering belittled and their precarious circumstances made even worse.
Democrats have built a brand as the party willing to stand up for black Americans, but the amnesty push shows what a false promise that was. The message to black voters is: “Yes, your ancestors endured unimaginable hardships and helped build this country, and we said we’d help you out. But now we have a new trophy wife.”
— A. J. Delgado is a conservative writer and lawyer. She writes about politics and culture.
July 3, 2014 By Matthew Burke
Over a quarter of the nation’s population is not working and is also not looking for work, according to new June data released on Thursday by the Bureau of Labor Statistics (BLS), an agency of the federal government.
According to the new report, over 92,120,000 of Americans age 16 and older did not participate in the labor force in June, an increase of 111,000 over April’s report.
The labor force participation rate for the month of June, according to the BLS, was just 62.8%, which matched a 36-year low.
The graph below shows major declines in the number of Americans working, contrary to the highly doctored official unemployment statistic, which has deceptively shown a declining number, indicating that unemployment is getting better.
It’s actually not, when you take into account the massive number of Americans who have not only left the labor force, but have quit looking for work since the Obama regime came into power.
No president since Jimmy Carter has had such an abysmal labor force participation rate.
While you will read about the unemployment rate declining in the mainstream media, attempting to prop up the failing controlist economic stranglehold of the Obama regime, the real picture is above.
And it’s anything but “progress.” Not even a “smidgen.”
Do you think that the economy is getting worse?