Weak Economic Numbers Are Getting Weaker

Earlier this week, GDP for third quarter was announced by the Commerce Department as 1.5 percent, versus 3.9 percent in the second quarter.  Not much doubt about the trend here.

Today's personal income growth for the month of September checked in at barely positive.

For the average America, this data says more sluggish income, no chance of rising living standards, and continued demagoguery from the very folks that have created this nightmare -- the folks in the White House.

Until free markets are permitted to breathe again, there is no likelihood of improvement for the average American.  The only winners of the Obama-Clinton economic gameplan are those on top of the stagecoach, riding around in their limousines and jet planes, piously decrying inequality.  They should know. 

More Rubbish From Academia

One Stanford "scientist" and his two Berkeley colleagues have penned a study recently asserting that average income in Mexico will plunge 73 % due to "global warming."  US per capita income will fall 36 percent by 2100, according to "research" published by this trio.  This insightful nonsense will emerge into daylight in the November 30th issue of Nature magazine.

What is the basis for this "scientific" result?  You're right! Nothing.

What the authors have done is compare periods of high temperature with periods of low temperature and then check out the economic growth rates in the periods.  As an undergraduate essay, this absurd "research" would struggle to get a passing grade.  But, in the highly politicized climate of today's higher education "research" world, this nonsense now rates a way station on the way to fame and fortune for extreme left wing academics.

All you need, according to these folks, is a cold spell for the South Sahara to roar past Europe and the US in per capita GDP.  No need for free markets, education, natural resources.   This makes the study of economic development fairly simple.  We should focus on building efficient air conditioners -- that will quickly, according to these folks, provide all the economic growth that these poverty ridden countries will ever need.

Sadly, this kind of "research" is not unusual in the modern American elite university. It is typical.  Serious thinking is increasingly being replaced with stuff like this.

Accepting A Mediocre Economy

The Obama Administration is touting the US economic recovery as a job well done.  Data made public yesterday shows that 2014 produced 2.4 percent GDP growth.  Such low levels of growth were considered cause for alarm in the years before Barrack Obama became President.  Now, such mediocrity is extolled as acceptable, even worthy of praise.  How far expectations have fallen!

As the Wall Street Journal points out in an editorial today, it is impossible to find an economic recovery this mediocre at any time in American history.  This is a new record for economic sluggishness.

Don't expect this to change as long as the "war on the economy" continues, waged by the Obama Administration and it's army of bureaucrats.  While this won't hamper the "1 percenters" like Obama, Soros, Pelosi, Kerry and Buffett, it will damage the hopes and dreams of the middle class and the poor, who have no chance of prospering with the damaging economic policies of the Obama Administration.

But, if you listen to the President, he thinks these policies have been a success -- I wonder, who for?

The Budget Debate and Shutting Down The Government

According to the US Constitution, Congress makes the laws, including those governing the spending of money, and the President is the executive, enforcing the laws made by Congress.  So, how does a budget get enacted and implemented, according to the Constitution?

The House originates the budget, passes it and then the Senate acts.  Suppose the House and Senate have acted, then the budget goes to the White House for signature.

What happens if the White House says:  "I will veto this unless it includes massive monetary payments and bribes for me and my friends."  Then, suppose the White House proceeds to a veto.

Who is responsible for shutting down the government in this scenario?  Yep.  The White House.

So, the House and Senate should pass the budget resolution and the debt limit ceiling with whatever provisions they want.   Then, if the President chooses to shut down the government by demanding that he alone can enact legislation through veto threats, then let the President shut down the government by using his veto.

Forget the media's interpretation.  The true interpretation is that Congress is responsible for making the laws and if the President is willing to shut down the government to thwart Congressional intent, then let him.

It is way past time for the Congress to play the role that the Constitution intended and challenge the assertions of an over-reaching White House.  The President is shutting down the government whenever he vetoes a spending bill or a debt-limit bill. It is as simple as that.

Congressional leaders should stop saying: "We will not shutdown the government."  Congress is not shutting down the government by passing a budget and passing or refusing to pass a debt limit extension.  Congress is simply performing its function as provided for in the US Constitution.  Only the President can shut down the government if Congress does the job that it is supposed to do.

CNBC Embarasses Itself

In last night's Republican debate, the CNBC questioners appeared to have little or no interest in economics or finance, which is supposedly their specialty.  Instead, the questioners seemed more like tabloid reporters, looking to drum up irrelevant side points mostly to make hay for their personal political point of view.

Not surprisingly, a number of the candidates called Harwood and Quintanilla out for their absurd questions.  Harwood and Quintanilla have long been shills for Obama and have now switched their allegiance to Hillary Clinton.  Both of these Democrats have used their platform at CNBC to promote the political agenda of Obama and Clinton, often by shading the truth or deliberately misleading their viewers.

Wednesday night, Harwood and Quintanilla apparently had no interest in economic or financial matters, but focused almost exclusively on trying to bring out negative campaigning to discredit the candidates personally.  How this serves the public's interest in unclear.  Both Harwood and Quintanilla should be ashamed of themselves. They certainly have zero credibility as financial reporters, as their true interests clearly lie elsewhere.

Becky Quick was not as obvious as Harwood and Quintanilla, but she, nonetheless, did serious damage to her credibility.  We have always known that Harwood and Quintanilla make no pretense at objectivity, but Quick's performance was shocking.  It will be difficult, in the future, to see Quick as a serious financial commentator. She made no effort to ask economic or financial questions on Wednesday, but instead asked questions that seemed to be prepared by Democratic operatives.

CNBC had an opportunity to put real economic issues on the table on Wednesday night and get the candidates to respond.  They chose instead to push their personal political agendas, for all of the country to see.

The Real Divide

Bureaucrats with protected job security don't worry about economic growth.   Why should they?  From their point of view, private sector job creation is a nuisance issue.  Bureaucrats and others who live off taxpayers are far more interested in social issues and climate change.  Mundane, routine issues like getting a job are not of much interest to someone basking under the "tenure" positions in public education and higher education.

The private sector is full of folks concerned about profits and about jobs.  How crass?  The bureaucrats, protected from the vagaries of free markets, are able to mull over the big issues of the day like creating safe spaces for transgenders and climate change.  These issues are very appealing discussion topics for people who don't have to worry about how to support their family.  Protected, as they are by taxpayer-provided funds, they are free to mock ordinary citizens who fend for their life in the private sector.

This is the real American divide -- between taxpayers funding all of this and those "five-percenters" sitting loftily in government, non-profit, or education industry luxury.  They can talk all they want about the issues they like, which are mostly irrelevant to poor folks and low income folks, who need jobs and hope.  These "five-percenters" are busy finding ways to impose higher and higher barriers to the hopes of those less fortunate.

So, if your living room is dominated by discussions of climate change, it is likely that the bread winners in your house are bureaucrats or taxpayer-funded clericals who don't face a market test - ever.  If your living room is dominated by discussions of how to find next month's rent or a job, you are likely a participant in the private sector.

This is the true American divide.  That's why the media and their friends in the bureaucracy are interested in climate change.  They don't need to worry about economic growth and the standard of living of the average family, as long their personal economics is unaffected by any of that.

"Affordable Care" Costs Spiral Out of Control

The "Affordable Care Act" is turning into a bad joke.  There has been zero material reductions in the number of uninsured, the main goal of the act, while health insurance costs as well as basic health care costs are spiraling out of control.

For most American families, health care costs, if you add in the rise of deductibles, are now nearly double what they were before the ACA come into existence, little more than five years ago.  Meanwhile the quality of health care available to the insured has dramatically fallen, as bureaucrats replace doctors as the decision makers. 

There are no incentives for government bureaucrats to produce quality health care at a reasonable price -- so they don't -- why should they?  Only rich and powerful liberals like Obamacare, as the ACA is known, mainly because they don't have to experience it.   Only the poor and middle class have to fight their way through life with Obamacare -- Obama and Hillary have other ways of getting their health care.

The public has always been right on this issue.  Obamacare has never been popular in any polls with the average American, who saw through the fabrications and misrepresentation of the Obama Administration and their allies in a Democratically-controlled Congress.

But the truth is now there for all to see.  An article in today's Wall Street Journal by Evelyn Everton and Chris Hudson notes the disastrous impact on state budgets of the "free-money" medicaid expansion.  States already reeling from misrepresentations by politicians of the costs of public retirement systems are now overwhelmed by the dramatic and apparently unexpected costs of "free-money" medicaid expansion.

The staggering costs of medicaid expansion should sink the almost non-existent presidential hopes of Ohio Governor John Kasich, whose misrepresentations of the facts regarding medicaid expansion are embarrassing to his candidacy.

The idea that government could provide a health insurance scheme that could maintain health care quality and reign in costs was a ridiculous proposition in the first place, something a majority of Americans have known from the very beginning.  Only an autocratic, undemocratic elite could impose something as horrible as Obamacare on the American public, who will, in time, overturn this nightmare.

Only free market health care and free market health insurance can deliver quality health care at a reasonable cost.  Europe learned that long ago; Americans are learning it now.

Good, Not Great, Employment Number

Up 275,000 -- jobs created in October.  That's a good number.  But, hardly a great number.  62.5 % labor participation rate is a terrible number.  Americans are still leaving the work force in record numbers, having given up any hope of getting a job.

The reported unemployment rate is 5.0 percent, which is only comforting to the confused.  If Americans continue to avoid work, because the economy is so poor, an unemployment rate of zero isn't going to mean much. Corrected for folks who have quit looking, the "real" unemployment rate is closer to 10 percent - typical of recession levels.

Free markets, not government bureaucrats, are what we need.  Don't expect much from the economy until free markets gain a little visibility -- not likely any time soon.

2016 Sticker Shock - Unaffordable Care is Here

A detailed article in the Wall Street Journal today by Louise Radnofsky, Paul Overberg, and Stephanie Armour describes the disaster that awaits average Americans in 2016: double digit health insurance premium increases and huge increases in deductibles.  The idea, all along, was that average Americans with good health would pay through the nose to provide the money for poor people to gain insurance.  That's what's happening.

Here's just one example of many:

"Eric Elmquist, 37, of Franklin, Tenn., felt he was paying too much in 2014 for his Blue Cross Blue Shield plan at $878 a month for two adults and three children, with an annual deductible of $5,000. A year later, he had a plan with a premium of $1,089 and deductible of $7,000. Now, he is eyeing a premium of more than $1,416 to keep that plan."

The broad conclusion:
 
"Many people signing up for 2016 health policies under the Affordable Care Act face higher premiums, fewer doctors and skimpier coverage, which threatens the appeal of the program for the healthy customers it needs.
Insurers have raised premiums steeply for the most popular plans at the same time they have boosted out-of-pocket costs such as deductibles, copays and coinsurance in many of their offerings. The companies attribute the moves in part to the high cost of some customers they are gaining under the law, which doesn’t allow them to bar clients with existing health conditions."

The reality has arrived.  Under the guise of the "Affordable Care Act," health care in America is becoming increasing unaffordable and unavailable.  This trend is not going to be reversed and things will continue to deteriorate until America's health care system begins to resemble the worst public schools in Chicago with a similar funding status.

Not to be outdone, the NY Times today has two articles of its own detailing the disastrous results of Obamacare.  Stacy Cowley's article discusses the problems that small business faces having to choose between compliance with Obamacare and their own growth or even their own survival.  Abby Goodnough describes one of life's new stresses, the annual search to find some health insurance that meets their needs.  This, of course, is something new that has been added to life by Obamacare -- fear, panic and anxiety as average Americans desperately try to find new coverage in the Obama world, most of whom were satisfied by the coverage they already had before the brave new world of Obama began.

Here's an apt quote from Goodnough's article: "I don't have a regular doctor anymore, so I avoid going."  Ah, health insurance without health care -- the Obama dream come true.

It is hard to imagine a worse health care regime than Obamacare.  Almost anything would be better than this.  For a country that grew up with free markets delivering the best quality of health care in the world, it is remarkable that this could all be destroyed in less than a decade by overzealous, inexperienced, dogmatic politicians, who, themselves, will never be subject to this terrible law.

The Pernicious Role of Government in Higher Ed

Higher Education is less and less about education these days and more and more about social protest.  This, in the wealthiest society in the world.  Poor people in America live by a standard that the vast majority of the people of the world have no hope to ever achieve.  But, it isn't the poor that are protesting.

The protests are coming from the wealthiest strata of society.   The wealthy and privileged, apparently, are the new victims of oppression, or, at the very least, the newly self-appointed spokesmen for the oppressed.  Colleges and universities all over America have turned into hotbeds of unhappiness.  Many college students seem unable to weather the slings and arrows of events both near and far away.  They are suffering, they say, leaving little time to pursue an education.

Instead, the demand is to convert the university itself, more and more, into an institution devoted to political agitation.  Those who might question such a move are no longer considered worthy of the right of free speech.  They need to move on or be run over.

This is the natural result of deep federal government involvement in education, mostly driven by using taxpayer money to fund political activities and politically-motivated research at America's universities.  The usual response when one questions why university administrators tolerate illegal, sometimes violent, activities by 19 and 20 year olds, is that government funding might be threatened if they took any action other than surrender.

Thus, universities are more and more devoted to "centers" that separate students into various categories, categories which are multiplying every year.  Integration has given way to enforced and institutionally encouraged separation, one race from another, one gender from another, one ethnic group from another, one nationality from another -- unending and confusing multiplicities of identities, most of whom feel victimized, they say,  by the universities and colleges they attend.

How to divide the university financial pie among all of these competing victim groups?  That is the modern question facing the modern university.  Education has become an after thought, no longer relevant to the modern higher ed establishment.  It's all about identity, not about building strength or character through education.

The folks that lead these institutions now make whopping salaries (seven figure salaries are rampant at the elite schools), typically with accompanying entourages that would make the ghost of Louis the XIV blush.  Faculty parking lots are full of mercedes, bmws and the occasional ferrari.  Times have changed.

The real victim is the education process itself, no longer of much concern to folks out raising money to perpetuate these institutions.  Taxpayers, either through direct government grants or tax deductions provided to wealthy donors, provide the funding for institutions that have long since lost their moorings and are constantly casting about for a new champion or cause that might stir up students, many of whom no longer see education of much value anyway.

Ultimately, there will be no financing to support all of this, since no real product is created or even envisioned by the increasingly politicized modern education model.  Tuitions are continuing to escalate skyward and that process will not abate.  Eventually, however, the tide will turn and many, if not most of these no-longer-functional monstrosities will collapse of their own weight.

Education, as such, is, after all, pretty cheap and not in any way political.  That simple and obvious fact will spell doom for the higher education system that big government has spawned.