The Left’s Compassion Problem

It is fascinating to see brilliant people belatedly discover the obvious — and to see an even larger number of brilliant people never discover the obvious.

A recent story in a San Francisco newspaper says that some restaurants and grocery stores in Oakland’s Chinatown have closed after the city’s minimum wage was raised. Other small businesses there are not sure they are going to survive, since many depend on a thin profit margin and a high volume of sales.

At an angry meeting between local small business owners and city officials, the local organization that had campaigned for the higher minimum wage was absent. They were probably some place congratulating themselves on having passed a humane “living wage” law. The group most affected was also absent — inexperienced and unskilled young people, who need a job to get some experience, even more than they need the money.

It is not a breakthrough on the frontiers of knowledge that minimum wage laws reduce employment opportunities for the young and the unskilled of any age. It has been happening around the world, for generation after generation, and in the most diverse countries.

It is not just the young who are affected when minimum wage rates are set according to the fashionable notions of third parties, with little or no regard for whether everyone is productive enough to be worth paying the minimum wage they set. (thomas Sowell)

Seattle’s $15 minimum wage law goes into effect on April 1, 2015. As that date approaches, restaurants across the city are making the financial decision to close shop. The Washington Policy Center writes that “closings have occurred across the city, from Grub in the upscale Queen Anne Hill neighborhood, to Little Uncle in gritty Pioneer Square, to the Boat Street Cafe on Western Avenue near the waterfront.”

Of course, restaurants close for a variety of reasons. But, according to Seattle Magazine, the “impending minimum wage hike to $15 per hour” is playing a “major factor.” That’s not surprising, considering “about 36% of restaurant earnings go to paying labor costs.” ..,

“Washington Restaurant Association’s Anthony Anton puts it this way: “It’s not a political problem; it’s a math problem.”

In reference to that last quote, it’s certainly a math problem for the restaurant owners, but that doesn’t eliminate the fact that it’s a political problem for the social justice warriors who shoved this initiative through. Of course, the problems in question are all too real for the workers who are now “benefiting” from having their wages bumped up by more than 50% in some cases, and it involves some calculating as well. Our friend Bruce McQuain asks the question which puts this whole math issue in focus. What’s $15 times zero again?

Are there alternatives to closing? Sure. But they’re the same ones we’ve talked about for years:

Restaurant owners, expecting to operate on thinner margins, have tried to adapt in several ways including “higher menu prices, cheaper, lower-quality ingredients, reduced opening times, and cutting work hours and firing workers,” according to The Seattle Times and Seattle Eater magazine. As the Washington Policy Center points out, when these strategies are not enough, businesses close, “workers lose their jobs and the neighborhood loses a prized amenity.”

Welcome to the land of $17 dollar cheeseburgers. And, as you can figure out fairly quickly, everything else will be more expensive too … which, of course, erodes the purchasing power of that $15 wage. More importantly, if you work for one of those establishments that is closing, your wage is $15 times zero hours, isn’t it?

Bigger companies who can absorb the financial hit from implementing new technology have already been preparing for these changes. McDonald’s has been experimenting with point of sale automation for taking orders and Applebee’s rolled out smart tablets at tables in multiple locations last year. The latter solution is the most interesting to me because it seems like the easiest for younger consumers to adapt to. Most of the people going out to eat in such places are already familiar with laptops, tablets and smart phones anyway. Having one waiting at the table which takes the place of not only the menu, but the waitress as well, isn’t going to come as much of a shock to the system.

I ran into one of these setups at the Philadelphia airport this winter and they work surprisingly well. If you plan to pay by credit or debit card (which is the only option in some cases) you barely interact with a human at all. You browse the drinks and food on the touch screen, place your order, swipe your card, and a short while later somebody strolls up with your food and beverage, says hello and drops them off. It’s a terribly impersonal service as compared to a bartender or waitress who stops to chat with you, but it gets the job done.

Of course, that last phrase is the big issue here, isn’t it? It gets the job done. That job used to be done by a person. Now it’s essentially a robot. So those workers are no longer on the payroll, but hopefully they’ll catch on someplace else. Unfortunately, as Seattle is finding out, employers who run single outlets and don’t have the backing and buffer range of a major chain often won’t be able to make the shift in technological infrastructure required to cut back on staffing while staying open. Those folks will shut down, and it’s apparently already beginning in Washington state. (hot air)

Back to Mr Sowell:

Low-income minorities are often hardest hit by the unemployment that follows in the wake of minimum wage laws. The last year when the black unemployment rate was lower than the white unemployment rate was 1930, the last year before there was a federal minimum wage law.

The following year, the Davis-Bacon Act of 1931 was passed, requiring minimum wages in the construction industry. This was in response to complaints that construction companies with non-union black construction workers were able to underbid construction companies with unionized white workers (whose unions would not admit blacks).

Looking back over my own life, I realize now how lucky I was when I left home in 1948, at the age of 17, to become self-supporting. The unemployment rate for 16- and 17-year-old blacks at that time was under 10 percent. Inflation had made the minimum wage law, passed ten years earlier, irrelevant.

But it was only a matter of time before liberal compassion led to repeated increases in the minimum wage, to keep up with inflation. The annual unemployment rate for black teenagers has never been less than 20 percent in the past 50 years, and has ranged as high as over 50 percent.

You can check these numbers in a table of official government statistics on page 42 of Professor Walter Williams’ book “Race and Economics.”

Incidentally, the black-white gap in unemployment rates for 16-year-olds and 17-year-olds was virtually non-existent back in 1948. But the black teenage unemployment rate has been more than double that for white teenagers for every year since 1971.

This is just one of many policies that allow liberals to go around feeling good about themselves, while leaving havoc in their wake.

But they “feel” so good about themselves and you’re so “greedy” if you disagree.

sowell- liberal care

It Pays to be Illegal

Quick Aside: if you get a chance watch TORCHWOOD: Miracle Day, there’s a lot in there about manipulation of language for economic and political advantage. Torchwood: Children of Earth is a nice nasty allegory about how far a government could go.

Now back to the regularly scheduled rant…

Michael Ramirez Cartoon

If the federal government had actually wanted to encourage illegal immigration, wouldn’t a big tax credit be the way to bring them in? Lucky us, that’s what the IRS is doing — and with our money.

A blistering Treasury Department audit released Friday found that “individuals not authorized to work in the United States were paid $4.2 billion in refundable credits.” Those credits are meant to zero out any taxes paid by the poor, and often amount to checks as high as $1,000, courtesy of other taxpayers.

In the last five years, some 2.3 million illegal immigrants decided they, too, were “entitled” to that money, and the IRS paid them. Word got out and the payouts to illegals grew fourfold over the last five years.

The Treasury report noted that paying these credits to illegals is explicitly prohibited by U.S. law, which holds that those unauthorized to work here cannot receive federal benefits.

The IRS claims it’s not its job to check the immigration status of those requesting U.S. money (easily done if a filer has a valid Social Security number instead of a “taxpayer ID”).

Just like the Justice Department. Funny That…

The tax agency apparently thinks laws only apply to people it audits — not politically sensitive illegal aliens.

So now we have the sorry spectacle of $4.2 billion in money from law-abiding taxpayers flowing to law-breaking foreigners who belong in other countries.

No wonder the U.S. has some 12 million illegal immigrants, rolling in by the thousands daily in part from the well-established human smuggling rackets controlled by Mexico’s drug and crime cartels.

No economic phenomenon ever happens without vast sums of money involved. IRS tax credits are just such a big-money incentive, the Treasury report found.

“(T)he payment of Federal funds through this tax benefit appears to provide an additional incentive for aliens to enter, reside, and work in the United States without authorization, which contradicts Federal law and policy to remove such incentives,” the report said.

This could explain why in recent years millions of illegal immigrants are going beyond just the old trick of having anchor babies with automatic U.S. citizenship to win benefits. They’re now bringing their foreign-born kids over, too. All that “free” education, “free” medical care, “free” legal aid and now “free” tax credits add up.

And you get to pay for it! Oh, and if you object– YOU’RE A RACIST!!  🙂

As much as the open-borders lobby insists that illegal immigrants are only here to work and produce, this report shows they’re also here to drain and consume.

So much for that liberal dismissive hoary of “doing jobs Americans won’t do” if they are getting paid under the table AND getting IRS rebates to boot! They are doing BETTER than WE would at those jobs!

So not only do illegal immigrants take jobs from low-skilled Americans, and depress all wages by their willingness to work off the books at lower costs (which are princely sums for the standards of living in the countries they remit money to), they also get big tax credits from other taxpayers, too.

By handing out these freebies indiscriminately, it’s clear the federal government seems to want it that way, making illegal immigration a more attractive option than staying home and emigrating legally.

But as there’s also no free lunch, the IRS is also blithely betraying the people it’s sworn to protect and defend: law-abiding taxpaying U.S. citizens.

“With our debt standing at over $14.5 trillion and counting, it’s outrageous that the IRS is handing out refundable tax credits, which are spending through the tax code, to those who aren’t even eligible to work in this country,” said Utah’s Sen. Orrin Hatch, the ranking Republican on the Senate Finance Committee.

“The disconcerting findings in this report demand immediate action from Congress and the Obama administration.”

At a time when enforcing the integrity of our border is a major federal failure, the one thing the feds shouldn’t be doing is offering additional incentives to encourage even more illegal immigration.

The fact that they do suggest an out-of-control federal government that wants, that’s right, wants, more illegal mendicants to justify its own gargantuan size.

That’s not an existence worthy of the American people and if the federal government’s minions cannot follow the laws, then it’s time to cut them down to a manageable mission. (IBD)

Comment on IBD: Since the IRS is about to become the “nanny” for Obamacare, perhaps we could put them in charge of rounding up illegal immigrants since they know where they are since they have both address and bank account numbers.

Sorry, the IRS Police will only go after you, the Legal American. Not the future Democrat voters of Amerika.

Amerika, what a country! And you want for more years of this don’t you? 🙂

Political Cartoons by  Bennett

Meltdown in Progress

Political Cartoons by Eric Allie

A New Waiver Class: A State!

The federal government Tuesday granted Maine a waiver of a key provision in President Barack Obama’s health care overhaul, citing the likelihood that enforcement could destabilize the state’s market for individual health insurance.

The U.S. Health and Human Services department said in a letter it would waive the requirement that insurers spend 80 cents to 85 cents of every premium dollar on medical care and quality improvement. Instead, the letter said, the state could maintain its 65 percent standard for three years, with the caveat that HHS intends to review the figures after two years. (Just after Obama’s hope-for re-election! :))

And this wouldn’t happen to have anything to do with the fact that Maine has to RINO Senators, now could it?? 🙂

The decision makes Maine the first state to receive a waiver of the requirement. Similar requests are pending from Kentucky, Nevada and New Hampshire.

Thing is, this will happen in every state. But that was the plan. So this is obviously a political move.

35% of Wages go to Entitlements and Non-Producers

Government payouts—including Social Security, Medicare and unemployment insurance—make up more than a third of total wages and salaries of the U.S. population, a record figure that will only increase if action isn’t taken before the majority of Baby Boomers enter retirement.

Even as the economy has recovered, social welfare benefits make up 35 percent of wages and salaries this year, up from 21 percent in 2000 and 10 percent in 1960, according to TrimTabs Investment Research using Bureau of Economic Analysis data.

“The U.S. economy has become alarmingly dependent on government stimulus,” said Madeline Schnapp, director of Macroeconomic Research at TrimTabs, in a note to clients. “Consumption supported by wages and salaries is a much stronger foundation for economic growth than consumption based on social welfare benefits.”

The economist gives the country two stark choices. In order to get welfare back to its pre-recession ratio of 26 percent of pay, “either wages and salaries would have to increase $2.3 trillion, or 35 percent, to $8.8 trillion, or social welfare benefits would have to decline $500 billion, or 23 percent, to $1.7 trillion,” she said.

Social welfare benefits have increased by $514 billion over the last two years, according to TrimTabs figures, in part because of measures implemented to fight the financial crisis.

And the measures implemented to buy votes.

Government spending normally takes on a larger part of the spending pie during economic calamities but how can the country change this make-up with the root of the crisis (housing) still on shaky ground, benchmark interest rates already cut to zero, and a demographic shift that calls for an increase in subsidies?

At the very least, we can take solace in the fact that we’re not quite at the state welfare levels of Europe. In the U.K., social welfare benefits make up 44 percent of wages and salaries, according to TrimTabs’ Schnapp.

Except there is a big difference. Europe is doing something about its runaway spending. The US is not.

And “entitled” don’t want to give up some of their greed, especially not Unions.

So if you have 35% of wages earned going to Entitlements. You have 47% of people not paying any taxes anyhow and you have a record number of people on Food Stamps  and 78 more Million people to retire and expect to be “entitled” then you have a meltdown in progress!!

The IRS reports that 100,000 federal civilian employees are seriously delinquent on their federal taxes. These aren’t just people who fell behind. These are people who have actively defied IRS letters and phone calls seeking payment. In 2009, the US government failed to collect $1 billion a year from federal employees alone.

But get out of line with ObamaCare and they’ll crush you like the bug you are!

And you know what were up against:

“The National Endowment of the Humanities is the reason we have in northern Nevada every January a cowboy poetry festival. Had that program not been around, the tens of thousands of people who come there every year would not exist.”

It just happens to be in, surprise!!! Elko, Nevada! Harry’s home state. Gee, that’s a coincidence!! 🙂

Senate Majority Leader Harry Reid defended the National Endowment for the Arts during a floor speech Tuesday, calling Republican proposals “mean-spirited”(DC)

Political Cartoons by Lisa Benson

Faced with the threat of losing funding from the federal government, National Public Radio (NPR) CEO Vivian Schiller defended the news outlet’s use of taxpayer money in a speech Monday, and brushed off criticism of bias as “perception.”

Calling government funding the “cornerstone of public media,” Schiller said NPR was “too critical to give up.”

Taxpayer funding is about 10% of their budget.

Don’t cut my pork,fat,waste, and abuse. Not in Backyard!

The screaming and whining and kicking like a 2 year having an unholy tantrum meltdown in the toy aisle of Wal-Mart has only just begun.

But we will be “green” even if it kills us!!

Anyone who understands basic economics already knows that President Obama’s $2.3 billion green-jobs initiative was snake oil. Now, thanks to Kenneth P. Green, we have statistics as well as theory to prove it.

In a new article, “The Myth of Green Energy Jobs: The European Experience,” the environmental scientist and a resident scholar at the American Enterprise Institute writes, “Green programs in Spain destroyed 2.2 jobs for every green job created, while the capital needed for one green job in Italy could create almost five jobs in the general economy.”

Ironically, Obama boasts his initiative “will help close the clean-energy gap between America and other nations.” But Green says, “(C)ountries are cutting these programs because they realize they aren’t sustainable and they are obscenely expensive.”

Obama claims that if we “invest” more, “the transition to clean energy has the potential to grow our economy and create millions of jobs — but only if we accelerate that transition.”

What could make more sense? A little push from the smart politicians and — voila! — we can have an abundance of new good-paying jobs and a cleaner, sustainable environment. It’s the ultimate twofer.

Except it’s an illusion, as economic logic demonstrates.

“It is well understood, among economists, that governments do not ‘create’ jobs,” Green writes. “The willingness of entrepreneurs to invest their capital, paired with consumer demand for goods and services, does that. All the government can do is subsidize some industries while jacking up costs for others. In the green case, it is destroying jobs in the conventional energy sector — and most likely in other industrial sectors — through taxes and subsidies to new green companies that will use taxpayer dollars to undercut the competition. The subsidized jobs ‘created’ are, by definition, less efficient uses of capital than market-created jobs.”

Green is using good, solid economic thinking. Many years ago, Henry Hazlitt wrote in his bestseller, “Economics in One Lesson,” “The art of economics consists in looking not merely at the immediate but at the longer effects of any act or policy; it consists in tracing the consequences of that policy not merely for one group but for all groups.”

In judging any government initiative, such as Obama’s green-jobs plan, you can’t look just at the credit side of ledger because the government is unable to give without first taking away.

Worse than that: Inevitably, more is taken away — destroyed — than is given because the government substitutes force and taxation for consent and free exchange. Instead of a process driven by consumer preferences, we get one imposed by politicians’ grand social designs. It’s what F.A. Hayek called “the fatal conceit.”

So we shouldn’t be surprised that green-jobs programs make energy more expensive. “(F)orcing green energy on the market (is) much, much more expensive,” Green said. “Using Spain as a model, when you do the math, you realize that creating 3 million new green jobs could cost $2.25 trillion.”

Of course, many people who push “green jobs” want the price of energy to rise so we’ll use less. If the environmental lobby wants Americans to be poorer, it ought to come clean about that.

The advocates of such programs don’t just misunderstand economics. They have lapsed into a pre-economic mentality. Rulers once believed they could do whatever they wanted, subject only to the physical laws of nature. If things didn’t work out as planned, it was because the people had failed to cooperate. But as economist Ludwig von Mises wrote, once economics emerged as an intellectual discipline, “it was learned that in the social realm too there is something operative which power and force are unable to alter and to which they must adjust themselves if they hope to achieve success … .”

That “something” is inescapable economic forces like the law of supply and demand.

Green is right when he says, “Central planners in the United States trying to promote green industry will fare no better (than Europe) at creating jobs or stimulating the economy.” (John Stossel)

But the environmentalist apparatchiks and Obama will “feel good” and that’s vastly more important than reality after all! 🙂

Political Cartoons by Gary Varvel

Some more Collective Bargaining Gems:

1. A Wausau public employee union filed a grievance to prohibit a local volunteer from serving as a school crossing guard.  The 86-year-old lives just two blocks away and serves everyday free of charge.

Principal Steve Miller says, “He said, you know, this gives me a reason to get up in the morning to come and help these kids in the neighborhood.”

But for a local union that represents crossing guards, it isn’t that simple.  Representatives didn’t want to go on camera but say if a crossing guard is needed, then one should be officially hired by the city.

2. Some state employees, due to the nature of their positions, are required to carry pagers during off-duty hours in order to respond to emergency situations.  Due to the collective bargaining agreements, these employees are compensated an extra five hours of pay each week, whether they are paged or not.

Cost: $6,000 a year per person.

3. ‘Outstanding First Year Teacher’ Laid Off

Milwaukee Public Schools teacher Megan Sampson was laid off less than one week after being named Outstanding First Year Teacher by the Wisconsin Council of English Teachers.  She lost her job because the collective bargaining agreement requires layoffs to be made based on seniority rather than merit.

In June 2010 , long before Scott Walker was elected, Milwaukee Public Schools fired 482 teachers–including Megan Sampson, a young educator named an “outstanding first year teacher” by the Wisconsin Council of Teachers of English.

Sampson and 481 other teachers were laid off for two reasons having to do with collective bargaining:

Informed that her union had rejected a lower-cost health care plan, that still would have required zero contribution from teachers, Sampson said, “Given the opportunity, of course I would switch to a different plan to save my job, or the jobs of 10 other teachers.

4. Under the Green Bay School District’s collectively bargained Emeritus Program, teachers can retire and receive a year’s worth of salary for working only 30 days over a three year period.  This is paid in addition to their already guaranteed pension and health care payouts.

5. In 2009, the City of Madison’s highest paid employee was a bus driver who earned $159,258, including $109,892 in overtime, guaranteed by a collective bargaining agreement.  In total, seven City of Madison bus drivers made more than $100,000 per year in 2009.

“That’s the (drivers’) contract,” said Transit and Parking Commission Chairman Gary Poulson.

But don’t worry, you’re just a mean, old, nasty, Robber-Baron, middle-class destroying  arsehole if you object to it!

And Al Sharpton will call you a “racist” and Michael Moore will just tell you it the “rich” people’s fault! (meanwhile both are filthy rich themselves)

Reality and Economics are toxic these days. And that is a meltdown in progress!

Political Cartoons by Michael Ramirez

Political Cartoons by Chuck Asay

Political Cartoons by Ken Catalino

It’s Good to be the King!

Political Cartoon

The Washington area’s affluence and education levels make it the wealthiest and most educated region in the nation, according to census data released Tuesday that reflect five years of relative prosperity compared with the rest of the country. (Washington Post)

Bureau of Labor Statistics: State and local government employers spent an average of $26.25 per hour worked for employee wages and salaries in September 2010, the U.S. Bureau of Labor Statistics reported today.  Wages and salaries accounted for 65.5 percent of compensation costs while benefits averaged $13.85 per hour worked and accounted for the remaining 34.5 percent.

That’s $40.10 per hour for government employees. It’s good to be the kings minions.

Health benefit employer costs in September 2010 were $4.65 per hour worked for state and local government and $2.10 in private industry.  Defined benefit retirement plan costs for state and local government employers were $2.94 per hour worked, significantly higher than 44 cents for private industry employers.

Their health care costs are twice that of the private sector and retirement plans (aka the fat Union pensions most likely) are nearly 7 Times higher than the private sector.

No wonder they want bailouts and ObamaCare, we the little people’s costs have to be controlled so that we can afford to pay the King’s minions their due tribute.

Among state and local government employees, average hourly compensation costs were higher for management, professional, and related occupations ($48.73) than for service occupations ($30.17) and sales and office occupations ($27.87).

No wonder they want everyone else to pay for them and why so many states are going bankrupt.

And why so many unions are viciously protective of their Golden Goose Parachutes.

Now this is GREED. Real, honest to God, GREED.

And guess what, they are mostly DEMOCRATS!

Fascinating isn’t. 😦

So when the boo-hoo acts and whining and crying and nashing of teeth continues and government spending is cut (hopefully)  just remember who’s been the dragon hoarding all the Gold.

Your Government.

And especially, the Government Unions and Government employees which are almost exclusively, Democrats.

So is this the reason for the Class Warfare?

To pay for their lavish greed they have to wage war on Private Industry and YOU.

You get the privilege of paying for their Golden Goose.

And if you don’t want to, well, you’re just a nasty, evil scrooge-like greedy capitalist pig. You want to screw poor people!

Meanwhile, they are counting their $40.01 per hour.

So who’s the victim in this war. Certainly not the Warriors. 🙂

And the War Dead, well, you’re just a bunch of dumb, ignorant, hacks who want the Greed-addicted drug addicts to spend less on themselves.

How Dare you!

It’s good to be the King!

But sire, the peasants are revolting!

Yes, they stink on ice! 🙂

(with thanks to Mel Brooks)

DREAM ACT Update

UCLA Professor Kent Wong (director of UCLA’s Center for Labor Research and Education) said: “We will win the dream act soon — very soon,” he exclaimed. “When that day comes, we will celebrate with millions and millions of people of people across this country who are standing with you tonight. Who stand for justice, who stand for democracy and equal opportunities for all.”

“When that day happens, the young people of the DREAM Act movement, will go on to accomplish and do great things with your lives,” he said. “You will go on to become lawyers, teachers, doctors and members of the US congress to replace those old white men… You are the hope and future of this country. You are hope and future of your generation.”

So there you have it, the DREAM Act is to  “replace” white people (with Hispanic Democrats mind you).

But that’s not racist, because a radical leftist said it, mind you. 🙂

Just like, cutting government spending will hurt the poor.

Orwell would be proud of you, my leftist sons.

 

 

Uncle Sam Getting Fat

Be who you are and say what you feel, because those who mind don’t matter. And those who matter don’t mind. ~Dr. Seuss

Michael Ramirez Cartoon

Government’s role in the economy has reached an unprecedented scale by at least one measure.

A record 30 cents of every dollar in personal income comes directly from government, Commerce Department data show.

And since government produces nothing and gets it money from you and me (the private sector) and there is now 47% of the people who don’t pay taxes at all and One in six Americans receives some form of government aid because of effects of the recession that started in 2007, a review of data indicates.

More than 50 million people are on Medicaid, a program principally designed to help the poor, and nearly 10 million Americans receive unemployment benefits, USA Today said Monday in a report based on data from state officials.

“Virtually every Medicaid director in the country would say that their current enrollment is the highest on record,” said Vernon Smith of Health Management Associates, a company that compiles data for the Kaiser Family Foundation.

More than 40 million people now receive food stamps, a jump of nearly 50 percent since the recession began, the report said. The unemployment rate in the United States remains above 9 percent.

You have more people dependent on less people for more money! 😦

But don’t worry, this was the “Summer of Recovery” and everything is fine. It just needs more time , according to our Harvard Educated Academic Elites — aka the Obama boys and girls.

And they just need to explain it better and suddenly you’ll have an epiphany and see how wonderful they are! 🙂
Including transfer payments (income support and health insurance benefits) and compensation to public employees, government paid out $3.8 trillion of $12.5 trillion in total personal income in July on an annualized basis.

And remember their “urgent” August bailout of state workers for  $26 billion was supposed to be partially paid by cuts in Food Stamps in 2014 (when the Health Care Mandate is set to kick in).

So if they just explain better how their Wimpy “I’ll bailout you today for a payment in 4 years” economics work for you, you’ll suddenly fall madly in love with them and bask in their greatness. 🙂

That 30.3% share of personal income compares to 25.5% before the recession and 23.5% in 2000. The level topped 27% in the wake of the 1991 recession and hit a prior peak of 28% in 1975.

So government workers personal income has risen 7.5 % SINCE the recession started (and Congress was taken over by Democrats in 2007). And you’re on the hook for it. Doesn’t that make you happy?

The government’s record share reflects the dismal state of private wages and the ramping of federal transfer payments from a historically high base.

“The private economy has been put through the wringer and thus policymakers have been working hard to fill the hole,” said Mark Zandi, chief economist at Moody’s Analytics.

Real private wages remain 8.4% below their December 2007 level and just 1.3% above their February bottom. That low was a level first reached in March 2001.

The weakness in private wages reflects deep layoffs and shorter workweeks due to the recession, and the “not terribly robust” prior economic expansion, said Josh Feinman, chief economist at Deutsche Asset Management in the Americas.

Meanwhile, government income payments are up 17% in real terms since the start of the recession. The real mover has been transfer payments, which accounted for a record 18.4% of personal income in July. That’s up by nearly half from 12.7% in 2000 and more than a quarter from 14.4% in 2007.

The growth is a combination of the inexorable rise of spending on Social Security and health care entitlement programs, as well as a spike in unemployment compensation, food stamps and Medicaid due to weak labor markets and expanded benefits included in the Recovery Act.

Real personal income less government transfer payments remains 5.5% below its December 2007 peak, yet real disposable income is up 2.7% since the start of the recession. That’s due to increases in government income payments and lower tax payments.

Too Much To Get Out?

The government’s role in supporting the recovery is already raising questions about how the economy will fare as the crutches are removed.

“Given how significant its role has become, it does make it more difficult for the government to exit out in a graceful way,” Zandi said.
The stimulus has already begun to fade, with more than a million unemployed exhausting jobless benefits of up to 99 weeks.

Zandi says even further government stimulus would be prudent, given the current slowdown.

In addition to tax cuts and spending hikes, another option would be a government-led mortgage refinancing push to make low-rate loans available to those with insufficient equity in their homes to qualify.

“To have a meaningful recovery, the private sector has to step back up to the plate,” Feinman said.

In prior recoveries, policy stimulus and inventory building eventually allowed for a handoff to a healing private sector, he says.

That handoff “is just not happening” said Feinman. He expects “a long climb back.”

The one area of private compensation that is growing, nonsalary benefits, is not as helpful as wage growth, which puts cash in people’s pockets, Zandi notes.

Real nonsalary compensation (private and government) is up 4.1%, likely reflecting rising health care costs and perhaps some catchup pension contributions.

During the Great Depression, when fiscal stabilizers and safety nets were in their infancy, the government’s share of personal income peaked at just over 16%. Even in World War II, when the government payroll ballooned, its share only briefly neared 25%, falling back below 20% until the 1960s.

The share of personal income is an incomplete gauge of government’s economic role because it doesn’t include direct spending. A better, though imperfect, measure would be the combined federal, state and local government budgets as a share of gross domestic product.

By this score, government was far bigger during World War II, when the federal budget alone topped 43% of GDP. While state and local figures are out of date, total government spending probably will be around 40% of GDP this year. (IBD)

And Obama & Co’s solution, they want to spend more money and still raise taxes on 1/1/11.

The definition of insanity is doing the same thing over and over again and expecting a different result.

But that’s what happens when you’re in an ideological ditch and you can’t get out.

So bring out the talking points:

“In the month I took office, we were losing 750,000 jobs a month,” the president said. “This morning, new figures show the economy produced 67,000 private sector jobs in August, the eighth consecutive month of private job growth.  Additionally, the numbers for July were revised upward to 107,000. Now that’s positive news, and it reflects the steps we’ve already taken to break the back of this recession.”

The net job loss for August is largely because of the layoffs of 114,000 Census temporary workers.

When May’s job numbers showed a net increase of 431,000 jobs – 411,000 of which were Census jobs — the president did note that “most of these jobs this month that we’re seeing in the statistics represent workers who’ve been hired to complete the 2010 census.” But in those June 4 remarks the president didn’t detail just how many of the 431,000 jobs were Census jobs – 95% of them — and he cited the overall report, and its deceptively large number as evidence that businesses are “starting to hire again. Workers who were laid off, they’re starting to get their jobs back. Companies that were almost forced to close their doors are making plans to expand and invest in new equipment.” (ABC)

So you can have you’re cake and eat it too! So Let them Eat Cake! 🙂

…and said he would “in the weeks ahead” be detailing “further steps to create jobs and keep the economy growing, including extending tax cuts for the middle class and investing in the areas of our economy where the potential for job growth is greatest.”

And judging from past performance that means more government jobs and more bailouts for states and unions.

Yeah, that’s the ticket…:(

Asked to what degree he regrets his administration’s decision to call this Recovery Summer, the president stammered then said, “I don’t regret the notion that we are moving forward, but because of the steps that we’ve taken.  And I’m going to have a press conference next week, where, after you guys are able to hear where we’re at, we’ll be able to answer some specific questions.” (ABC)

Oh god, he’s going to EXPLAIN IT AGAIN! Just in case you were too stupid to understand it every other time he’s said it! 😦

If he just explains it repeatedly enough you’ll get it. 🙂

And it could have been so much worse. 🙂

“This is what change looks like,” Obama said on signing into law the Health Care Cram down Bill.

So in November, we have to show HIM what change looks like then we have change ourselves too because they are the pimps, and we are the ho’s.  So we have to take them out of the drug dealing business and we have to stop using them.