Obama and his Job Creation Fantasies

When crazed idealists hold power they make bizarre and harmful demands on citizens. Demands like pressing citizens to drive $40,000 electric cars rather than the cars they would rather drive, like $20,000 cars that get 30 miles per gallon. Or SUVs that travel 25 miles on a gallon.

Have these deluded people studied the facts of oil consumption in the US? The world? It seems they cannot calculate aggregate consumption, and as a result of that inability they believe if they push Americans hard enough to buy electric cars they cannot afford nor want, that somehow oil consumption will drop.

Are they unaware that a complete replacement of the US auto fleet takes about 17 years? However, as a result of rising car quality -- evident from longer and longer warranties -- the replacement cycle is likely to increase.

Here's a thought. If the government truly wanted to accelerate the pace at which new cars enter the economy, the government should offer price supports, like the price supports it gives farmers, and give those price supports to scrap-metal dealers. Permit them to offer a sufficiently high price to buy any car that is more than 10 years old. If Americans are offered top dollar for a 10-year-old car, they are likely to take the money and buy a new vehicle. I'll bet a government program to buy old cars would work as well as any other financial stimulus program the government has attempted.

Obamanomics Failing to Create Jobs

Tuesday August 31, 2010

With thousands of young college graduates moving in with parents and returning Iraq War veterans facing long-term unemployment, President Obama is scrambling for cover.

Irresponsible spending, largesse for big banks and subsidies for a broken health care system have busted the budget and failed to create jobs.

Economists expect the Labor Department to report on Friday the economy lost another 80,000 jobs in August after shedding 131,000 jobs in July.

Completion of the Census accounts for most of the loss, but the report will demonstrate that rewarding Democratic Party academics with new high paying regulatory jobs and general hostility toward business is causing America's largest enterprises to head for China and small businesses to wither and die.

The unemployment rate will likely creep up a bit closer to 10%, as more Americans drain their retirement accounts and endure the frustration of slammed doors in Barack Obama's jobs market.

In July alone, 381,000 adults chose to quit looking for work altogether, and that trend will continue in President Obama's land of dashed dreams and squandered opportunities.

Economists expect the private sector added about 100,000 jobs in August but that is an abysmal performance 14 months into a recovery from a deep recession.

The economy must add 13 million private sector jobs by the end of 2013 to bring unemployment down to 6%. President Obama's policies are not creating conditions for businesses to hire those 320,000 workers each month, net of layoffs.

Net of inventory adjustments, the economy's demand for goods and services is growing at only about 1% a year. The real potential is about 5% but with economic policies so ill conceived and with a president so ambivalent about private enterprises -- other than those run by Wall Street barons, Hollywood producers and union bosses -- that simply is not possible.

In the second quarter, consumer spending; investment in new structures, equipment and software; and government purchases added 4.4% to demand. But as imports grew much more rapidly than exports, the trade deficit tapped off 3.4%. The difference, 1%, is annual growth in demand for U.S.-made goods and services. That has been the pace since the recovery began in July 2009.

Businesses can accommodate up to 2% growth in demand just by improving productivity and not adding workers. Unless the rapid growth in imports can be curbed, the U.S. economy is headed for very slow growth and rising unemployment.

The president's economic policies -- more spending, taxes and regulation for Americans and appeasing foreign mercantilists like China -- is simply not working.

The massive permanent expansion in federal spending and regulatory oversight built into President Obama's budget is discouraging private hiring by raising fears of even higher taxes and yet more intrusive regulation.

Simply, higher taxes discourage purchases of non-essentials and high-line durable goods, like better appliances, more appointed automobiles and higher quality homes, and higher taxes and tougher regulation increase incentives to offshore production to China and other locations where those burdens are less and entrepreneurship is more welcome.

Prior to the 2008 crisis, President Bush spent 19.6% of GDP and the deficit was $161 billion; whereas two years into the economic recovery in 2011, President Obama's budget projects outlays at 25.1% of GDP and a $1.3 trillion deficit in 2011. The latter figures are like to be closer to 27% and close to $2 trillion if the president does not accomplish the 4% growth his budgets assume in stark contrast to the real world the rest of us struggle.

Too much spending will require new taxes, and not just pushing rates marginally above 50% on families earning $250,000. And, higher rates for those families will raise taxes on half the income earned by proprietorships -- those small and medium sized businesses the president is urging to create jobs.

Much of the $787 stimulus money was squandered on political hobby horses that create few jobs. For example, grants to build green buildings displace other, more cost-effective private construction and don't increase the amount of commercial space rented or built over the next several years. By delaying projects, those grants have slowed construction spending and killed jobs.

The biggest banks received more than $2 trillion in TARP and Federal Reserve assistance to clean up their balance sheets and recapitalize securities trading, while the 8,000 regional banks got little assistance and remain burdened by toxic real estate loans. Consequently, nearly 250 regional banks have failed, and small and medium sized businesses cannot get credit to expand.

In addition to credit, businesses need more customers to create jobs, and the trade deficit -- in particular, imports of oil and the imbalance with China -- cut a huge hole in demand for U.S. goods and services. Without addressing oil and China, other efforts to create jobs are futile.

The president's moratorium on deep water drilling, though popular with environmental fundamentalists, kills jobs by laying off workers in the oil, gas and supporting industries and by sending too many consumer dollars abroad that could be spent here.

Detroit has the technology to build much more efficient gasoline-powered vehicles now, and a shift in national policy to rapidly build these would reduce oil imports and create many jobs. Instead, the president proposes to replace stickers on cars that report gas mileage intelligent folks can understand with grade school letters -- A, B, C...

If we could only have those letter grades for the president's economic appointees, we might be better off

China's undervalued currency makes its products artificially cheap and deceivingly competitive on U.S. store shelves, but Beijing's promises of new flexibility on the yuan have not translated into meaningful revaluation. The president, like a provincial premier, stands patiently accepting Chinese largess -- bond financing for profligate spending in Washington.

If President Obama wants to fix the federal deficit and create jobs, perhaps he should spend less, get serious about better using and developing American energy resources and quit appeasing China.

Candidate Obama promised those things but President Obama's memory seems short on everything but the failings of presidents passed.

Obama to Attend Start-Up of Iranian Nuclear Plant

Michelle and Sasha were looking for rain in Spain. Instead, they found sun and fun on Spanish beaches during a trip largely covered by taxpayers.

Meanwhile, Barack decided on a trip of his own. After the success of his new approach to diplomacy with Iran, he's scheduled to attend a ribbon-cutting ceremony at Iran's first nuclear reactor. He, Iran's President Ahmadenijad and Russia's Prime Minister Vladimir Putin will jointly hold the scissors and then head off for a private lunch.

Russia: Iran's nuclear plant to start next week

Aug 13, 2010

MOSCOW (AP) - Russia's nuclear agency said Friday that it will load fuel into Iran's first nuclear power plant next week, defying U.S. calls to hold off the start of the launch.

Rosatom spokesman Sergei Novikov said Friday that uranium fuel shipped by Russia will be loaded into the Bushehr reactor on Aug. 21, beginning the startup process.

"From that moment the Bushehr plant will be officially considered a nuclear-energy installation," he told The Associated Press.

The United States has called for Russia to delay the startup until Iran proves that it's not developing nuclear weapons. Russian officials said that the latest U.N. sanctions against Iran won't affect the Bushehr project.

Russia signed a $1 billion contract in 1995 for building the Bushehr plant, but it has dragged its feet on completing the project for years.

Moscow has cited technical reasons for the delays, but analysts say Moscow has used the project to press Iran to ease its defiance over its nuclear program.

Novikov said that Rosatom chief Sergei Kiriyenko will travel to Bushehr in southern Iran for the Aug. 21 ceremony, which will also be attended by the Iranian Vice President Ali Akbar Salehi, who also heads the Atomic Energy Organization of Iran.

Prime Minister Vladimir Putin said in March that the Bushehr plant would begin operating this summer. Some Iranian lawmakers have accused Russia of delaying the project under the Western pressure.

It's the Oil Industry. We gotta do something, anything, says Obama

The Obama administration wants proof that oil companies can respond to oil well disasters. How will Ken Salazar at the Interior Department know if a plan to cap a well blow-out will work? What's wrong with the current method? Based on anecdotal evidence, existing blow-out preventers have handled the job almost flawlessly for decades.

Okay. Something went terribly wrong on the Transocean rig that was destroyed in April. Seems most likely that existing blow-out preventers need some improvements to end a repeat of the Gulf disaster. But overall, BP jumped in and after working endlessly at a site a full mile below the waters' surface, it stopped the leak. I think the results speak for themselves. Pretty impressive.

Anyway, it is obvious that when it comes to the oil business -- any business -- the Obama administration has no idea what it's doing.

Obama Oil-Spill Commission Questions Drilling Halt

Aug 9, 2010


The presidential commission investigating BP Plc’s Gulf of Mexico oil spill has asked the Obama administration if a temporary ban on deep-water drilling should be lifted for certain rigs.

The commission wrote to Michael Bromwich, director of the Interior Department’s Bureau of Ocean Energy Management, on Aug. 6, seeking information on the moratorium, according to a letter released today. President Barack Obama suspended drilling in waters deeper than 500 feet though Nov. 30.

The moratorium has been criticized by the oil industry and Gulf Coast lawmakers such as Senator Mary Landrieu, a Louisiana Democrat, who told the commission last month that the ban would lead to rising unemployment in the region. Bromwich last week said drilling might resume sooner than the end of November.

“We are particularly interested in whether individual rigs, or categories of rigs, subject to the moratorium are sufficiently safe to allow the moratorium to be lifted,” the commission said in the letter.

The suspension will remain in place until companies can show they are able to prevent and contain spills such as BP’s, which spewed an estimated 4.9 million barrels of crude after an April 20 explosion aboard the Deepwater Horizon drilling rig, Interior Secretary Ken Salazar has said. Salazar told the House Oversight Committee on July 22 that he would consider modifications based on new information.

Bromwich last week began a series of public hearings on the moratorium with industry officials, academic experts and environmentalists.

Cut Short

“We may be able to cut short the moratorium,” Bromwich told reporters Aug. 3 at a briefing in Washington.

The National Commission on the BP Deepwater Horizon Spill and Offshore Drilling, which held its first hearing in New Orleans July 12, has asked Bromwich for information on how the agency is evaluating rig safety, according to the letter. Bob Graham, co-chairman of the commission, had said the panel wouldn’t have the resources to evaluate the safety of the rigs or the ability of the oil industry to respond to another spill.

The panel might use its “bully pulpit” to ensure that the Obama administration knew the region’s concerns about the drilling ban, Graham said.

Gibbs says No Muslim Suicide Bombers going into Space

After the head of NASA told the world how President Obama wanted him to help muslims obtain space technology -- with which they might conduct attacks on the non-muslim world -- the administration realized the cat was out of the bag and quickly began efforts to put animal back into its sack.

Too late, however. Gibbs said NASA head Bolden mis-spoke. More like Bolden gave a mis-speech. The gasbag leader of NASA restated his claim that Obama gave him direct orders to help muslim nations get space technology.

Yeah. Muslims want to explore space just like they want nuclear technology to generate electricity.
Muslim Outreach Not the Job of NASA, White House Says

White House Press Secretary Robert Gibbs said Monday that NASA Administrator Charles Bolden must have misspoken when he told Al Jazeera last month that one of his top priorities is to reach out to Muslim countries.

"That was not his task and that's not the task of NASA," Gibbs said.

Bolden, though, said last month in the interview that it was President Obama who gave him that task. He made a similar claim in February.

The White House also backed up Bolden last week when his remarks first stirred controversy. A White House spokesman last Tuesday said Obama wants NASA to engage with the world's best scientists and that to meet that challenge, NASA must "partner with countries around the world like Russia and Japan, as well as collaboration with Israel and with many Muslim-majority countries."

NASA last week walked back Bolden's claim that Muslim outreach was the "perhaps foremost" plank of his mission, saying that Bolden was merely talking about his "outreach" responsibilities and that space exploration is still NASA's No. 1 job.

But Gibbs on Monday appeared to deny that Bolden was asked to focus on Muslim outreach at all.

Asked whether Bolden misspoke, Gibbs said: "I think so."

He said he wasn't aware of Obama speaking to Bolden about his comments.

The Muslim comments were met with a wall of criticism last week from conservatives and former NASA officials who said that while Muslim-nation outreach is laudable, it should not be a NASA priority.

Bolden said in the interview that Obama told him before he took the job that he wanted him to do three things: inspire children to learn math and science, expand international relationships and "perhaps foremost, he wanted me to find a way to reach out to the Muslim world and engage much more with dominantly Muslim nations to help them feel good about their historic contribution to science ... and math and engineering."

He Can't Walk on Water or Oil

Obama Critics Should Have Voted for Red Adair

June 11 (Bloomberg) -- The blame game is replacing baseball as the U.S. national pastime.

First it was the greedy Wall Street bankers who got us into this mess, were rewarded with a government bailout and then went back to the business of making money.

Next came the insurance companies, whose collective scalp was shaved and sacrificed for the greater good: garnering support for ObamaCare.

Now it’s the oil companies, which have joined the list of personae non grata following the BP Plc oil spill in the Gulf of Mexico.

And who’s getting the blame for the response to the BP spill? Why, President Barack Obama.

This makes as much sense as blaming the weatherman for global warming. Obama can’t plug a hole 5,000 feet below the ocean’s surface, as first daughter Malia asked him to do.

Nor can his energy secretary, Steven Chu, winner of the Nobel Prize in physics, find a quick fix to halt the flow of tens of millions of gallons of oil into the Gulf, threatening the coastline’s delicate ecosystem and the livelihood of its residents. (Chu, who won the Nobel for “the development of methods to cool and trap atoms with laser light,” knows more about black holes than well holes.)

Screeds accusing the president of being detached or disengaged since the April 20 explosion and subsequent collapse of the Deepwater Horizon oil rig are about style, not substance. Frustration has given way to blame from both sides of the aisle. If the public wanted an ace fighter of oil-well fires and blowouts, they should have voted for Red Adair.

Misplaced Anger

“It is better to be angry at Obama for his health-care and labor policies, not this,” writes Richard Epstein, professor of law at the University of Chicago, in a June 7 column for Forbes.com.

Epstein’s on to something. Blaming the president for failing to halt the oil spill is unwarranted. Let’s look at some areas where blame is more appropriate.

1. Labor Policies

I doubt Epstein was echoing the view that the president isn’t doing enough to create jobs. The Oval Office isn’t an employment office. Government’s role should be to foster an environment that encourages the private sector to create jobs. Raising the cost of hiring isn’t a winning strategy.

The civilian unemployment rate topped out at 10.1 percent last year, below the 10.8 percent peak during the 1981-1982 recession. Teen unemployment set a record, however, rising to 27.6 percent in October, the highest in the 62-year history of the series. Raising the minimum wage to $7.25 last year, the third step in a three-year $2.10 increase, didn’t help.

Minimum Wage, Maximum Pain

I’m always reminded of my late friend, economist Bob Laurent, when discussions about the minimum wage come up. Bob would ask, “Why raise the minimum wage to $5.00? Why not raise it to $100 and make everyone rich?”

Answer: Because there’s a cost. Putting a floor under the price of labor -- setting it above the equilibrium price -- results in increased supply (more people willing to work for an above-market wage) and reduced demand as employers consolidate the functions of low-wage workers. Unemployment goes up.

Obama didn’t sign the minimum wage increase into law as president; he did vote for it as a senator from Illinois. During the campaign, he promised to increase it to $9.50 by 2011.

Maybe the president will be too preoccupied crafting Son of Stimulus to keep his promise and deny more young Americans a start in the work world.

2. Health Care

Just what the U.S. needed: another entitlement program that promises more than it can deliver. The U.S. was already facing an unfunded liability for Medicare and Social Security -- the difference between benefits promised to current and future retirees and the taxes and premiums collected -- of more than $100 trillion in today’s dollars, according to the 2009 Social Security and Medicare Trustees reports. That was before universal health care became the law of the land.

Few would object to the goal of providing universal access to health care. Everyone should object to the failure of the health-care plan enacted earlier this year to do the one thing that would lower costs: Make the price of health care transparent to consumers.

While individuals and small businesses will be able to choose a plan on health-insurance exchanges, they will still be divorced from the cost of health-care services. Who among us really knows what a colonoscopy costs?

3. Foreign Policy

Obama seems to have difficulty differentiating between our strategic allies and enemies. The “special relationship” between the U.S. and the U.K., a phrase coined by Winston Churchill in his 1946 “Iron Curtain” speech, has gotten less special in the 16 months since Obama took office. Obama’s tactless gesture of shipping a bust of Churchill back to the U.K. was symbolic of the deteriorating ties.

The president claims that brokering a Mideast peace deal is a “vital national security interest” for the U.S. In other words, our security depends on the creation of a Palestinian state.

That’s pretty much what Arab leaders have been telling their populations for decades to deflect attention from their lousy leadership. It’s easier to convince the masses that the problem is an external oppressor and two small pieces of land, one on the West Bank and the other on the Mediterranean Sea, than let them face an uncomfortable reality: The Arab world had no interest in building a real state in Gaza, as opposed to a terrorist outpost, after Israel withdrew completely in 2005.

Criticism of Obama’s handling of long-time allies is justified. Those who blame him for not commandeering BP’s underwater robots should take a deep breath and find some serenity. They should accept what the president can’t change, challenge him for what he can and have the wisdom to know the difference.

Closing in on closing the Gulf oil leak

Efforts to drill the relief well are underway. Capturing the escaping oil is working, and soon the process will improve to the point where it is capturing virtually all the oil. British Petroleum has responded to the Gulf catastrophe with speed and growing success. The company is gaining control over a bad situation. But it is moving toward the resolution of the crisis.

Not that stock investors have noticed. The price of BP shares fell below $34 when trading began today. That's a drop of more than 45% from its 2010 peak of $62.

BP earns more than $20 BILLION a year, which means it is prepared and capable of paying the full cost of cleaning the mess made by the leaking oil. Meanwhile, BP is a British company, which means the president of the US and the US government have little to say about the company's management outside of enforcing drilling and safety rules.

Investigations of the operation of the Transocean rig show its managers were attempting to following mandated safety and drilling rules. The operators may have made errors, but they were, nevertheless, attempting to operate according to regulatory requirements.

It is beginning to appear that the regulations themselves were the weak link in this chain.

BP says 'virtually all' oil to be captured soon

June 8

GULF SHORES, Ala. (AP) - A top BP executive says the company expects to be capturing virtually all the oil leaking from the Gulf floor by early next week.

Chief operating officer Doug Suttles told The Associated Press on Tuesday in Gulf Shores, Ala., that the flow should decrease "to a relative trickle" by Monday or Tuesday.

President Barack Obama plans to visit the region the same days.

Suttles says a second pumping ship should improve the process. And he says a new containment cap being built will seal better and reduce leakage.

He says BP believes the oil now washing up on the coast was spilled soon after a rig exploded about 50 days ago and sank.

Suttles says oil will probably continue to wash up for about the same period after the well fully shuts down.

A relief well expected to stop the flow is expected to be done in August.

The Peter Principle Updated by Obama

President Obama is not in charge. It is beginning to appear that some people are noticing. For a long time he disguised it well, but despite his manner of speech, he's a bumbler. Whether the problem is oil leaking in the Gulf of Mexico or muslims who want to destroy Israel and drive all Jews out of the middle east, his inability to project power has convinced the worst people in theworld that he is an incompetent wimp.

Spill reveals Obama's lack of executive experience

In mid-February 2008, fresh from winning a bunch of Super Tuesday primaries, Barack Obama granted an interview to "60 Minutes" correspondent Steve Croft. "When you sit down and you look at [your] resume," Croft said to Obama, "there's no executive experience, and in fact, correct if I'm wrong, the only thing that you've actually run was the Harvard Law Review."

"Well, I've run my Senate office, and I've run this campaign," Obama said.

Seven months later, after receiving the Democratic presidential nomination, Obama talked with CNN's Anderson Cooper. At the time, the news was dominated by Hurricane Gustav, which was headed toward New Orleans and threatening to become a Katrina-like disaster. "Some of your Republican critics have said you don't have the experience to handle a situation like this," Cooper said to Obama. "They in fact have said that Governor Palin has more executive experience. ..."

"Governor Palin's town of Wasilla has, I think, 50 employees," Obama answered. "We have got 2,500 in this campaign. I think their budget is maybe $12 million a year. You know, we have a budget of about three times that just for the month. So, I think that our ability to manage large systems and to execute, I think, has been made clear over the last couple of years."

Obama ignored Palin's experience as governor of Alaska, which was considerably bigger than the Obama campaign. But his point was clear: If you're worried about my lack of my executive experience, look at my campaign. Running a first-rate campaign, Obama and his supporters argued, showed that Obama could run the federal government, even at its most testing moments. He could set goals, demand accountability, and, perhaps most importantly, bend the sprawling federal bureaucracy to his will.

Fast forward to 2010. The oil leak in the Gulf of Mexico is gushing out of control. The Obama administration is at first slow to see the seriousness of the accident. Then, as the crisis becomes clear, the federal bureaucracy becomes entangled in itself trying to deal with the problem. "At least a dozen federal agencies have taken part in the spill response," the New York Times reports, "making decision-making slow, conflicted and confused, as they sought to apply numerous federal statutes."

For example, it took the Department of Homeland Security more than a week to classify the spill as an event calling for the highest level of federal action. And when state officials in Louisiana tried over and over to win federal permission to build sand barriers to protect fragile coastal wetlands from the oil, they got nowhere. "For three weeks, as the giant slick crept closer to shore," the Times reports, "officials from the White House, Coast Guard, Army Corps of Engineers, Fish and Wildlife Service, National Oceanic and Atmospheric Administration and Environmental Protection Agency debated the best approach."

The bureaucracy wasn't bending to anyone's will. The direction from the top was not clear. And accountability? So far, the only head that has rolled during the Gulf crisis has been that of Minerals Management Service chief Elizabeth Birnbaum.

But during a May 27 news conference, Obama admitted he didn't even know whether she had resigned or been fired. "I found out about it this morning, so I don't yet know the circumstances," the president said. "And [Interior Secretary] Ken Salazar's been in testimony on the Hill." Obama's answer revealed that he hadn't fired Birnbaum, and he couldn't reach a member of his Cabinet who was a few blocks down Pennsylvania Avenue.

Given all that, perhaps candidates in future presidential races will think twice before arguing that running their campaign counts as executive experience.

A few days before Obama won the White House, Bill Clinton joined him for a late-night rally in Kissimmee, Fla. Clinton, who became president after 12 years as a governor, told the crowd not to worry about Obama's lack of executive background. Given the brilliance of Obama's campaign, Clinton said -- and here the former president uncharacteristically mangled his words a bit -- a President Obama would be "the chief executor of good intentions as president."

Chief executor of good intentions? Perhaps that's what Obama is now. But with oil gushing into the Gulf, that's just not good enough.