By Dick Morris And Eileen McGann

In our book 2010: Take Back America – A Battle Plan, we write:

“The prospect we now face is not the intermittent up-and-down fluctuations of unemployment we have had since the Great Depression.

Thanks to Obama’s policies, we’re confronting the possibility of an unemployment rate that never comes down, just as they have in Europe. If we stay on Obama’s course, lower joblessness in the United States will be a thing of the past.”

The recent rise in unemployment back up to 9.6% and the loss of 54,000 jobs in August, suggests that our prediction is – dismally – coming true.


The Obama stimulus plan has finally kicked in: The higher spending he brought to our nation and the debt levels that are accompanying it are the result.

Why is unemployment remaining so high? Because the totality of Obama’s policies are dragging us into a depression.

• The prospect of dramatically higher taxes next year is freezing consumer spending, particularly in the upper income ranges which spend a third of America’s consumption.

• The huge changes that are looming in medical care brought about by Obama’s health care legislation are freezing new employment and expansion in the medical sector which accounts for 16% of GDP.

• The financial reform legislation has so raised the prospect of a federal takeover of any bank that makes “imprudent” loans that financial institutions are afraid to lend, freezing new job creation.

• The looming possibility of cap-and-tax legislation in the name of halting climate change is freezing any expansion in the manufacturing and energy sectors since these policies will force jobs to move overseas to locations that do not impose such a tax (e.g. India and China).

• The massive expansion in the deficit and in the resulting debt has so eroded confidence in our nation’s future that Americans are now saving 6% of their income, up from 1% in the past, sapping consumer spending.

• The threat of new rules for union elections that will spread private sector unionization is freezing business expansion plans.

Obama’s rush to spend, regulate, re-engineer, redistribute, and tax have stopped any recovery and are sending us back into recession.

In her wonderful book The Forgotten Man, Amity Shlaes notes how FDR’s policies in the late 1930s did the same thing. She notes how the imposition of the Social Security tax in 1937 (benefits did not start until 1941) and the rapid wage hikes that accompanied the passage of the Wagner Act (steel worker wages rose 40% in 1937) sent a recovering nation back into a new depression that lasted until the war started in 1939.

In his haste to re-make America and to bring us the “fundamental change” he promised as he campaigned for president in 2008, Obama has torpedoed the recovery and sent us back into a double dip recession.

The answer is to cut spending back to pre-Obama levels, reduce taxes and eliminate the threat of tax increases, zero fund the changes Obama has legislated in health care (and repeal them in 2013), eliminate the threat of cap-and-tax, and lay the basis for solid economic growth.

We have left the recession that started in 2007 and entered a new recession caused by Obama’s policies.

I love the idea of 0 funding the programs that Barry implemented. Perhaps when that happens, confidence in the economy will come back, places will start hiring (albeit slowly at first) and we can start to get back to work.

__________________
1987 560SL
85,000 miles

One of Obama's philosophies is that for the economy to go forward, someone has to spend. If the people aren't going to spend, then the government better. So he has done exactly that, but what should be learned from this "experiment" is that the government can't spend its way to a stronger economy, only the people can. When the people get their confidence back, we'll start spending. Until then, Americans are saving like never before - which is probably a good thing, anyways.

__________________
- Brian


1989 500SEL Euro
1966 250SE Cabriolet
1958 BMW Isetta 600

Nothing wrong with savings. Eventually that money will be used to buy stuff. Just not right now.

__________________
1985 380SE Blue/Blue - 230,000 miles
2012 Subaru Forester 5-speed
2005 Toyota Sienna
2004 Chrysler Sebring convertible
1999 Toyota Tacoma

It's all about jobs.

That means causing companies to hire, causing workers to make usable, high-quality products to export and consume locally.

This will be difficult because now that banks have had TARP, they can keep making money without changing anything. So why change anything?

Businesses pover-hired and under worked people. While demand was lowest and growing a little, they had enough workers. The businesses made money by actually having workers work 100% of the time. Now, even with overtime, businesses need to start hiring. But they will be slow to do so, until they can see the benefit. The benefit will drop initially, because they workers aren't working at max capacity, or even optimal capacity. So hiring will be slow, and in fits and spurts.

People have become addicted to a lot of low-value (economically speaking)consumption. Simple example: I drank soda pop once a week in the 1950s, as a kid. How often do kids drink it today? At least 15 times more often, in larger quantities. Does it benefit the economy as a whole? Not much, the margin is too small, except for the corporation that gets the franchise residuals.

Consumption has to be re-regulated so that it is on value-added things. Otherwise we will become known as the nation that charges each other for doing each other's laundry, and selling soda pop, not leading electronics and high-tech.

The fantasy that we will become a nation of ideas is just that-- fantasy. The information economy of the world can be directed from Iceland, San Marino, Poland or Bechuanaland, if you got enough servers.

__________________
Strelnik
Invest in America: Buy a Congressman!

1950 170SD
1951 Citroen 11BN
1953 Citroen 11BNF limo
1953 220a project
1959 180D
1960 190D
1960 Borgward Isabella TS 2dr
1983 240D daily driver
1983 380SL
1990 350SDL daily driver alt
3 x Citroen DS21M, down from 5
3 x Citroen 2CV, down from 6

He's in a hole. Someone tell him to stop digging.
Quite a few Dems have already deserted him on the income tax cut issue, most notably his own budget director, errr, make that his former budget director Peter Orsag. See the last sentence of this story, which I guess is a toss in to make it seem unbiased?
Isn't it interesting that the budget director and the Chair of the Council of Economic Advisors, Christina Romer, have both deserted town less than half way through the president's term?


IMO, the 100% "bonus" depreciation writeoff won't mean much to small businesses. They can basically get the same thing through Sec. 179, a permanent section of the code.

I think he's going down for the count with this one. Drawing a line in the sand over this is gonna hurt him in the long run. One and Done.

Today's NY Times:
Obama Is Against a Compromise on Bush Tax Cuts
By JACKIE CALMES
Published: September 7, 2010
WASHINGTON — President Obama on Wednesday will make clear that he opposes any compromise that would extend the Bush-era tax cuts for the wealthy beyond this year, officials said, adding a populist twist to an election-season economic package that is otherwise designed to entice support from big businesses and their Republican allies.

Mr. Obama’s opposition to allowing the high-end tax cuts to remain in place for even another year or two would be the signal many Congressional Democrats have been awaiting as they prepare for a showdown with Republicans on the issue and ends speculation that the White House might be open to an extension. Democrats say only the president can rally wavering lawmakers who, amid the party’s weakened poll numbers, feel increasingly vulnerable to Republican attacks if they let the top rates lapse at the end of this year as scheduled.

It is not clear that Mr. Obama can prevail given his own diminished popularity, the tepid economic recovery and the divisions within his party. But by proposing to extend the rates for the 98 percent of households with income below $250,000 for couples and $200,000 for individuals — and insisting that federal income tax rates in 2011 go back to their pre-2001 levels for income above those cutoffs — he intends to cast the issue as a choice between supporting the middle class or giving breaks to the wealthy.

In a speech in Cleveland on Wednesday, Mr. Obama will also make a case for the package of roughly $180 billion in expanded business tax cuts and infrastructure spending disclosed by the White House in bits and pieces over the past few days. He would offset the cost by closing other tax breaks for multinational corporations, oil and gas companies and others.

While the speech will be centrist in its policy prescriptions other than the Bush tax cuts, Mr. Obama’s language will be partisan as he seeks to sharpen the contrasts between Republicans’ record and efforts by Democrats to create more jobs, aides said.

White House officials have strenuously avoided labeling the proposal a second stimulus plan, a phrase that has taken on negative political connotations since the original roughly $800 billion recovery plan and subsequent additions have failed to push unemployment down substantially.

But it would provide his party with an agenda for the home stretch of the midterm campaign — though one with a small chance of being enacted quickly or helping the economy before Election Day if it were.

The two major pieces of the package — expanding and making permanent a popular credit for businesses’ research and experimentation expenses, and allowing them to write off the full value of new equipment purchases through 2011 — have longstanding Republican and corporate support.

The administration calculated that the package had to be attractive to Republicans and business groups if it has any chance of passage in the short time Congress will be in session before lawmakers go home to campaign.

Politically, however, the president is, in effect, daring Republicans to oppose the plan, in that way proving Democrats’ contention that they will block even their own ideas to deny Mr. Obama any victories. And by proposing business tax breaks that, according to nonpartisan analyses, would do more to stimulate the economy than extending the Bush tax rates for the wealthy, Mr. Obama hopes to buttress Democrats’ opposition to extending those rates.

With its tilt toward business tax cuts, the package that Mr. Obama is proposing risks discouraging liberals in his party who want more spending for projects that provide jobs, especially for a construction industry still staggered by the collapse of the housing boom.

They are not likely to be satisfied by another of the president’s proposals: to provide $50 billion immediately to build roads, air traffic control systems, waterways and more, and, for the long term, to create a national infrastructure bank. That is another bipartisan idea that would leverage federal money with state, local and private-sector investments to finance projects.

In any case, the administration acknowledges that its blueprint might not pass before Election Day, or even in the lame-duck Congress afterward.
“This is about long-term economic growth,” Robert Gibbs, the White House press secretary, said on Tuesday. “This isn’t about the next 60 days or the next 90 days. This is about how do we get our economy fully back on track, how do we get the millions that want to work back to work, and how do we repair the economic damage that’s been going on not just over the past two years but over the past 10 years.”

Republicans’ early reactions were hostile, especially to Mr. Obama’s proposals to close corporate tax loopholes to offset any costs.

“If the offsets for this new package are other tax increases, then it’s a nonstarter,” Senator Charles E. Grassley, a senior Republican of Iowa, said in a statement.

Douglas Holtz-Eakin, a former director of the Congressional Budget Office and an adviser to Republicans, predicted in an interview that “nothing is going to happen between now and the election,” except perhaps for passage of a separate administration package of tax cuts and lending for small businesses. Senate Republicans had been blocking that legislation.

Nigel Gault, chief economist for IHS/Global Insight, an economics consulting firm, said he liked both the infrastructure and R&D proposals but “they’re not going to kick-start the economy.”

Mr. Gault and other economists questioned why the administration was not proposing a major payroll tax cut to spur hiring. The White House considered the idea, officials said, but dismissed it in part because it would reduce revenues to Social Security and Medicare.

Martin Feldstein, who was economic adviser to President Ronald Reagan, said all the Bush tax cuts should be extended for two years because even letting those for the wealthy lapse would be “a blow to a very fragile economy.”

To the chagrin of the White House, Mr. Obama’s recently departed budget director, Peter R. Orszag, took the same stance on Tuesday in a column in The New York Times.

A version of this article appeared in print on September 8, 2010, on page A1 of the New York edition.

Bush's legacy continues...

If the Bush tax cuts for the wealthy will fix the economy why did the recession start while they were still in place? The magic Bush tax cuts should have prevented the recession.

The top tax bracket has gone from over 80% in the 50's to 35% under Bush.
If cutting taxes on the wealthy is so good for everyone why is the middle class struggling?

And as the dimbulb minority repub speaker wants to refir to it as a "tax hike" --letting the tax break for the wealthiest expire and return to the norm of them having to pull their weight is NOT a tax hike!

What do they call going from one tax rate to a higher tax rate where you are?

When it was the haves giving the haves a break-now being made right it called Reality Check.
The rightious right got us into the bucket of DUNG, And they want to continue on with the blinders on and pretend the good times are still gonna roll for them--and let the grandchildren take care of the mess long after they are dead-its not their problem.

Do you want socialism for yourself ? So "all those other people" have to pull the weight. I thought all the conservatives were against socialism--But it really doube speak, with the forked tongue.

It's a tax hike on earners who earn more than you and rather than defending that strategy on the merits, it's easier to deny that truth? Taxing people at one rate and then taxing them at a higher tax rate is by definition a "tax hike" and Republicans who point that out are accurate!

What I learned in macro econ is that unemployment will rise when the economy comes out of a recession because now people are back on the hunt for a job and technically unemployed because when they dropped out of the hunt they no longer were included in the statistics

Did they explain to you the mechanism for determining how "people back in the hunt for a job and technically unemployed" are counted? Do people who have "dropped out of the hunt" sign up somewhere as "back on the hunt for a job and technically unemployed" to then be included in the statistics?

p.t. barnum would be proud - a prostitute loving, toe sucking charlatan can still find some pigeons. dick morris is so full of bile, its a wonder he can even move. hey, if being a toady to the rich and powerful makes him happy, and spewing hate at the working man keeps him employed, then we should all be happy too. good comedy is hard to come by. eat the poor.

__________________
"The law, in its majestic equality, forbids the rich as well as the poor to sleep under bridges, to beg in the streets, and to steal bread."