The Party of Income Inequality Is?

The Democratic Party!  For all of its huffing and puffing that it is the party of income equality, the Democratic Party has political control of by far the most areas of the US with high income inequality.  That party likes to claim that the middle class and low wage industry workers have been left behind in income growth over the years.  Let us look at a very interesting graph of the income growth in high wage, middle wage, and low wage industries since 2007:

The high wage industries wage growth over the years from 2007 into 2019 has been relatively steady.  The middle wage industries pay growth had some significant dips in 2010 and 2014 under Obama's administration.  The low wage industry wage growth rate hit lower rates of increase in 2010 and 2012 under Obama.  The Democrats will point out that after that low in 2012, the low wage industry wage growth began to get better until it was about the same rate of growth as that of the high wage industry wage growth rate in 2014.  By 2015, the wage growth rates were pretty close for all three industry groups.  However, in early 2018 wage growth for the low wage industries took off, achieving far faster rates of growth compared to the middle and high wage industry wage growth rates.  Apparently, the economic policies of the Trump administration are quite favorable to wage growth on the part of the low wage industries.

So, just as those areas of the country represented by Republicans in Congress tend to have less income inequality, Republican economic policies under Trump are enabling low wage earners to catch up with higher wage earners while in many of the years under Obama they were falling behind more and more.

Michael Strain of AEI notes that the median wages of all workers increased by 25% over the past 30 years corrected for inflation.  The wages of the poorest paid 20% of workers grew by more than one-third.  The poorest paid workers have actually been catching up in wage income therefore.  Income inequality has decreased.  Applying a broader income measure that takes into account income from fringe benefits, capital gains and dividends, Social Security, Medicaid and Medicare benefits, unemployment insurance, food stamps, and federal tax payments, this reduction of total income inequality remains substantial.  The median household income by this measure increased by 43% from 1990 to 2015.  In comparison, the households in the bottom 20% had an increase in income of 62%.  As the American economy has grown since 1990, the bottom 20% of households on the total income scale have benefited even more than the median household has.

The common claim of the Democrat Party that the poor and the middle class are falling behind and somehow suffering does not hold up.  It is true that they could have benefited more had government policies been different.  The economy overall could have grown more rapidly with policies more friendly to the free, voluntary private sector.  Had that extra growth path been chosen, median and poorer households would have had greater increases in income.  We see evidence of how that would have been the case in the recent surge in income of the low wage industries under the Trump administration with its decreased cost of regulations, its signalling of fewer arbitrary and expensive future regulations, and its tax cuts favoring business investments to increase business productivity.  The Obama regulatory chaos and extreme uncertainty with a will to wipe out entire industries extended the Great Recession period of slow economic growth, much like Franklin D. Roosevelt's capricious federal management of the economy that greatly prolonged the Great Depression and the later uncertainty caused by LBJ, Nixon, and Carter offer lessons in how to slow economic growth and with it to deny most of us the benefits of an improved standard of living relative to what the Democrats will generally allow us.

The free markets of a Capitalist society unleashed would benefit most Americans greatly and that would most definitely include most low wage Americans!

Dismantling the Business Oppressive Dodd-Frank Act

The new minority leader in the Senate, Democrat Chuck Schumer, has been chortling that he has the votes to prevent the repeal of the anti-business growth Dodd-Frank Act.  Dodd-Frank was passed by Democrats on the heels of the Great Recession as a means of deflecting criticism from the government and its policies on home mortgages to pretend that the causes of the Great Recession were entirely or mostly due to private financial institutions.  Senator Christopher Dodd and Congressman Barney Frank had been among the most vociferous advocates of the government policy of easy credit for home loans and had explicitly claimed before the financial crash that there was no looming credit risk.  President-elect Trump has pledged to repeal Dodd-Frank, which is a very good idea.

A very interesting article in the 17 November Wall St. Journal by Peter Wallison discusses both the false pretenses that were used to justify the Dodd-Frank Act and the harm done to recovery from the recession and to economic growth rates by that act.  On the matter of whether the act actually addressed the causes of the recession and a few of its consequences:

Signed into law in 2010, Dodd-Frank was based on the idea that insufficient regulation, particularly of Wall Street, had allowed a buildup of subprime mortgages, a housing bubble and, ultimately, the 2008 financial crisis. The Democrats who controlled the Congress elected in 2008 acted quickly to follow out the implications of this diagnosis by adopting Dodd-Frank, the most restrictive financial legislation since the New Deal. 

Strikingly for such important legislation, there was no significant debate in Congress about whether the cause of the crisis had been correctly identified.

A later study, in 2014 by my colleague at the American Enterprise Institute Edward Pinto, showed that by 2008 more than half of all mortgages in the U.S. were subprime or otherwise risky, and 76% of those were on the books of government agencies. This leaves no doubt that government housing policies—and not a lack of regulation—created the demand for these risky mortgages. But by then it was too late. 

It is not difficult to find connections between Dodd-Frank and the historically slow recovery from the financial crisis. Here’s a sampling. 

The Financial Stability Oversight Council, a Dodd-Frank invention, was empowered to designate large financial firms as systemically important financial institutions, or SIFIs, turning them over to the Federal Reserve for “stringent” regulation. One of the council’s earliest actions, in July 2013, designated GE Capital as a SIFI. 

GE soon recognized that its huge financial subsidiary was wilting under the Fed’s control. Seeking an exit, GE wound down GE Capital, eliminating from the market an important source of funding for small and innovative firms. 

The Volcker rule, another Dodd-Frank provision, prohibited banks and their affiliates from trading securities for their own account, although there was no evidence that this activity had any role in the financial crisis. 

Soon, trading desks all over Wall Street were closing down, and traders were complaining that the debt markets were dangerously short of liquidity. The Treasury Department, deeply tied into Dodd-Frank, said it was “studying” the issue. It still is, and spreads are still historically wide. 

Small banks, the credit sources for small businesses and startups, faced new and costly regulation, requiring them to hire compliance officers instead of lending officers. 

One regulation on mortgage lending from the Consumer Financial Protection Bureau—a Dodd-Frank agency—was over 1,000 pages long. Imagine that landing on your desk in a small bank. 

No wonder, as this newspaper recently reported, banks are no longer the nation’s principal mortgage lenders. Worse still, as reported last week, job gains at startup firms, which are major sources of new employment and technological innovation, are at their lowest level in 20 years.

I added the bold to the sentence in the quoted portion of the article.

State of the Jobs Recovery -- What Recovery?

Any time a new Bureau of Labor Statistics (BLS) report comes out with a positive number of people hired, Democrat Socialists cheer and proclaim Obama a wise and great socialist leader.  Let us put some perspective on the current state of employment in the USA:

The percentage of the population 16 and over employed according to the BLS is:

Yes, the average slope from the bottom of the recession unemployment well is positive.  But the extent of the recovery is still, after 8 years, very small.  Years ago, without very detrimental federal government policies, we would have recovered to the point of returning to employment rates close to those established in the 2004 through 2006 period.  The employment rate is now more than 4% lower than in late 2006 and more than 3% lower than early 2004.  But the never-to-be-detered Progressive Elitist only sees the data from the bottom of the dip in October 2013 to the small peak in November 2014 and attributes that increase in employment to their man Obama.

A sane man asks, "What change of Obama's policies do they imagine might have caused about a 1% improvement over that one year period?"  I do not see that he has accomplished anything that would help the economy, except having lost Democrat control of the House of Representatives in the 2010 election and then for most of this year looking as though he was going to lose control of the Senate in the 2014 election as well.  The looming loss and then the loss itself of the Democrat Socialist Senate surely did something positive to fuel the increasing optimism of the many small businessmen polled by the NFIB.

Let us look at the BLS data on the Labor Participation Rate for those 16 and older:

It sure is hard to find any good news here.  The labor participation rate is doing nothing but going downhill.

Let us look at the full-time employment rate and the under-employed rates for Americans 18 and over according to Gallup:

Payroll to population percentage counts those who are employed at least 30 hours a week.  Gallup uses the entire population, not just that part of a certain working age range population to calculate the percentage.  The 30 hour or more percentage has remained remarkably flat from the depths of the employment recession in 2010.  The percentage of people underemployed includes those who are part-time or unemployed.  These are all people who want to and can work more.  These underemployed people have been decreasing somewhat, but since the percentage with full-time employment has not increased, this means that more and more of them have simply dropped out of the labor force, consistent with the Labor Force Participation graph of the BLS shown above.  Their numbers are decreasing only because they are losing their desire to work.

People lose their desire to work when they see no hope for a decent job.  They lose their desire to work when they see that being on welfare provides them with more benefits than working does.  This removal of Americans from the working force is the one and only accomplishment of Obama.  It works for him and the many Progressive Elitists who want more and more people dependent upon the mercies of Big Government for their survival and therefore eager to vote for more socialism.

Obama's Wealth Redistribution Takes It From Blacks and Hispanics

Never, ever assume that the proclaimed purpose of a Progressive Elitist is what he says it is.  Progressive elitists are thorough-going unprincipled pragmatists and they do whatever leads them to their desired results.  If it takes a lie to defraud others into giving them the power they want, they will not hesitate to lie.  A now classic example is the set of massive lies used to enact ObamaCare:

• If you like your health insurance plan you can keep it.
• If you like your doctor you can keep him.
• The cost of health insurance premiums for the average family will be reduced by $2500 a year.
• Most of the 47 million Americans said not to have health insurance will get it under ObamaCare.
• ObamaCare is not a tax.
• ObamaCare will cause few Americans to lose their jobs.

So, why would anyone believe that when Obama said his purpose was to redistribute wealth from the rich to the poor, that would be the result of his policies?  Well, some people are just that naive and that blind to the evidence of history.  Let us examine the evidence of the recent past.

Every three years the Federal Reserve publishes the Survey of Consumer Finances.  The Pew Research Center has produced a very useful summary of the results addressing the differences in household net worth for non-Hispanic blacks, Hispanics, and non-Hispanic white Americans.  Despite years of claims of "economic recovery" under Obama, the median net worth of all households was lower in 2013 than in 2010 and much lower than in 2007.  The median household wealth of 2007 was $135,700 in 2013 dollars.  In 2010, it had fallen to a mere $82,300, before falling further in 2013 to $81,400.  Median household wealth in the USA in 2013 had "recovered" to 60.0% of the median wealth of 2007!

But from 2010 to 2013, non-Hispanic white household income improved a minuscule 2.4%.  This is essentially stagnation in terms of normal wealth growth, let alone the growth characteristic of most economic recoveries.  This is a horror story by itself.

The worst horror story is that of American non-Hispanic blacks.  In 2010, black median household wealth was only 86.5% of what it had been in 2007.  So in 2010, blacks had lost 13.5% of their median household wealth compared to the 28.0% lost by whites.  But then instead of stagnation from 2010 to 2013, black median household wealth dropped precipitously to 57.3% of their 2007 wealth!  So under those much bally-hoed years of the Obama "recovery", non-Hispanic black median household wealth fell a further 33.7%, after the earlier three-year fall of 13.5%.  Black Americans lost more under Obama's "recovery" than they did in the early stages of the Great Socialist Recession!

By 2010, Hispanic American median household wealth fell to 67.8% of their 2007 wealth in 2013 dollars.  This loss of 32.2% was even worse than the 28.0% loss of non-Hispanic white households.  Once again, Hispanic Americans had further losses of household wealth during the Obama "recovery".  In 2013, median Hispanic household wealth was 58.1% of that of 2007 for a total loss of 41.9%, and an additional loss between 2010 and 2013 of 14.4%.

The period of time from 2007 to 2013 was a disaster for most American households.  White median household wealth fell from $192,500 to $141,900.  Hispanic wealth fell from $23,600 to $13,700, making their reserves razor thin.  Black household wealth fell from a median of $19,200 to $11,000.  Both the median black and Hispanic households now have almost negligible wealth. This means they have almost no protection against further economic shocks and almost no reserves for retirement.  Even before the Great Socialist Recession they were ill-prepared for either.

Obama's anti-business and anti-growth policies of higher business taxes, much increased and expensive regulations, ObamaCare, and an alarmist carbon-based fuel vendetta, have hurt the black and Hispanic Americans the most.  Their households were the least well-provisioned to survive these economic shocks to the private sector that madman Obama so much relishes delivering.  When Big Government takes resources away from the private sector where they are put to productive use and redistributes them to political uses, it is the poor and the least skilled and educated who are hurt the most.  Those who benefit are the politically connected and the poor are not usually well-connected.  They do not have the money to entice politicians and they are the least likely to devote the time or even to have the time for the study of the Byzantine workings of Big Government.

The miracle of wealth generation is well-known.  It is Capitalism with its emphasis on mutual cooperation and competition in the private sector that generates wealth.  Big Government is a very efficient consumer of wealth.  It takes wealth by force and destroys it in huge gulps.  Obama has proven that he is a particularly Big, Greedy Gulper of Wealth.  Where does that wealth come from?  It comes from American households.  The more government uses for political purposes, the less wealth American households have to pursue their own dreams and happiness.

Such are the consequences of allowing a Great Socialist Leader the power to redistribute wealth.  The story is always the same.  The socialist redistribution of wealth always reduces the total wealth of the society and it reduces that of most of the people of such a society.  A few politically well-connected people prosper, as we have seen with Obama's crony mercantilist friends.

Curious it is that mercantilism is usually described as the nature of the politically connected economies under monarchies and the accumulation of aristocrats hundreds of years ago.  It was the economic system before Capitalism.  It was the economic system of Medieval times.  Mercantilism, with its effective aristocracy of the politically well-connected is the economic system that Obama and the Progressive Elitists have turned America toward in their Transformation of America.  Theirs is a profoundly retrograde viewpoint that takes us back to the Divine Right of Kings, now the Divine Right of the Politically-Connected Progressive Elitist Aristocracy.  As in the feudal system, most of the people are not politically-connected.  Most of the people are made poorer and dependent on those who are politically connected.  Most of the people know almost nothing about what is going on in the government and have no effective control over its actions.

A vigorous and little-controlled private sector creates great wealth.  It may not produce it equally for everyone, but it does produce wealth for almost everyone.  Feudalism in its socialist or Progressive garb, destroys wealth for almost everyone.  When only partially implemented, it may only reduce the rate at which the people can acquire wealth.  When implemented as far as Obama and his Progressive Elitist allies have implemented it, it actually destroys wealth.  We see that in the reduced median household wealth figures above.

Yet, only a fraction of the implementation of wealth redistribution and socialist policies of the Progressive Elitists has been put in place.  There is much, much more wealth destruction that their policies are capable of doing.  Those who understand this should understand that a principled reduction of government powers and their scope of implementation is necessary.  We ought to return government to its legitimate purpose of protecting the equal, sovereign rights of the individual to life, liberty, property, the ownership of their own minds, bodies, and labor, and to the pursuit of their own happiness.

ObamaCare's False Boast: It has significantly lowered the number of uninsured

It has become common to see supporters of ObamaCare, artfully and deceitfully called the Patient Protection and Affordable Care Act, claim that it has decreased the numbers of the uninsured from the 17.4% of Americans in 2010 when it was signed into law to the present 13.4%.

Of course the main factor affecting the percentage with health insurance is affordability.  It happens that in 2012 real dollars, 2010 was the minimum in household income for the upper limit of the lowest, the next lowest, and the middle quintiles of household income due to the Great Socialist Recession.  Even the fourth and next to the highest quintile upper limit was almost as low in that year in its worst year of 2009.  So of course one of the ways households hard-pressed due to the loss of income due to the Great Socialist Recession got by was by dropping their health insurance, especially assuming everyone in the household was in good health.

It makes more sense to compare the percentage of uninsured under ObamaCare now to the number before the Great Socialist Recession had its great depressing effect on household income.  In 2008, only 14.4% of Americans were uninsured for medical care.  That year was the maximum income year for all four lowest quintiles before the Great Socialist Recession depressed earnings, with the exception of the second quintile whose upper limit income maximized in 2007, but at a figure only $100 greater than that of 2008.  So, the great success of ObamaCare is really a 1.0% drop in the percentage of uninsured, not the 3.0% claimed by some of its advocates.

The proponents of ObamaCare want us to assume that all of that 1% is due to poor Americans obtaining insurance coverage either through Medicaid or as a result of federal government subsidy for their medical insurance coverage.  The fact that studies have shown no health advantage in being covered by Medicaid is unacknowledged by ObamaCare supporters.  The fact that more than half of the government subsidies are based on an IRS ruling that clearly violates the ObamaCare law and has been judged such by the DC Federal Court of Appeals is also ignored.

Another factor is ignored as well.  Many American households are wealthy enough to have been self-insured.  Few people understand how many are so wealthy and few people recognize that their decision to be self-insured was often a rational one, especially if members of the household were of generally good health.  Since good health is a useful attribute in achieving high incomes and in accumulating wealth, it is likely that the wealthier Americans are also commonly the healthier Americans.  Yet, the tax penalties of ObamaCare will have forced many such wealthy households to stop being self-insured, which is registered as uninsured.  Many such households had to purchase ObamaCare mandated medical insurance.  The movement of these wealthy households to being insured, is a part of the mere 1% decrease in the number of Americans uninsured.

So, how many American households might reasonably have been uninsured before the onset of ObamaCare?  In 2012, the top 5% of household income earnings exceeded $191,156 a year.  With such an income, one can easily afford the doctor's bills a relatively healthy family might incur.  But there is more.  In 2012, the total net household wealth was $80.66 trillion.  This is an average of about $659,000 per household.  Of course the median household wealth was much lower at about $120,000, actually a 2011 figure.

I do not have the wealth distribution figures for 2012, but those for 2007 are available.  Assuming about the same percentages of wealth in the wealthiest 1% and then the next wealthiest 4%, the average wealth for these groups of households in 2012 is:

Wealthiest 1%, $22,790,000 per household.

Next Wealthiest 4%, $4,495,000 per household.

So, any of these wealthiest 5% of households might well have chosen to be uninsured prior to ObamaCare.  Now, they are most likely better off being insured.  So it is clear that there is great potential for all of the 1% decrease in the uninsured since 2008 being people from the wealthiest and highest income households.

This may not be case, but until there is a complete and validated breakdown of the health care insured by income and wealth, we should not assume that the 1% decrease in the uninsured is the result of poor and maybe middle income people rushing into ObamaCare.  In addition, with the assurance of health insurance under ObamaCare for those with severe health problems, some wealthy and high income people are undoubtedly also saving money by putting unhealthy family members under ObamaCare's lower age-pooled rates.

Given the very small decrease of 1% in the uninsured since 2008 and the claims that large numbers of people have been signed up on Medicaid, it is clear that many of the people who had insurance in 2008 do not have it now.  This suggests strongly that a larger fraction of the middle income groups do not have health insurance now than did in 2008.  This is an expected effect of the large increase in the cost of insurance premiums brought on by ObamaCare for those who qualify for little or no subsidy.  It is also an expected result given the decrease in full-time employment since then due to this never-ending Great Socialist Recession.

The Obama Jobs "Recovery"

Let us update the extent of the Obama jobs "recovery."  The most important datum informing us of the health of the economy to provide Americans a means to earn a living is the employment to population ratio.  When many people work, the economy is more likely to hum along fine and operate to raise our standard of living.  When fewer people work, there are more demands for high government extractions of wealth from the productive private sector, the standard of living stagnates or worse, and the people become more dependent upon the Big Government parasite.  So here is the non-seasonally adjusted data on the employment to population percentage according to the Bureau of Labor Statistics:

The fraction of the American non-institutionalized population over 16 which is employed has risen somewhat through April 2014 from a downward drop in the latter half of 2013.  However, this all-critical employment to population ratio is still well below the already very low ratio when he first took the oath of office of the presidency in January 2009.  More critically for Americans, the usual pattern of a recovery from recession within a couple of years to return to a similar employment to population ratio as that prior to the recession is in no way evident.  It is far more accurate to call this employment stagnation in the depths of a never-ending depression than to call this a recovery.

Yet many are shouting harrahs because the so-called unemployment rate dropped in April, even as 800,000 people left the workforce.  Many Americans are in the depth of despair at finding a decent job.  The reports are that most of the jobs that were created in April were relatively low-paying and unskilled jobs.  This is hardly surprising to me given the assertively anti-private sector policies of the Obama Oligarchy Gang of his dictatorial, individual rights trampling, Constitution ignoring, anti-energy, anti-business, micromanaging, lawless, and self-ownership denying regime.  In such a chaotic environment, the private sector does not invest in new business ventures and does not hire.  Obama's claims that money spent by government, which it removes from the private sector, is an investment has been tested many times throughout history.  That experiment always fails to back the statist theory and has failed once again under the Obama Regime.

This remains the never-ending Great Socialist Recession.  Although, given its duration and the degree of human misery it has caused, it is becoming more and more nearly correct to upgrade this condition to the Great Socialist Depression of the 21st Century.  The low employment, the huge transfer of wealth from the private to the government sector, the lawlessness of the government, and the rate of implementation of new socialist programs is very akin to the Great Depression of the 20th Century.  This is what you get when you put government in the hands of the Progressive Elitists.  For all their pretense to know better than most Americans how their lives should by micro-managed by this Progressive Elitist clique, they always manage to mess our society up royally.

We Americans do much better when we insist on controlling our own lives and living them in accordance with our self-chosen values.  Our standard of living is highly dependent upon our rejection of the Progressive Elitist claim that we did not make that.  It is each of us as an individual who must make our own lives and must honor and protect the right of every other individual to do the same.  We must fight off the usurpation of power over our lives by a power-lusting Progressive Elitist cabal.  That cabal refuses to recognize our highly individualistic natures, rich in complexity and highly differentiated.  It refuses to recognize our self-ownership as ObamaCare especially makes clear.  It refuses to recognize our ability to use reason to improve our own lives while exercising our individual rights to life, liberty, property, and the pursuit of our own happiness.  As the Declaration of Independence asserts the protection of such broad individual rights as the sole legitimate justification for a highly limited government and thereby defines the American Principle, the Progressive Elitist movement is profoundly anti-American.

Either - Or: Big Government or Children

Big Government is often partly justified as necessary to provide services to children, but rarely do people think about the effect that Big Government has on whether people decide to have and raise children at all.  The USDA estimated in 2013 that a child born in 2011 to a US couple with a middle income will cost the parents $241,080 to raise to the age of 18.  This does not even include any costs for a college education or a failure to launch with 36% of 18 -31 year olds living in their parents homes in 2012.  Both of those costs have been increasing rapidly in recent years, while the median inflation-adjusted family income has fallen by $4,000 a year since 2000.

Now, we know that fertility rates are sensitive to a couples' economic security and their available resources.  Fertility rates dropped sharply in the US during the Great Depression.  Fertility rates dropped due to the back to back 1958 and 1960-1961 recessions.  They dropped substantially during the economic malaise of the late Nixon, the Ford, and the Carter years.  The fertility rate has dropped since 2008 as well.  We know that recent efforts of France and Sweden to decrease the cost of raising children have resulted in an increase in the fertility rates.  In December 2011, the Pew Research Center found that 22% of 18 -34 year olds said they were delaying having children for economic reasons.

So what do you think the effect of the great increase in government spending relative to the size of the economy has been on the fertility rate given that the increased spending came at the expense of transferring wealth from the private sector that pays child-raising expenses to the government sector?  The plot of the sum of federal, state, and local government spending from 1950 to 2013 as a percentage of the Gross Domestic Product (GDP) is shown below:

In 1950, the birthrate per 1000 people was 24.1, in 1970 it was 18.4/1000 people, in 1990 it was 16.7/ 1000 people, and in 2009 it was 13.8/1000 Americans.  Total government spending in 1970 was much higher than in 1950, then again increased greatly by 1990 and still more in 2009.  The fertility rate fell substantially with each of those jumps in total government spending.  Now, I am not claiming this is the only effect on fertility rates, but it is a very logical one and the evidence is that it is a substantial effect.

But, the median household income in 2012 according to the Bureau of the Census was $51,371 a year.  At a 38% total tax on this income, the governments are taking $351,378 from this household over the course of 18 years.  To be sure, the family with the median income is paying less in taxes than the average tax rate, but this is probably made up by increased costs they pay for goods and services as tax costs are transferred to them and inflation caused by the government deficits over the years.  Supporting Big Government is the equivalent of raising about 1.5 children for 18 years.  This has to affect the calculation on how many children to have.

Big Government also saps the ability of the private sector to increase worker productivity by reducing private investment in productive equipment, new facilities, and worker training.  It reduces the number of new start-up companies.  The result is an economy which instead of growing in real per capita terms of 4% per year, stagnates to zero growth in real per capita terms as we have seen for the last 5 years.  The governments largely caused the recession and have kept the private sector from growing us out of the recession.  It helps tremendously when a married couple can have confidence that their income will exceed an average per capita increase of 4% compounded over 20 years as they add their own increasing experience and skills by the time the child they might choose to have is in the middle of his college education.  It is much, much easier to undertake having a child with economic growth than if there is no growth due to government-induced stagnation.

In 2012, the average American woman was giving birth to 1.88 children in her lifetime.  This is well below the replacement rate of 2.1 children per woman.  This means that minus immigration into the US, the population would be decreasing over the long run at this birthrate.  That means a lowered number of future productive workers in the US and an increasing number of retired people and people on major entitlements per worker in the US.  This means very wrenching problems of sustainability for the many Big Government entitlement programs.

It also means that many people who otherwise would be enjoying raising children cannot do so because so much of their income is being diverted to Big Government.  That impact on families is not spread evenly across the country.  Couples earning more than $105,360 in the urban northeastern US will spend $446,100 per child.  This is also an area of the country with a particularly high cost of state and local governments.  Imagine the effect on the decision whether to have children or not?  On the other hand, families earning less than $61,590 per year in rural areas will spend less than $143,160 on the first 18 years of raising a child.  These rural areas usually have a lower tax expense.  All of these factors make for interesting calculations on whether to become parents.

Anna and I raised three children and sent one to college for 4.5 years, one to college for 4 years, and one to college for 1.5 years, while living in the Northeast.  It was a hugely expensive proposition which many people will not attempt.

Though many Malthusians are very happy to see low birthrates, the rising population of the world has been consistently combined with an increased standard of living around the world.  The USA is a particularly sparsely settled land, most of which has been reverting to wild lands as our agricultural prowess has increased so that less land was needed for farmland.  The foolish government mandate requiring ethanol additions to gasoline has recently interfered with that trend toward using less and less land for farming.  Of course, the trend of less and less land for food production has continued.  The innovations of the developed countries have also led to fewer and fewer problems with polluted air and water.  What we are losing with low birthrates is many keen, productive minds which would otherwise enrich our lives and advance civilization.

The Clueless Federal Reserve in 2008

A meeting of the Federal Open Market Committee of the Federal Reserve on 29 - 30 January 2008 two months after the Great Socialist Recession began in early December 2007 was pretty sure that

• The USA would avoid recession.
• Export growth in 2008 and 2009 would be at a rate of 7.25% both years.
• Reductions in the Federal Reserve interest rates would return full employment by 2010.

This group that included Bernanke, Geithner, Yellen, and many other top Federal Reserve leaders was perfectly clueless.  As we all know, the USA not only did not avoid recession, that recession was two months old at that time and would continue even by the government's self-aggrandizing determination through June 2009.

US exports decreased sharply in 2008 and at the end of 2009 they were still below 2007 levels.  Finally, despite drastic cuts to essentially zero in the Federal Reserve interest rate, we have not come close to a recovery to full employment as of January 2014, let alone by 2010.

Federal regulatory agencies and commissions rarely do know what they are doing.  This clueless state is the general state of the Government bureaucracy and of the independent organizations it sets up.

Still No Jobs Recovery in the Great Socialist Recession

The January 2014 jobs report is out from the BLS.  Ignoring the unemployment rate, which is meaningless given the many people who have given up on finding a job in this never-ending Great Socialist Recession, the number to focus on is the employment to population ratio.  Let us examine the history of the employment to population ratio for Januaries going back to January 2007, before the sharp increase in energy prices and the subsequent financial failures.

Note that the lowest employment to population percentage was 57.6% in January 2011, prior to which our government was telling us that the employment situation was well into recovery from the recession which they had declared over much earlier than that in June 2009.  Now, in January 2014, the employment percentage is a miserly 58.1% according to the BLS.  In fact, it is really 58.0% on the same basis that the earlier employment numbers are given.  In March 2013, the BLS recategorized some workers who work in the home from the farm sector to the non-farm sector.  That re-categorization caused an artificial increase in the employment to population ratio, giving the government a desperately needed apparent increase in jobs.

So let us examine how far the jobs recovery has occurred in this never-ending recession.  The present 58.0% is an employment to population ratio which is only 0.4% higher than that of the worst January of the entire recession.  Since the drop in the employment ratio from January 2007 prior to the recession to January 2011 at the depth of the jobs recession was 5.0%, the extent of a jobs recovery is

0.4% / 5.0% = 0.08.

According to the National Bureau of Economic Research, the recession began in December 2007 and ended in June 2009.  In the 4.5 years since the government says the recession ended, the jobs recovery has managed only to recover 0.08 of the lost employment to population ratio.  This is pathetic.  It is a terrible misrepresentation to say we are in a jobs recovery.  We are in a deep jobs depression and for all intents and purposes the jobs situation has been stuck in a deep pit.  Perhaps a pit with a slightly sloping bottom, but so what!  Those who claim an 8% jobs recovery over four and a half years is a recovery should be scorned.  They should be laughed out of town.

The Progressive Elitists surrounding Obama and backing his anti-business policies look down upon most Americans as people who are unable to choose their own values and manage their own lives without strong controls placed on them by these same Progressive Elitists.  They are sure they know better than most of us Americans how to manage the economy and all aspects of our need to earn a living.  They hold us in scorn and look down on us in the worst possible way.  Some of them even think the recession and such problems as high energy prices are a good thing, because of their exaggerated belief that mankind's standard of living comes at the expense of the environment.

Most of us are prepared to have the results of our work judged by those we work with, work for, sell to, and compete with.  Let us hold them to a standard that measures them by the results they achieve.  If they tout their success with a 8% jobs recovery and expect us to ignore the 92% of the recovery denied to us and the private sector due to their interference, we should turn the scorn table on them.  We must evaluate them as catastrophic failures in governance.  We must see that big government cannot produce jobs as they claimed it could.  We must see the government must get out of the way or it will keep us from creating the jobs we have proven over and over that we can create for ourselves.

The Progressive Elitists and Obama keep saying "We did not build that."  Well, we used to and we will again, if only we will get them out of our way.  Throw the Bums Out!