Biden Promises to Destroy Fossil Fuels Industries in 4-year Transition Period Ending in 2025

Many people will say that he said no such thing. Literally, he did not say this. However, rational individuals will see that this four-year transition period is the implication of the things he said, but would never have the courage to say explicitly. 

What did he explicitly say? Let us list his key statements:

"I would transition away from the oil industry, yes."

"It has to be replaced by renewable energy over time, over time."

"I'd stop giving to the oil industry, I'd stop giving them federal subsidies."

"We need other industries to transition to get to ultimately a complete zero emissions by 2025."

"The point is, look, we have to move toward a net-zero emissions.  The first place to do that by the year 2035 is in energy production, by 2050 totally."

Biden's energy plan does not literally call for shutting down the entire oil and gas and coal industries by 2025.  It calls for zero-emissions with a fantasy that one will develop a huge industry that will remove carbon dioxide from the atmosphere.  The cost of actually sucking carbon dioxide, plant food, from the atmosphere will be gigantic.  It will have a huge negative impact on farming as well.  The materials that will hold the carbon dioxide will have to be mined at great cost, or great caverns will have to be created to hold the removed carbon dioxide.  The sequestration of carbon dioxide will have major environmental costs itself.

How will the otherworldly costs of carbon dioxide removal from the atmosphere be borne?  If it is to be borne by the American taxpayer, that would be a subsidy to the oil, gas, and coal industries, in the left's viewpoint.  Since Biden pledges no subsidies to the oil, gas, and coal industries, they will have to pay the incredible costs for the removal of carbon dioxide from the atmosphere.  This will cause the costs of oil, gas, and coal to skyrocket.  Skyrocketing costs means much lower usage of oil, gas, and coal.  This means many, many oil, gas, and coal workers will become unemployed.  It means that many people who transport oil, gas, coal, and products made from them will become unemployed.  Those towns and cities which presently support these industries will have massive unemployment.  As West Virginia has suffered greatly from the travails of coal under prohibitive governmental mandated expenses, so will many other areas be devastated.  Western Pennsylvania, eastern and southern Ohio, North Dakota, Wyoming, Oklahoma, Texas, and Louisiana will be very hard hit.

All of this is to happen in a crash manner by 2025, according to what Biden said in the debate.  Some say he was confused and meant to say by 2035, the date he gave for zero-emissions in energy production.  Maybe he was confused and careless.  Maybe the differing dates are because the huge changes in energy production to create tens of thousands of wind generators, huge photovoltaic farms, bank after bank of batteries, and the means to remove carbon dioxide from the atmosphere in massive quantities will cause the generation of a huge load of carbon dioxide into the atmosphere.  Making cement blocks huge enough to anchor those wind generators releases huge amounts of carbon dioxide into the atmosphere, for instance.  Mining the materials for huge, sweeping banks of batteries, for the materials to make wind generators, and to make photovoltaic farms requires an incredible amount of energy use.  So, maybe Biden is saying the oil, gas, and coal industries must be zero-emissions by 2025, but the totally changed energy industry as a whole will not have to be zero-emissions until 2035.  That would make sense, if the U.S. economy could survive such wrenching changes in a 14 year period.  But it cannot do so.  Trump is right that this would cause our economy to falter badly.  We would be in for a never-ending depression.

Stop and think about the consequences of skyrocketing energy costs.  All of our transportation costs will go up greatly.  Manufacturing operations require considerable energy and they require that it be dependable.  A power outage can destroy all of the materials or products in a production process at the time of power failure.  A laboratory, such as mine, can lose many hours of time when an analysis process is stopped in mid-stream and a unique sample is destroyed.  The cost of virtually every product must go up as its production cost goes up and the transportation cost to get it to the customer goes up.  One of the reasons Americans have higher incomes than the vast majority of people around the world is because we have a lower cost of energy and a more dependable supply of energy than almost any other country.  Under Biden's energy plan, manufacturers will have no choice but to move many manufacturing and support jobs out of the U.S.  That situation will be even worse than it was under the Obama/Biden administration.  When manufacturing goes overseas, the support technology also goes overseas.  Engineering and science jobs in support of manufacturing disappear, along with the knowledge to make things.  The U.S. will lose the knowledge that has given us the very superior standard of living we have.

As I have shown in many posts on this blog, the catastrophic man-made global warming hypothesis has been proven to be wrong.  The Earth energy budgets that summarize the understanding of the so-called consensus violate physics.  The climate models based on their wrong ideas of physics, keep making wrong predictions about the temperatures in the atmosphere and about future temperatures.  Of course they do, because they do not understand the physics of thermal radiation, convection in air, and they even violate energy conservation.  Even if one does not understand the physics, as very few people do, the scientific method says the hypothesis is wrong because the model predictions have been wrong.

Of course the insanity of the Biden energy plan does not stand alone among his insane policy ideas.  Biden will hit the American economy with a slew of new regulations with a massive expansion of the Swamp Creature regulatory state.  Regulations are a huge expense burden on business already.  Small businesses cannot even know what the regulations are because they do not have the means to monitor the avalanche of new regulations and interpretations of regulations that occur each year.  Businesses that want to make large investments are afraid to do so, because the new operations they want to create may take years to be in place (in large part due to regulations) and then take years to make back their initial investment.  What arbitrary, irrationally expensive regulations relative to any benefits will come down the pike and wipe out their investment?  Politicians rarely think about the consequences of their actions, except as far as the next election at most.  A lifetime politician like Biden is not even capable of thinking about the destructive nature of his ideas.  The actions President Trump has taken to moderate the burdens of federal regulations are a much under-esteemed effect of his administration.

Another idiot's delight is a national minimum wage of $15 an hour, which was backed by Biden in the debate and has widespread support in the Democratic Party.  As I have previously written on this blog, the cost of living in the U.S. varies hugely across the country.  A business in NYC or one in San Francisco is much more likely to be able to justify paying an employee $15 an hour than is a small business in Okmulgee, Oklahoma or Arco, Idaho or Rising Sun, Mississippi.  The $15/hour Biden plan is a way to depopulate rural America and to force everyone into huge metropolitan areas where the cost of living is much higher, but one can also often earn more money.  Unfortunately, this actually tends to result in a real lowering of the standard of living of many people, especially the very poorer people that the $15/hour proposal pretends to help.  The resident of NYC with a mean income earns less real income than does the mean income earning American when you correct for the higher cost of living!  For a person of mean income, moving from Oklahoma to NYC actually lowers your standard of living, despite the fact you will likely be paid more.

President Trump understands the basic principles that allow our economy to flourish and that allow Americans to enjoy an increasing standard of living.  Joe Biden does not.

Concern for Socialist Dictator Maduro of Venezuela is an Indicator of the True Intentions of Democrat Socialists in the USA

The Venezuelan National Assembly was duly elected, while the embattled dictator Nicolas Maduro was the winner of a "sham election under absurdly rigged conditions" according to Democrat Senator Dick Durbin, though he himself is hardly a supporter of the many and broad rights of the individual.  The National Assembly of Venezuela appointed Juan Guaido its interim president, which it is empowered to do by the Constitution of Venezuela.  According to many American Democrat Socialists, the U.S. anointed Juan Guaido and has no business meddling in Venezuelan affairs, though what the U.S. actually did was to recognize the constitutionally appointed President of Venezuela.  Meanwhile, Maduro uses the military to murder and imprison any opposition as he drives more and more Venezuelans into unemployment and ever starvation.

Venezuela was among the richest nations in the world a couple of decades ago.  Venezuela began a bad downward trend after the election of Hugo Chavez in December 1998.  The CIA World Fact Book estimated the loss of GDP in 2015 at 6.2%, in 2016 at 16.5%, and in 2017 at 14%.  The World Bank estimated the GDP loss in 2017 at 14.5% and estimates that the 2018 loss of GDP will be 18%.  The CIA World Fact Book says that the per capita GDP in PPP terms in 2015 was $17, 300, which fell to $12,500 in 2017.  The unemployment rate in 2017 was 27.1%.  The 2017 consumer price inflation rate was 1090% and it is worse now.

The brutality of the Maduro regime and the catastrophic economic deterioration of the country do not put a dent in the international solidarity of American Democratic Socialists and like-thinking nations around the world.  Russia, China, Iran, Cuba, Turkey, Nicaragua, and Hezbollah all support the Maduro regime.  American socialist Bernie Sanders says the U.S. must not support a coup against Maduro, though he has usurped the Presidency of Venezuela and thanks to the National Assembly is no longer the President of Venezuela.  The people are rioting against his dictatorial regime in the streets, but their opposition to his regime is not to be supported by the U.S. if Sanders gets his wishes.  Meanwhile, Maduro continues on with the support of Cuban intelligence, Cuban troops, and Putin's private army of mercenaries backing him up.  Protestors are shot in the streets.  Bernie, the coup has already occurred and it is being led by Maduro and his Cuban and Russian allies.

California Democat Ro Khanna and the socialist pop star Rep. Alexandria Ocasio-Cortez are among the many American socialist critics of an "American Coup."  The Maduro - Cuban - Russian Coup is of no real concern to them.  After all, socialism is to be supported by the faithful no matter what hardships it entails.  So many American socialists had no problem with Stalin starving 6 or 7 million Ukrainians to death.  They had no problem with Chairman Mao starving and killing about 60 million Chinese.  Socialism at any cost!

As is usually the case, a religion has no problem killing massive numbers of people to achieve its ends.  The god of the Israelites killed all of the people of Jericho, Sodom, and Gomorrah.  The Catholic Church under Pope Innocent III called for a crusade in 1209 against the heretic Catharists who had become prevalent in southern France, then the most wealthy part of Europe.  This murderous crusade is estimated to have killed more than 1 million people before the end of the century according to Homer Smith in Man and His Gods.  Then there was 300 years of total devastation for vast regions of Europe as the Catholics and Protestants fought each other viciously for the soul of mankind in Europe.  The Christian churches also murdered many thousands of people for having sex with others of the same sex or for being witches.  Islam has a similar murderous reputation, which continues to this day.  So why balk at the murders and hardships needed to set the world on a socialist path?  It is as much a religion as these others.

Unless you have a shred or more of rationality in your character.  If you are capable of and value independent thinking, then the answer is clear.  Socialism is not for us.  It is to be fought as though your life depends upon it.  Your life does depend upon the defeat of socialism.  We have to win this battle against international and against American socialists, because if you are like me, they will kill you.  No brutality is too great for a religion like socialism.

The Obama Economic Growth Record

In the seven years 2009 - 2015 under Obama, the rate of real GDP growth has averaged 1.4% a year. It takes zero increase in productivity to increase the GDP at the rate of growth of the population. Over the six Obama years 2009 - 2014, the population of the USA has decreased from an initial high of 0.98% in 2009 to a 2015 rate of 0.77% as hope has died.  The average population rate over those six Obama years was 0.91%.  The real, per capita GDP growth rate is then about 1.4% - 0.9% = 0.5%. This real, per capita GDP rate is the rate that actually tells us how fast our standard of living is improving.  A 0.5% annual rate is pathetic and the result of a serious national malaise.

Hillary would continue down this sorry path.  That path is looking even worse so far this year.  The 1st quarter real GDP growth rate was just revised downward to 0.8%, while the second quarter rate was reported to be 1.2%.  Subtract the population growth rate to estimate the per capita real GDP growth rate and that rate so far this year is less than the 0.5% of the prior Obama years.  As is the case with Obama, Hillary knows nothing about economics or how to grow a business.  Nonetheless, many Americans will be voting for more of the same in a few months.

Obama is the only President between 1950 and the present to never achieve a 3% real GDP growth rate.  The suppression of high rates of growth following a deep recession is a very great feat, since such high rates are almost invariably the result of the corrections that occur in a recession.  Of course, the Obama administration frustrated many of those corrections in the Great Recession, wasted huge fortunes of money, and enacted extremely expensive and irrational laws and regulations to wreck havoc on the U.S. economy and its businesses.  See:

Let us examine a crucial consequence of adopting the Obama-Hillary new economic growth normal with a government taking huge chunks of the private sector economy under its dictates year after year.  Let us compare the resulting size estimates for real per capita GDP based on a 0.5% Democratic Party rate of growth and a number of rates of growth which could be achieved by more rational economic policies giving us lower tax rates, fewer regulations, no irrational laws, and no violations of the Rule of Law.  Most Americans can expect to live another 40 years.  So let us ask what the size of the economy in terms of the real per capita GDP will be 40 years from now should we forego big government controls for a free and robust private sector economy.

Growth rate of 0.5%, real, per capita GDP in 40 years is 1.22 times the present case on the Obama - Hillary course.

Growth rate of 2.0%, real, per capita GDP in 40 years is 2.21 times the present case, with economic policies marginally less irrational than those of Obama - Hillary.

Growth rate of 3.0%, real, per capita GDP in 40 years is 3.26 times the present case, with economic policies based on a modest level of rationality.

Growth rate of 4.0%, real, per capita GDP in 40 years is 4.80 times the present case with a free market economy.

If we measure the size of the real, per capita GDPs at higher growth rates as ratios to the Obama - Hillary new normal 40-year economy, the economy is much larger.

2.0% growth, the economy is 1.81 times larger.

3.0% growth, the economy is 2.67 times larger

4.0% growth, the economy is 3.93 times larger

Do we really love the big government directed economy of Obama - Hillary so much that we wish to forego an economy in 40 years which is 2, 3, or 4 times wealthier than it is now for one that is only 22% larger than it is now?  We are not just giving up several times more wealth, but we are also giving up all of the extra inventions, the extra funding for science, the extra funding for medical research and its clinical applications, the additional knowledge, the greater national security, improved housing and retirement, and the abundance of interesting and challenging jobs of such robust and diverse economies.  Does the big government model really offer anything to improve our standard of living that begins to compare to what we are giving up by adopting that model of human and economic controls?  It is absolutely inconceivable that the Obama - Hillary 0.5% real per capita GDP growth rate is the rational choice.

This is truly a case of checking out the claims of someone who is claiming to offer you something for nothing. There is clearly an alternative outcome one can choose and that outcome, consistent with liberty, is vastly superior for our personal security and our desire to flourish in life. The freebie is purchased most dearly.  One is reminded of Ayn Rand's frequent refrain that we should ask when offered a packaged deal, "Instead of what?"

If the Great Recession has Ended, Why Are Fewer Prime Working Age Men Employed?

We are constantly being told that the economy is getting better, albeit slowly.  I have pointed out many times that the employment participation rate has not improved throughout 2010, 2011, 2012, or 2013.  I have pointed out many times that the real, per capita GDP has not grown, though this is a far better measure of our real condition than the GDP or that fake real GDP according to the government.

Another of many indicators that there is no improvement is the terrible plight of employment among men of the prime working ages 25 -54 years old.  Unemployment among men of these ages has continued to climb at rates in excess of population growth since the government declared recession supposedly ended.

It sure is difficult for Obama and the government to call a spade a spade.  This is some recovery when 12% of men of the prime working ages are unemployed!

The Obama Economic Stagnation and Real American Growth

As government takes control over more and more of the wealth of the nation, the economy staggers.  Obama is the quintessential Big Government man who has no appreciation for the fact that our real standard of living is improved not by government, but by private sector enterprises.  But improving most Americans standard of living takes time, and today very many Americans seem to want to benefit from government redistributions that will immediately transfer the wealth created by a minority to a majority less able or willing to create that wealth.  This is a short-sighted aim even for the immediate beneficiary, since redistribution results in the total wealth of the society becoming smaller over time than it would otherwise become.  It is also generally the case that those who think they will benefit from the forced transfer of wealth will fall victim to exaggerated promises and condemn their own children to a much more bleak future.  Others believe that some under-performing or disadvantaged Americans will be better off if forced transfers of wealth occur, but do not think that many such people will be better off over a greater part of their lives if the whole American economy grows healthily than if it does not.

If you are a 30-year-old American today, you are probably going to work until you are 70 years old.  The size of the American economy in 40 years will have a big impact on the quality of your retirement, not to mention many of the years between now and then.  Let us suppose you actually want your children to live in an economy that offers a much higher standard of living than we have now.  The median American mother is now 31 years old, which means that barring changes in that, her children will be having their own children a median 31 years from now.  Let us consider the size of the American economy 31 years from now under various growth rates to see how this newly long generation of 31 years will affect the next generation of children.

Of course we are interested in using real GDP numbers, not the nominal numbers affected by games played upon the money supply.  Unfortunately, the actual numbers reported by the government for real GDP are not fully corrected for inflation, but we will assume future numbers will be truthful.  In addition, in terms of its impact on our standard of living, we must be aware that the U.S. population has been growing by about 1% a year.  Thus, a real GDP growth of 2.0 %, the rate of GDP increase under the last four years under Obama, is really only a real per capita GDP of 1.0 %.  Note also that when America had much less government, it was able to sustain long-term real growth rates of 5 and 6%.  The following plot shows how the real, per capita size of an economy will grow over a generation of 31 years assuming a continued population growth rate of 1% a year.

So, assuming that the 2.0% growth rate under Obama is continued for 31 years, as one expects given his anti-business policies, the real per capita GDP will only be 36.1% larger then than now.  How incredibly disappointing that will be!  On the other hand, were the government to shrink considerably, we might easily average a real GDP growth rate of 5% a year and the real per capita GDP would be 3.373 times its present size in 31 years.  The Obama economy is easy to imagine and little different than the present economy.  The small government per capita economy would be two full U.S. present economies larger than the Obama economy and such a robust and innovative economy is really very difficult to imagine.  But, such an economy will make almost every American much, much richer and much, much more secure than we are now.  Such an economy is worlds better than the Obama economy in terms of our standard of living.

Note that each additional percent of real GDP growth makes more and more difference to the future economy.  This curve has a strong upward bend, so any act of the government that makes it harder for businesses to grow takes a great deal away from our future.  If government regulations and new mandates by law make it harder for a company to even manage to match its last years income, we all pay for this in the long run.  And no, I am not talking about when we will be dead.  I am talking about long before recent college graduates will retire and the entire lives of their children.

One really needs to think about it when the EPA says that generating a bit more CO2 than they want us to will just conceivably cause a fraction of a degree higher temperature in 87 years so we should give up one or two percent of future GDP growth for this reason.  The damage of doing that to all of us is certainly much greater than any damage to the environment.  Indeed, I have shown over and over that the science used to make these claims is bad and the catastrophic man-made global warming hypothesis is simply wrong.

Or take the wild claims of the EPA that mercury produced by coal-fired power plants has significant health consequences, so we should pay higher electricity costs to replace those power plants with much more expensive and unreliable power plants with their own environmental problems.  This EPA ruling also has important consequences for the growth rates of our economy.

We need to remember that every new paperwork requirement put on businesses also takes resources that they could otherwise be using to improve their products and services or their marketing efforts in a world market.  Businesses suffer greatly from the thousands of little cuts that unthinking state and federal legislators and state and federal bureaucrats just love to make, of course while acting as though they are saving the average American from some harm.

In fact, most of this is pretense.  Almost every business wants to improve the lives of its customers.  That is how they make money.  At least the majority who have no special favors from government do.  Yes, there are some state-regulated monopolies who are less well-behaved and there are crony mercantile companies such as Obama's green energy companies who are simply trying to take advantage of us.  But, these are companies corrupted by Big Government and eliminating it will also eliminate companies that no longer care to bring in customers on a voluntary basis for each others mutual benefit.

Last Electoral College Result Prediction on Presidential Election

I believe the most likely outcome of the Presidential election will be:

Of the generally recognized swing states, the only one that I believe is foolish enough to vote for Obama is Nevada.  Nevada showed its perfidy by voting for Senator Harry Reid, who has refused to allow the Senate to obey the law and produce a budget ever since Obama occupied the White House.  Harry Reid is wily, but a very wrongheaded man.  The state that could send him over and over to the Senate has the good judgment of a Las Vegas labor union.  In other words, Nevada is too much like California now, with which state it shares both an astronomical unemployment rate and home foreclosure rate.  Sometimes, no oftentimes, the people of a given area suffer mass delusions.  I know, I live in the Baltimore - Washington corridor, where mass delusion reigns supreme.  I do think there is about a 40% chance that Nevada will vote for the much superior candidate, Romney.

There is about a 20% likelihood that one of the three states, Pennsylvania, Michigan, and Minnesota will vote for Romney.  I believe Romney will win the election with a differential in the percentage total vote of between 2 and 4%.  If I am wrong, I think a win by 5% is more likely than one by 1%.  A win by 5% will mean that Romney will likely carry at least two of the states Pennsylvania, Michigan, and Minnesota.  Both Pennsylvania and Michigan will be very hard hit by Obama's plans to shut down the coal-fired electric power plants and both will be hurt by his plans to discourage hydraulic fracturing to release shale oil and gas.

Most of the polls are underestimating the turnout of Republicans and those Independents who have had more than enough of Obama.  They are overestimating the turnout of Democrats.  This is even true of Rasmussen polls, which are among the best of the polls.  The fact that Romney has a normal Republican lead with men and Obama has much less than the normal Democrat lead with women figures very big in my understanding of how this election will turn out.  Another key factor is the fact that Independents are decidedly favoring Romney over Obama.  There will also be substantially more crossover Democrats voting for Romney than Republicans voting for Obama in this election.  These factors have to generally push all of the swing states, most of which are now mostly Republican at the state level, into the Romney column.  The work of the Tea Party Americans in ensuring this is also underestimated.  The Evangelicals have also become aroused.

Obama is left only with substantial majorities among young people, blacks, and Hispanic Americans.  Each of these groups has suffered just unbelievably high unemployment.  Falling incomes and rising prices, such as energy prices, have hit blacks and Hispanic Americans especially hard.  The fraction of young Americans who favor Obama is high, but usually these young Americans do not vote in large numbers.  We will see that many fewer of them will vote in this election than in 2008 and of those who vote, a very substantially larger fraction will vote Republican.  The turnout of black and Hispanic Americans will also be lower.  The decrease in the fraction who vote for Obama this time as compared to 2008 will be much smaller than that among the young, though it will be greater for Hispanics than blacks.

Now that Americans have had so much time to get to know Obama and to be angered so many times by his lies and deceptions, I am very disappointed that we are still in a situation in which nearly half of all Americans will vote for this con man and failed President.  How anyone could want four years of constant attacks on our individual rights and the resulting economic stagnation, is very much beyond my understanding.  Romney should have easily surpassed Obama with well over 300 electoral votes.  It appears more likely that there are too many very foolish Americans for that to happen.  At this point, it looks to me that Romney will get 295 electoral votes.

I will be heartened if Romney comes very close in Minnesota, my birth state, Michigan, and Pennsylvania, however.  Coupling that with wins in Iowa, Wisconsin, Indiana, and Ohio and the continued shift of the Midwest into the Republican column may be a good sign of things to come.  We have already seen these states send more Republicans to their state houses and to the House of Representatives.  They have been electing Republican governors as well.  The private sector unions have been losing power as they have lost membership.  More and more Mid-westerners are learning that if they are to have well-paying jobs, it is good that the governments not be anti-business.  As Mid-westerners show more respect for economic freedoms, they will align more with the more reality-interested Republican Party than with the socialist Democratic Party.  This re-alignment may take a couple more election cycles to be complete, but it sure is important to America's future freedom and prosperity.

Historically Slow Jobs Recovery Trucks On Due to Determined Industry

The usually quoted unemployment rate went up from 7.8% to 7.9%, but this always quoted number is fairly meaningless in a very long recession, nearly never-ending recession. The unemployment rate went up because a few more people decided there might be hope of finding a job, so they renewed their effort to find a job.

American industry forced the economy slowly forward in October 2012 despite the full application of brakes by Obama and his henchmen.  Industry added 973,000 jobs in October, perhaps in anticipation of a win by Romney on 6 November.  If it was not that, then there are a lot of lunatics in American business, but history suggests otherwise.  Government added 20,000 jobs, despite all of Obama's moaning that government has been hurt most by the recession.  Government had hired madly in September.

Unincorporated self-employment in non-agricultural jobs fell by 172,000.  The decrease in unincorporated self-employed is almost certainly further indication that the huge rise in unincorporated self-employment over the last couple of years was an act of desperation on the part of Americans who could not find jobs otherwise.  Any self-respecting American creates his own job when he cannot get a job from someone else.  But in a bad, Obama economy with no capital to invest in your business, being self-employed is really rough.  Now that industry is hiring, these suffering Americans are shifting to the better jobs bigger companies can offer them.

Let us examine the household survey employment numbers:

The number of missing jobs is falling at a very slow rate.  In October 2010, the percentage of missing jobs was 13.73% and this October is down to 12.53%, or 1.20% over two years.  This is
an average rate of missing jobs recovery by the economy as abused by Obama of 0.60% a year.  At this rate, it will take us more than 14 more years to lower the missing job rate back to the 4.04% rate of January 2000.  Obama's new normal economy is one that takes a total of 18 years to recover from a recession.  His braked economy is actually mired in a GREAT DEPRESSION, that being the only historical precedent for an 18 year recovery period in American history.

One of Obama's favorite campaign claims is that he has created, note the hubris, 5,000,000 jobs.  Once again, employers did not do it.  No, the government did.  At least if it was good.  If it was bad, then businessmen did it.  This is a matter of big government definition.

Actually, there are 144,039,000 employed Americans now and there were 143,338,000 million employed in George W. Bush's last full month as President in December 2008.  So, there are only 701,000 more Americans employed now than at the start of the Obama presidency. This is only 14% of Obama's claim, but as he says, he cannot do 7th grade math.

Meanwhile there are 8,948,000 more working age civilians available for work now than there were in Bush's last month.  The added 701,000 jobs distributed among the 8,948,000 new potential workers is enough to provide a job for 7.83% of them.  Pathetic.  That is an employment rate which is lower even than Obama's super-high unemployment rate overall is.  But this is the new Obama Normal.

An outline of my approach to reviving the economy

In mentioning that the Obama economy made it much more difficult for small businesses such as my materials analysis laboratory to continue to operate, a scientist with whom I had been corresponding about his analytical needs claimed that no one could do the job of reviving the economy better than Obama.  He then asked what I would do.  Here is my 13-point reply with minor embellishments:


1)  Kill ObamaUncaringTax, too nicely called ObamaCare.

2)  Kill the Dodd-Frank Too-Big-to-Fail Act which is stultifying the loan markets and setting up the next colossal financial bubble.

3)  Enforce the work requirement on government charity programs and begin rapidly phasing them out.  The private sector can pick up whatever programs it wants to.

4)  Stop the EPA's vendetta against the use of coal.  The mercury and other pollution arguments are greatly exaggerated and really mostly an excuse to act on the failed hypothesis that man's CO2 emissions are causing a catastrophic global warming.

5)  Recognizing that the catastrophic man-made global warming hypothesis is wrong, stop discouraging other fossil fuel use and freely allow the development of new sources of oil and gas. Open up leases on federal land and offshore for development.  End federal subsidies and mandates for green energy development. 

6) Kill the federal CAFE requirement for 54.5 mpg by 2025 or any other date.

7)  Authorize the building of the Keystone XL pipeline so the Gulf of Mexico refineries are fed plenty of Bakken shale oil and Albertan tar sands oil.

8)  Increase the retirement age for Social Security and the coverage age for Medicare.

9)  Eliminate the Dept. of Education, the Dept. of Energy, the Dept. of Housing and Urban Development, the Labor Dept., most of the functions of the Dept. of Health and Human Services, the Agriculture Dept., reduce the Dept. of the Interior, eliminate the Transportation Dept., and reduce the Dept. of Homeland Security.  Fold the legitimate functions of the Labor, Agriculture, and Transportation Departments into the Commerce Dept.  Eliminate corporate welfare programs in the Commerce Dept., as well as the labor union welfare programs now in the Labor Dept.  Kill the Davis-Bacon Act and federal requirements that union wages be paid on federal contracts.

10)  Convert the Medicare program into a defined benefits program so that Medicare patients care about how much they spend and will not allow overcharging.  All government fraud, waste, and abuse programs are a pretense and are only used selectively to occasionally prosecute someone who is not playing the game to the liking of the powers that be in government.

11)  Sell most of the federal lands with mineral rights and use payments to pay down the debt.  The main purpose of this is to see that the land will be used more productively.

12)  Convert the Social Security program over time from a Ponzi scheme to a tax-deferred personal investment program with the investment truly held by the investing individual.

13) Reduce tax revenues as drastic spending cuts are enacted and simplify the tax laws and codes.  Preferably move to consumption taxes as opposed to taxes that inhibit production.  Consumption taxes will eliminate almost all reporting of financial information to the government.  Eliminate Sarbanes-Oxley.  Government spending will be quickly reduced to 18% or less of GDP and then cuts will continue until it is no more than 10% of GDP.  The economy will grow by leaps and bounds as the cost of government is kept growing somewhere between the rate of population increase and the rate of GDP increase, but definitely significantly less than the rate of GDP increase.

That is the gist of my program to transform the American economy consistent with the American Principle of government limited to the protection of our equal, sovereign individual rights to life, liberty, property, the ownership of our minds, bodies, and labor, and the pursuit of happiness.  The key to the preservation of our rights is a rich and vibrant private sector where we are free to pursue our own values, to trade goods, services, and ideas, and to associate with others of our choice for the purposes of our choice.

There are many other reforms needed to fully protect all of the rights of the individual.  Some of these will have major economic implications as well.  For instance, all education should become private education.  It is not the business of the government to educate the people, since that would be an infringement of the rights of many and government has a very serious conflict-of-interest problem with respect to teaching about its legitimate functions, about ethical matters that must enter into issues affecting the freedom of conscience of the People, and about the history of failure of big government and the success of highly limited government.  Much more needs to be done to protect privacy, the freedom of movement, freedom of speech and the written word whether in press or on the Internet, freedom of assembly, freedom of association, freedom of contract, freedom of trade and the ownership of one's own labor and its fruits, the freedom to create a domestic partnership contract with any consenting adults of one's choice, and the freedom of property ownership, including that in one's mind and body.

How Could One Replace a $5 Trillion Tax Revenue Reduction Due to Reduced Tax Rates?

Obama claimed that one cannot replace a loss of revenue from taxes of $5 trillion due to a reduction of tax rates such as Romney plans simply by closing loopholes.  He is probably right, but what was not entirely adequately discussed is that Romney's understanding of the economy allows him to change many policies which will allow the economy to grow much more rapidly than it has or will in the future under Obama policies.

Democrats have a habit of making tax projections which ignore the benefit of growth.  But, it is absolutely a critical component of rational tax policy.  Tax revenues are a function of the tax rate, the amount the tax is applied to, and the frequency with which the tax rate is applied.  Lowering the tax rate will bring in less money on a given transaction amount each time the tax is collected.  However, lower rates allow greater growth of the economy, which means that the amount on which the tax is levied increases and the frequency of application in many cases also increases.  The interaction of these three factors affecting the tax revenue is not nearly as simple as the common consideration of only the tax rate.

It was not made clear in the debate, but all of the numbers on tax revenue were apparently based on the next ten years of tax revenue.  We have a $15 trillion GDP now.  Under Obama, whose policies presently are allowing a government-claimed growth rate of only 1.6% so far this year which does not adequately adjust for price increases due to an understated government adjustment for the Consumer Price Index.  The real real GDP growth is probably not even 1%, despite the fact that with a population growing at about 1% a year, a 1% growth rate in GDP is a give-me.

A combination of lower tax rates for business owners and for corporations will allow them to grow more and increase the GDP more.  Lowering the rate for corporations, which is the opposite of what Obama has done despite his claim he wants to reduce corporate taxes, will allow multi-national corporations to bring home many profits they have made outside the US.  Lower business tax rates will allow many companies to invest more in equipment, facilities, R&D, and training employees which will allow them to grow more rapidly.  Allowing a much greater freedom to realize our huge fossil fuel resources will add considerable growth to our economy.  Bringing down electricity costs by not forcing power companies to use expensive and unreliable wind, solar, and biomass energy will allow increased growth.  Eliminating the requirement to use ethanol in gasoline would save a great deal of money and allow that to go to growth.  Sensible relief from some of the excessive regulations of the EPA, the FDA, the SEC, the NRLB, and a host of other regulatory agencies will allow more growth.  Repealing ObamaUncaringTax and Dodd-Frank will allow greater growth of the economy.  The opportunities to improve GDP growth are many, but Obama has been and will continue to be on a stagnation path.

Let us look at the difference in the size of the economy over ten years at the Obama growth rate of 1% and at a reasonably attainable 4% growth rate which a President knowledgeable about the economy and business could manage.  Here is the economy or GDP in trillions of dollars at the Obama growth rate:

2012, $15.00 trillion
2013, $15.15
2014, $15.3015
2015, $15.454515
2016, $15.609060
2017, $15.765151
2018, $15.922802
2019, $16.082030
2020, $16.242851
2021, $16.405279
2022, $16.569332

The cumulative 10 years of GDP to be taxed from 2013 through 2022 is then $158.50252 trillion.  With a doable Romney growth rate of 4%, the growth of GDP looks like this:

2012, $15.00 trillion
2013, $15.60
2014, $16.224
2015, $16.87296
2016, $17.54788
2017, $18.249794
2018, $18.979785
2019, $19.738977
2020, $20.528536
2021, $21.349677
2022, $22.203664

The cumulative 10 years of GDP under the Romney growth rate of 4% is $187.29527 trillion.  This is a cumulative $28.79275 advantage in a dynamic, growth economy.  This is 1.9195 times our present GDP, from which the government has tax revenues of about $2.4686 trillion.  If Romney were to reduce the effective tax rate by 20%, then the tax take on $15 billion would be $1.9749 trillion.  So, the increased growth over 10 years at a 20% lower tax rate would add (1.9195)($1.9749 trillion) = $3.7908 trillion.  This is most of the $5 trillion that Obama says Romney cannot make up by eliminating deductions.  This does not even take into account the added tax revenues due to a higher frequency of application of some taxes.  So, ignoring that additional tax revenue, reductions in tax deductions over ten years only need to recover $1.2092 trillion.  That should be easy to do without changing the deductions of the middle class, as Romney claims he can do.

The difference in tax revenues for a healthy and growing economy compared to those of a stagnant economy such as we have now under Obama is huge.  Given the future liabilities of Medicare and Social Security, not to mention paying interest on the national debt at a higher interest rate than the historically low rates now being paid, this much higher rate of growth is critical.

Scott Rasmussen on the GOP

There is a very important difference between the GOP and the Democrat Socialist Party which Scott Rasmussen understands.  He notes that this difference is obscured by the politicians:

Establishment Republicans in Washington broadly share the Democrats' view that the government should manage the economy. They may favor a somewhat more pro-business set of policies than their Democratic colleagues, but they still act as if government policy is the starting point for all economic activity.

He observed that Democrat Party members are comfortable with the idea that Washington is the "starting point for all economic activity."  However, the membership of the Republican Party thinks very differently and therefore believes that its Washington leadership is wrongheaded with its comfort in control of the economy by Washington.  He says:

The GOP base sees government as a burden that weighs the private sector down rather than a tool that can generate growth if used properly. Ninety-six percent of Republican voters believe that the best thing the government can do to help the economy is to cut spending and free up more money for the private sector.

To the degree that Romney's plan for economic recovery involves the government getting off the back of businessmen, with lower taxes, fewer regulations, and more opportunities to develop our resources, the Democrats and the media mostly complain that this is no plan at all.  For them, all economic planning must involve a government action managed intimately by a horde of central planners.

But, 96% of Republicans understand that business and economic activity are very capable of taking care of themselves in the private sector, if only the government will get off of their backs and allow them to earn a living and hire Americans.  Unfortunately for the Republic and for Republicans, Romney seems to understand this, but is largely unwilling to state it clearly for fear of leaving the comfort zone with the Republican Establishment, Washington politicians, and the media.  If Romney loses this election or just squeaks in as the next President, it will be because he failed to state emphatically enough what most Republican Party members understand.  Government is the Problem.

The Backfiring Democrat Santa Analogy

Former Ohio Governor Ted Strickland when speaking at the Democrat National Convention (DNC) in Charlotte said that if Romney were Santa he would "fire the reindeer and outsource the elves."  Since Romney is a candidate for the presidency, it appears that Strickland thinks the President has a job analogous to that of Santa.  This does seem to be very compatible with the Welfare State mentality of the Democrats.

According to the Democrats and their DNC promotional video, we all belong to the Government.  The head of the Government is the President, who is supposed to be Santa.  This is clearly Government for Children, not for adults who believe their General Welfare is only served when the Government protects their equal, sovereign individual rights.  Santa, or the President, is supposed to have many, many reindeer employees, which is code for many government workers who are supposed to be no brighter than reindeer and only work a small portion of the year.  Ideally, one night each year.  Government is not supposed to be efficient.

The elves are the private sector producers who are heavily taxed and assigned brutal mandated hours of unpaid work for the government, or Santa, to produce the gifts to be given to the Children on Christmas Day.  The gift receivers are deceptively called children to earn our unqualified love, but they are really disguised special interests such as the labor unions, government employee reindeer, green energy companies, trial lawyers, tax lawyers and accountants, and radical anti-human environmentalists, and the like.  Santa Obama redistributes the wealth created by the elves to these special interests so fast that he has just sent the national debt soaring past $16 trillion dollars.  When interest rates on the national debt return to long-term averages, the interest on the debt will exceed the cost of Medicare!  No matter how much a future Santa may want to take from the elves in taxes, he will not be able to take enough to pay the interest, Medicare, Medicaid, and Social Security costs even if he spends nothing on any other Government program.

The elves are not actually outsourced.  It is their jobs that are outsourced.  Because Santa, really the President and the Democrats, has expanded Government gift-giving, or spending, from 18% of the economy to 25% of the economy, the elves who are in the private sector have been deprived of the means to grow the economy at a rate to match that of the 39% growth of Government spending.  As a result, many are unable to compete with foreign elves whose productive organizations pay lower taxes and may have fewer and less expensive regulatory mandates.  Other private sector elves are not able to consume as much as they used to, so fewer elves are needed in jobs. Elves have become unemployed in droves.  There are fewer elves with jobs now than when the present Santa became Santa.

What is worse, the population of elves and reindeer has been growing and there are about 3 million more elves and reindeer a year.  This means that the sum of elves and reindeer need about 2 million new jobs each year so that those who want to have jobs will have them.  Over a three year period they need 6 million jobs just to keep up with the population growth of elves and reindeer.  Of course, many of the out-of-work elves of three years ago also want to have jobs again.

Meanwhile, Santa is boasting that he has created 4.5 million new jobs since the depths of a recession reached three years ago.  He counts all the reindeer jobs and all the elf jobs as jobs he has created.  Some of the elves say that they created their businesses, but the Santa President says that they did not.  He did, because he creates all jobs, even the jobs of self-employed elves.  Many of the 4.5 million jobs, actually all of them in net, are due to increased self-employment by elves.

The Santa President is a very arrogant man.  He has a horde of black shirt special interest comrades who want his rules strictly enforced, which are too complicated for the reindeer and the elves to understand.  His rules also change very quickly.  He only likes those who vote for him and give him big presents in tribute for his ruling over them.  This Santa gives reindeer favors and agrees to favor or not to hurt certain elves if they give him tribute.

Most of the elves are given a lump of coal at Christmas time and no other gifts.  Because the President Santa is not allowing coal to be used for energy, coal is an even worse Christmas present than it used to be.  President Santa also hogs huge areas of land and all offshore areas and will not allow elves to get oil and gas in his private reserves.  The cost of gasoline has more than doubled under this Santa, so the elves are having trouble driving to work, if they have any work.  Santa forces the elves to turn their food corn into ethanol and mix it with gasoline, despite knowing that this makes food more expensive, creates no energy, and increases pollution.  The elves are finding energy to be more and more expensive and more and more unreliable, so their productivity in the private sector is suffering and the 5% growth they used to have has been replaced with 1% growth.

The elves' homes are colder in the winter and warmer in the summer.  Their homes are also worth about 40% less than they used to be.  Many elves owe more on their mortgages for their homes than their homes are worth.  Many of the elves were supposed to retire soon, but can no longer afford to retire.  Elves have less income now than they did when the Santa became Santa.  More and more elves are angry at Santa.  Santa has violated Christmas and the entrepreneurial spirit of plenty that the industrious elves of our land once created.

Santa Obama is about to be replaced by President Romney, who the elves hope will be less a Santa and more of a protector of individual rights so that the elves will be able to choose their own values more in the private sector and can work to create very big pies and other goodies.  They do not want to have to give so many of their pies and goodies to the Santa President so they can improve their own lives.  Santa Obama was a rabble-rouser and a special interest lawyer before he became Santa.  The future President Romney was a elf who made many pies and goodies himself and claims to like busy elves.  It is highly unlikely he will be as bad a Scrooge as the present pretend Santa has proven to be.

Government Centrally Planned Economy Continues to Kill Job Recovery

The July 2012 Bureau of Labor Statistics unemployment report of the Household Survey without any seasonal correction of data, revealed a loss of 76,000 jobs in July compared to June.  This was rarely reported in the mainstream media.  The nominal, though rather meaningless, unemployment rate went up from 8.43% to 8.56%.  The percentage of the population with jobs dropped to 58.81% from 58.89% in June.  The headline statistic reported by the mainstream media was that 163,000 jobs were added in July.  This was based on seasonally adjusted data from the Establishment report, but there are problems with the seasonal adjustments in this unprecedented recession and there are a record number of self-employed people these days since they cannot find jobs otherwise.  Many of those self-employed people decided in July that they were not really effectively employed any longer.  They had tried self-employment in desperation and failed in the uphill struggle with the Obama economy.  To take the fate of these people into account, we need to examine the Household Survey data, as I have been doing all along in this unprecedented and never-ending recession.

The number of missing jobs is calculated based on the employment workforce of January 2000 when many quality jobs were available and the unemployment rate was 4.04%.  The workforce then was 67.49% of the total non-institutional civilian working age population.  The number of missing jobs in July 2012 is slightly lower than it was in July 2011 by 256,000 jobs, but it is higher by 696,000 jobs than it was in the miserable month of July 2010!  In two years of supposed recovery the number of missing jobs has actually increased by almost 700,000.  This is not a real recovery.  It is all smoke and mirrors.  The percentage of missing jobs compared to those wanted went up from 12.74% in June to 12.86% in July.

Biomedical and diagnostics companies such as Medtronic, Boston Scientific, Stryker, Covidien, Abbot Labs, Qiagen, Invacare, GE, SurModics, WorldHeart Corp., the Cordis Div. of Johnson & Johnson, C. R. Bard, BioMerieux, Celera, Cardo Medical, Resetta Genomics, and Care Fusion are all laying off employees, many citing the 2.3% tax on all revenues, not profits, from biomedical devices and on clinical testing in ObamaCare, or more accurately, ObamaUncaringTax.

Defense companies are doing the same in anticipation of the large cut-backs in defense spending brought on by the sequestering of defense funds as the Democrat Senate has failed to produce a budget in the entire presidency of Obama, or over 1203 days or 3.3 years.  This budget is required by law for very good reasons, but this Senate is lawless.  A recent study by George Mason University scholars calculates that the sequester cut-backs in military equipment purchases and R&D will result in the loss of about 1 million jobs.  Because the reduction in funds begins on 2 January 2013 and the WARN Act requires companies making large layoffs to give employees 60 days notice, these reductions will substantially have to occur by 3 November 2012.  Identifying the victims and processing such large numbers of lay-offs takes a massive amount of management time and hurts productivity.  The best way to handle such a process is to begin paring employees early, which many of these companies have been and continue to do.  Most of these cuts have nonetheless not yet been announced or made.

The Obama and EPA war on fossil fuels also is killing jobs.  Coal mines are closing and coal-fired electric power plants are closing.  Some railroad jobs will be lost as a result.  Because electricity costs are going up substantially as a result of losing low-cost coal-fired power plants and the mandates for very expensive wind and solar power, many businesses have higher costs and cannot hire added employees or are losing those they had.  The Obama restrictions on offshore and federal lands drilling and exploration for oil have caused many potential jobs to be lost in those activities.  America has an incredible portion of the world supply of coal, oil, and natural gas.  Feeder and long-distance oil pipelines have also not been built, which would have provided many jobs.  Refinery expansions and new refineries are badly needed, but regulations make such investments very hard to make.  This is another lost opportunity and results in higher fuel costs for transportation and higher plastic costs as well.  These higher costs inhibit the growth of many companies and add to reductions in consumer disposable income.  This senseless Obama vendetta has cost Americans many, many jobs.

Good government does not steal so much money and other resources from the productive private sector.  Good government is minimal government and serves only to protect the sovereign rights of the individual to life, liberty, property, the ownership of one's own mind, body, and labor, and the pursuit of happiness.  Such legitimate government makes way so that a robust private sector can produce a cornucopia of jobs, products, services, and ideas.  The illegitimate Obama government is greatly inhibiting the private sector and preventing the private sector from generating this abundance of wealth.  The role of government in producing jobs is simply to get out of the way.  That is a fact the Democrat Socialists will never understand.  If you want jobs and a healthy economy, this Obama administration and this Democrat Senate must be dismantled as a result of the November election.

Obama Jobs Bill Will Kill Jobs

The Obama Jobs Bill is supposed to cost $447 billion, create as many as 1.9 million jobs according to economists who have already proven they have no clue, and increase the GDP by 2%, again according to those same clueless economists.  Let us examine the effects of the Obama Jobs Bill in a simple and rational manner.

The GDP in 2011 is estimated to be $15.012 trillion.  Obama's clueless economists say that his jobs bill will increase the GDP by 2% because simply printing money you do not have always increases the size of the economy.  Hmmm....., no wonder many of them keep saying we just need bigger stimulus packages and with an outpouring of enough newly printed dollars, the economy will grow and we will all have dream jobs.  If this effect works, then the government should print up $15.012 trillion and the economy will take a Great Leap Forward!  Apparently some us are just too timid to do this.  But Paul Krugman would be happy to push us into it.  OK, so yes, I do not believe this is the way the economy works for a minute, or even a second.  But still, it is interesting to examine whether the Obama Jobs Bill makes some kind of sense even on the numbers given by the clueless Obama economists.

First, we need to note that the cost of the bill, $447 billion, is 2.98% of the GDP.  That is more than the 2% growth of GDP claimed to result from this expenditure!  In fact, we can calculate from these numbers that for every dollar spent by the government in this Obama Jobs Bill $0.33 simply vanishes into thin air.  The Obama economists are claiming that this government expenditure is only 2/3 as effective as other money in the economy, which already includes huge inefficiencies due to the cost of overblown governments with their over-compensated employees and all of the mandates and regulations they impose without regard to cost upon the much more efficient private sector.

But, it gets worse.  Assuming that, most unbelievably, Obama's Job Bill does create the wishful 1.9 million jobs, each job costs $235,263.  This comes from dividing $447 billion by 1.9 million jobs.  We can compare this number with the cost of the jobs we presently have.  Of course the cost of those jobs is already grossly cranked skyward by the many prior costs of government, so we should remember that real private sector jobs cost less than the amount we are about to calculate because we are including all jobs and that includes all of those very expensive government jobs.  At present, each job costs ($15.012 trillion)/(140,335,000 jobs) = $106,973, where the present number of jobs comes from the Bureau of Labor Statistics Unemployment Report for September 2011.  So a new Obama job will cost 2.2 times as much as the composite of private sector and government jobs presently costs.  Surely, taking 2.2 times as much money out of the private sector as it takes to create a job there and giving it to Obama to create a job is not a good idea.  It is a great way to bankrupt America and many of its families.

Now, some economists believe in magic and they will disagree with me on what I am about to point out.  When you remove 2.2 times as much from the private sector as it takes for the private sector to create a job, you actually destroy 2.2 jobs for every job you create.  Yes, Obama will create jobs with his $447 billion expenditure of our money, but he will kill more than 2.2 jobs in the private sector for every job he will create for his campaign contributors.  He will create some union jobs to build and repair infrastructure.  He will maintain some teaching positions for the teachers unions in public schools.  He will create some temporary green energy jobs, but the collapse of those businesses will still occur soon, as it did with Solyndra and numerous other green jobs companies producing expensive and unreliable energy products.  Obama will try to point out the jobs created, so this is what will be seen.  What will not be seen, except partially in the rising unemployment statistics, will be the 2.2 minimum number of jobs destroyed in the private sector.  Obama is counting on our failing to see those jobs die.

What I am saying is based on recognizing that if government spends money, it is taken out of the private sector one way or another.  Generally, it is either taken out in taxes, by borrowing it with the payment of interest paid with future taxes, by simply printing it and diluting the value of all other money and assets, and by imposing mandates upon the private sector that cost them time and money.  In this case, Obama wants to raise taxes on the "rich" or companies which will remove money from the private sector in a simple and straightforward way to pay for this turkey bill.

Now I do not believe the Obama Jobs Bill will create 1.9 million jobs at all, even if we do not subtract the jobs killed by Obama.  We can easily calculate the number of jobs that will be killed.  These jobs are jobs that might well have been jobs long sustained by the private sector and they will be replaced by a smaller number of jobs that will not make economic sense once the immediate government expenditure runs out.  The private sector jobs killed will be about $447,000,000,000 / $106,973 = 4,178,625 jobs, or more than 4 million jobs, to be replaced with maybe 1 million jobs for Obama's cronies.

As I said, it gets worse.  Creating about 1 million temporary jobs while killing more than 4 million longer term jobs cannot be the act of rational men and women.  But it is the way the wrongheaded Obama wants badly to drag the country.  It is Obama who will throw most of us off the cliff.

Someone should make an ad of a jackbooted Obama marching shackled American workers to a cliff and then pushing them over the edge, one by one, with the calculations above overprinted on the images of a fascist Obama.  This would only be justice to pay back the injustice done to Paul Ryan.

Obama Kills Jobs and Resuscitates the Great Socialist Recession

Let us start off with a chart showing the number of jobs missing from our economy since January 2000 in thousands of jobs.  The number of missing jobs in January 2000 was equal to the number of unemployed people then who were looking for jobs or in some cases were simply taking some time off between jobs.  Jobs were plentiful then and had been for several years, so unemployment was only 4.0%.  Because of the boom and bust nature of the economy since then due to the Federal Reserve setting very low interest rates, the deficits run by our governments, increasing regulations and taxes, added energy costs due to drilling prohibitions, recent added uncertainty caused by ObamaCare and Dodd-Frank financial reform, and considerable class warfare and anti-business rhetoric, the number of missing jobs has increased greatly in the course of the last 11 years.

The number of missing jobs is calculated assuming that the same percentage of Americans would work today as did in January 2000 if good jobs were available.  The high tech bubble that burst in 2001 and 2002 had already created a situation with about 5 million more missing jobs than we had had at the beginning of the century.  In December 2007, the United States had not yet been much affected by the recession due to a sharp increase in the price of oil that was already hurting most other countries of the world.  But in 2008, companies began laying off employees and stopped hiring new employees.  This never-ending Great Socialist Recession was underway.

Since Obama occupied the White House, there has been no substantial or sustained return to normalcy.  The number of missing jobs for the last four months has been almost constant.  There was actually a small increase in the number of missing jobs in August, though the statistics are not really good enough to consider that a real effect.  What is real is that over the long term now, there has been no improvement.  This is not surprising since almost every action the Federal Government and the Federal Reserve have taken was effective in killing jobs, not in creating them.  Jobs are conserved in big businesses and many, many jobs are created by small businesses when the government does little to hurt their businesses.  The Federal Government and many state governments have worked very hard to create very tough business conditions and much uncertainty when American business already faced a world largely in recession and stiff competition from abroad.

Obama's socialist viewpoint, his servitude to labor unions, and his academic economic advisers with their belief in Keynesian economic theory, led him and the Democrats down a very wrongheaded path.  America is in misery because of this wrongheaded understanding of the economy and business by our ever more controlling central planners in Washington.  The private sector and Capitalist free market can do much better.

More Missing Jobs in March 2011 than in March 2010

While there are 869,000 more people employed in March 2011 than in February 2011, there are 263,000 more missing jobs in March 2011 than in March 2010!  Job creation by the private sector in March 2011 was fantastic, but so many jobs were killed by the idiocracy [consistent wrongheadedness while determinedly ignoring reality] of the Obama Central Planners in 2009 and 2010, that we have a very long way to go to recover from this Great Socialist Recession.  In January 2011 the American economy was missing 23,502,000 jobs and in March that number was down to "only" 22,339,000 missing jobs.  The real unemployment rate has fallen from 14.59% in January to 13.85% in March.

This is progress, but it may be very fragile progress, given that the prices of oil and gasoline are now so high.  Food prices have also risen substantially.  The Republican House of Representatives has as yet been unable to significantly cut government spending and seems even to lack the will to do so.  Since we have already had a double-dip recession, we may be in for a triple-dip recession.  The Democrat Socialist Party is trying very hard to make that happen with its anti-energy policies of treating CO2 emissions as though they are pollutants and denying nearly every attempt to explore, develop, and produce oil, gas, and coal resources in America.  They have reduced the job-killing consequences of ObamaCare by giving out huge numbers of exemptions to mitigate the future harm of that system to jobs and to dampen the criticism of that liberty-trampling fascist program.

The employment figures and the missing jobs calculation are given in the Table below.  The number of jobs is the actual number of working people, not seasonally adjusted jobs.  The number of missing jobs is based on the number of jobs plus jobs sought in January 2000, when jobs were plentiful and enticing.  67.49% of the total non-institutional civilian working age population wanted those good jobs.  If similarly good jobs were available now, I believe 67.49% of the civilian working age population would be working or looking for work now also.

The number of missing jobs since November 2009 is plotted below:  In December 2010, we actually had very slightly fewer missing jobs than in December 2010.  Unfortunately, the number of missing jobs shot upward in January, so that January, February, and March of this year each had more missing jobs than the corresponding month of 2010.  We have a very long ways to go yet in creating jobs.

Missing Jobs Increase Again in November 2010

Continuing the trend since July, the number of missing jobs in the United States increased again in November 2010.  As usual, I will present the jobs statistics using those without the seasonal adjustments from the Bureau of Labor Statistics and add in the data from the November Unemployment Report.  I calculate the number of missing jobs based upon the percentage of Americans who were or wanted to be in the workforce in January 2000, near the end of a period of several years in which that percentage had been high and fairly constant.  I do not believe that Americans are yet lazier than they were then, though the easy availability of long-term unemployment insurance might be changing Americans into more dependent people.  But the overriding assumption here is that if the economy were healthy, it would produce enough jobs of high enough quality that 67.49% of Americans would want to work now, as they did in January 2000.

The number of employed Americans fell by 334,000, while the working age population grew by 185,000 people, of whom about 67.49% or about 125,000 would be expected to want jobs.  As a consequence, the number of missing jobs grew by 459,000 in a single month.  This is approaching a half-million more missing jobs in one month.  This is another human disaster.  The real unemployment rate is 13.47%, not the commonly touted 9.8%.  Despite this, the Wall Street Journal of 4-5 December 2010 has a top front page graphic showing that 39,000 jobs were added in November.  Their number was only for the non-farm payrolls.

Despite the early elation of many small business owners that the outcome of the mid-term election would ultimately work to diminish the anti-business climate in the halls of the Federal Government, the uncertainties about next year's tax rates, the escalating awareness of the costs and overhead of ObamaCare, worries about the EPA's rulings on CO2 emissions, increased costs and paperwork coming due to the new FDA regulations just passed through the lame duck Congress, continued worries about the sustainability of the federal debt and that of many state and local governments, and fears of inflation due to the massive printing of money are among the many factors keeping businesses from hiring.  Large businesses have many of the same worries and face a world of competitors in which they will pay the highest corporate taxes in the world this next year.

The 2011 State Business Tax Climate Index from the Tax Foundation

Kail M. Padgitt, of the Tax Foundation produced the 2011 State Business Tax Climate Index in October.  The report evaluates the effects of state taxes of the following types with the relative weighting following as a percentage:

• Individual Income Tax, 29.64%
• Sales Tax, 25.16%
• Corporate Tax, 19.35%
• Property Tax, 14.57%
• Unemployment Tax, 11.28%

The results of the evaluation are shown in the map below by rank:

In the scoring, the average was set at 5.00 on a scale of 10.00.  I have made up two tables giving the score of each state assigned by the Tax Foundation Study and its rank for 2011 and the rank for 2010.  To this I have added my calculated growth in the state's Gross State Product from 2005 to 2008.  I have also indicated the party in control of the governor's office, the State House, and the State Senate in 2010.

The highest ranked three states, South Dakota, Alaska, and Wyoming, stand out from the other states with their high scores.  The second set of three states, Nevada, Florida, and Montana, also enjoys some significant separation from the other states.  Then New Hampshire and Delaware stand out a bit also.  Beyond that, very small differences in state scores can mean changes of several rank positions, until you get to the bottom 7 positions beginning with Maryland.

Do high taxes discourage the growth of the state Gross State Product (GSP)?  The top 10 ranked states grew by an average of 17.59% from 2005 to 2008, while the bottom ten states grew by 13.36%.  Low taxes provided a 4.23% growth rate advantage to the low tax states in that three year period.  Let us do the math to find the effect this difference in growth would have over 5 three year periods:  1.1759 to the fifth power is 2.248, while 1.1336 to the fifth power is 1.8720.  The difference is that the low tax state economies become 2.25 times larger, while the high tax economies become 1.87 times larger.  Such growth differences matter to the quality of the People's lives.

Let us examine if there is any difference in tax ranking that correlates with the party holding power in the states.  Of course, the 2010 powers that be were not likely to have instantly changed many state taxation traditions, so the duration of control by a given party is also important.  But to keep things simple, we will just consider the party in power in 2010.  Besides, according to Judge Napolitano on Fox Business on Sunday, there is only one party, the Big Government Party, so we should find equality in this tabulation if he is right.  For the top 10 states in the business tax ranking, counting 1 for each case of control of a governorship, house, or senate, the Republicans score 17 and the Democrats score 11.   For the bottom 10 states, those with the worst business taxes, the score is Republicans 6, Democrats 24.  Sorry Judge Napolitano, but on the matter of the business tax climate, it appears that it matters quite a bit which party controls a state.

Of course, there are exceptions.  For instance, Arizona was controlled in all three state government components by Republicans and yet it was in the 34th position and had actually fallen from the 28th position in 2010.  Bad Republicans in Arizona!  I will also chide Oklahoma, where much of my family lives and where I graduated from high school.  Oklahoma has generally been a Republican state for a couple of decades now, but it ranked only 30th among the states.  With Texas (13), Colorado (15), and Missouri (16) on its borders, it is surely losing many businesses to those nearby states with much higher rankings.  In rankings that consider the regulatory environment as well, Oklahoma does better in the ranking, but still there is a clear need for improvement here.

Speaking of the border effect, the state of Maryland is pursuing an insane high tax strategy as well.  It is ranked 44, but Delaware (8), Virginia (12), and Pennsylvania (26), and even West Virginia (37) are all on its borders and offer better business tax climates.  This is why Northrop Grumman, with large operations in Maryland, just moved its headquarters to Virginia which just improved its ranking by three positions.  Virginia was chosen as the #2 best state for business by CNBC, who picked Texas #1.  Virginia's governor says Virginia is coming after Texas and will take over the #1 spot.  Maryland is not in the race and couldn't give a fig.  Maryland's expertise is in suckling at the teats of the federal pig and living off the taxpayers from across the entire country.

Looking at the map above, it is very noticeable that New Hampshire, Delaware, Virginia, Florida, Texas, and Indiana are each states that have much better business tax climates than any of the states on their borders.  They are each sucking in businesses from the nearby states and helping their homegrown businesses to succeed in the most effective manner: by not putting burdens on them with high taxes.  States using limited time tax incentives or offering training to the employees of industries the state has picked as winners are not as effective in growing businesses and jobs as those who leave all this to the private sector.  Dell Computer had a four-year special tax break from the state of North Carolina for a facility, for instance, and has now announced that it is leaving the state when the four years are up.  This is not surprising.  North Carolina is ranked #41, so it makes sense for Dell to go back to Texas at a #13 ranking or maybe move that facility to Florida with its #5 ranking.

Contrasting State Cross Border Business Health Compared to a Freedom Index

A recent discussion I was in with other alumni of Case Western Reserve University about the sorry state of Cleveland, which was just recently chosen by Forbes Magazine as the most miserable city in America, caused me to consider some of the effects on Cleveland of being in a state with a bad business climate.  Of course, the city of Cleveland does much to cause its own problems and can be said very reasonably to have a bad influence on the politics of the whole state of Ohio.  This case also caused me to think about the strange underdevelopment of southern New Jersey.  Then today, I read an article on the strong business performance of Northern Virginia compared to Washington, D.C. and the Maryland suburbs of Washington, D.C.  What explains these differences?

There are major differences in the ability to do business based on regional factors such as location, geography, population density, transportation, and other factors besides political factors.  This makes it hard to fully compare doing business in South Dakota with doing it in New Jersey or Maryland.  But, if one is a business owner or prospective owner, there is often a fair equivalency in many of these other factors if you are deciding whether to establish your business in Northern Virginia or in the Maryland suburbs of Washington, D.C.  Similarly, it is very reasonable to consider putting your business in southeast Pennsylvania, Delaware, or Southern New Jersey.  Once again, one can choose Ohio, or one of Michigan, Indiana, Kentucky, or Pennsylvania for many types of businesses.  Specifically, if one is considering the Cleveland, Ohio area, it is easy also to consider Pennsylvania.

I want to explore how far political freedom can be correlated with these remarkable differences in economic and business performance.  William P. Ruger and Jason Sorens have published Freedom in the 50 States: An Index of Personal and Economic Freedom through the Mercatus Center of George Mason University, dated February 2009, which I previously discussed in a post here.  They rated and ranked the states for economic freedom and then again for personal freedom and provide an overall freedom ranking.  They correlate the degree of freedom with rates of internal net migration.  People, at least those willing to move, find freedom attractive.  Economic growth rates may also be suspected to be dependent upon economic freedom, and at least secondarily upon personal freedom as well.  Start-up companies commonly need to be able to attract bright, hardworking professionals.  It is reasonable to expect that many of them value personal freedom.

Consider the issue of the growth of Northern Virginia versus the Washington suburbs of Maryland.  In 1970, Northern Virginia accounted for 27.0% of the Gross Regional Product, with Suburban Maryland having a 34.5% share, and D.C. a 37.5% share.  In 2009, D.C.'s share had shrunk drastically to 22%, while Suburban Maryland had shrunk slightly to 32%.  Northern Virginia rose startlingly to 46% of the Gross Regional Product.  In absolute terms, all three sub-regions grew their gross product, but clearly the rate of growth in Northern Virginia greatly outstripped that of the Suburban Maryland and D.C. areas.

How did Virginia compare to Maryland in the freedom indices?  Virginia was ranked 13th on the Economic Freedom Index, while Maryland was ranked 34.  Virginia was ranked number 9 on the personal freedom index, while Maryland was ranked 50th.  For overall freedom, Virginia was ranked number 9 and Maryland was ranked number 46.  While other factors can be critical in starting a new business, many businesses will have a fairly balanced choice between Virginia and Maryland for other reasons and will then choose more economic and personal freedom.  D.C. is not ranked, but it is almost certainly worse than Maryland for freedom, so its more greatly fallen share of the Gross Regional Product is surely to be expected.  These freedoms are not just luxuries being chosen.  In many cases, they are the difference between business success and failure.

I have a friend who lives in Southern New Jersey and he has told me many stories of the poverty there, the miserable schools, and the very high local unemployment rates.  This was true prior to the recession.  Of course such a situation can make an area already look unattractive to a business.  But, there is plenty of relatively undeveloped land in Southern New Jersey and locations close to Philadelphia and densely populated Delaware areas.  It is also in the middle of the mid-Atlantic area.  Why is this area so highly undeveloped when Northern New Jersey has a high degree of development?

Well, if we look at Northern New Jersey and compare freedom there to that in New York, we find that New Jersey does relatively well, because New York is miserable.  On the Economic Freedom Index, New Jersey is 46, while New York is 50.  Both are awful, but New Jersey is at least competitive and even better.  On the Personal Freedom Index, New Jersey rates a 45 ranking, while New York is 48.  On the Overall Freedom Index New Jersey is 49 and New York is 50.  So Northern New Jersey can compete for businesses with New York.

But, Southern New Jersey has to compete with Pennsylvania and Delaware for businesses.  One has to expect that the fact that health insurance, as mandated by the respective states, being twice as expensive in New Jersey compared to Pennsylvania, for instance, might have some impact on how businesses will fare in the respective areas.  The Economic Freedom Index takes into account many other factors as well.  Comparing New Jersey to Pennsylvania and Delaware, we find that PA is 19, DE is 24, and NJ is a lowly 46.  On the Personal Freedom Index, PA is 29, DE is 36, and NJ is 45.  The Overall Freedom Index says PA is 20, DE is 26, and again we have our lowly NJ at 49.  The inducement here is clearly to choose Pennsylvania for your new business, or maybe Delaware.  But, Southern New Jersey looks like a hard choice to justify.

Cleveland is not quite so strongly affected by conditions in a state which is really close to it.  But still, many businesses might reasonably say that they have reason to be in the Eastern Mid-West and then choose a state to be in.  This will affect Cleveland.  Of these states, the nearest is Pennsylvania.  But, Michigan, Indiana, Kentucky, and West Virginia also border Ohio.  Let me list the states, their Economic Freedom Index ranking, their Personal Freedom Index ranking, and their Overall Freedom Index ranking:

PA, 19, 29, 20
WV, 40, 17, 33
KY, 33, 26, 32
IN, 16, 19, 13
MI, 15, 20, 14
OH, 32, 46, 38

On Overall Freedom, Ohio is dead last in its local region.  It is particularly poor with respect to Indiana, Michigan, and Pennsylvania.  It is hardly a wonder that Ohio is having a hard time economically.  This, in turn, hurts Cleveland.  To be sure, the fact that it is very hard to start a business in Cleveland is an outstanding reason for it to be a basket case.  John Stossel recently pointed out that a Cleveland official recently boasted that they helped a company set up a business in Cleveland in a mere 18 months.  In comparison, a company was started in Houston in one day.  Cleveland has 22 zoning categories, while Houston has none.  Cleveland has a penchant for electing kooks as mayor.  Dennis Kucinich was one of the worst.  Dennis the Menace is blatantly opposed to the profit motive.  He is now in the House of Representatives and for a long while opposed ObamaCare because it was not a single-payer program.  He caved after a ride with Obama in Air Force One.  [Did Obama threaten to throw him out the door at altitude?  Dennis should have held true to his convictions.]

The Progressives view freedom as the archaic and quaint coin to be paid for the aid of the needy.  Or so they say.  They do have an uncanny penchant for making the politically-connected wealthy much more wealthy and even those who are only politically connected wealthy.  But, history tells us that man's condition was little improved for eons until capitalism and the free market system began its rapid development in the 1800s.  Comparative studies today of the countries around the world show huge advantages in overall prosperity and the prosperity of the poor in nations for those nations with higher degrees of freedom.  The little study above also shows that there is some considerable reason to believe that even the differences between adjacent states in the United States are very important for the economic development of states and regions in those states.

Trading freedom for redistributionist schemes is a fool's errand.  The average wealth and income will fall, as will the median wealth and income, as will the wealth and income of the poor.  No one wins, except those who are consumed by envy and must level everyone to poverty to slake the thirst of that lowly envy.  Frankly, every state should be in a keen competition with the states near it to provide its citizens with more freedom than those neighboring states do.  Of course, the politicians would hate to see such a competition be widely recognized as important by the People.  They do everything they can to avoid letting us know about this, including insisting that the government-run schools not teach students about this source of American Exceptionalism.  We are prosperous because we are free.  As we lose our freedom, we will lose our prosperity.