PDX Dad

“DEAR ████████████████████ INTERNET ███████████████████████ SOPA ███████████████ IS ████████████ WRONG ████████████████████ AND █████████████████ A █████████████████ MISTAKE. ███████████████ TELL EVERYONE.”

My partner Kiki Nelson is a photographer. One of the constant discussions we have is how to protect her work when she posts it online. We’ve both seen, and reported, various people on G+ who have stolen or unattributed other people’s work. So, we’re definitely not fans of piracy; but, these bills being propose is like using napalm to kill an anthill. The unintended consequences are ridiculous. 

And you notice how quickly supporters and “authors” of the bills have backed away? Not only is this a good thing, but it also shows just how little these people know about the legislature that’s being passed in their names. Remember the hearings and how out of touch Congress seemed? More than likely, lobbyists just put these bills in front of lawmakers and told them what they wanted to hear.

We need money out of politics, and a greater reliance on experts (which also means we need to stop thumbing our collective noses at intelligence and expertise).

Image by: Mitesh Shah

politicalprof:

As the Tea Party grows in influence in Congress and among the Republican presidential candidates, its popularity is in decline nationally among the electorate. From Charles Blow.

And so it is the party that espouses to follow the ‘will of the people’ are, I’m fact, ignoring the actual will of the actual people.

Here I thought George H.W. Bush was out of touch with the American public. Turns out it’s darn near the entire GOP.

Why Barack Obama May Lose the Presidency in 2012:

President Obama’s approval ratings have hovered around 45% for the past week on average, although it’s seemed to have been around that range over the past year. His highest approval rating was over 68% in mid-January 2009 (right before inauguration). George Bush, on the other hand, didn’t see his poll numbers drop to the mid-40’s until about a month before the 2004 elections. Bush had a significant jumps in poll numbers after 9/11 (95%), start of the Iraq war (70%), and the capture of Saddam Hussein (55%). Obama only had slight bump in the death of our greatest enemy, Osama Bin Laden (2% increase to 48%). As the debt crisis looms, liberals are starting to jump ship and blame President Obama of not leading enough, of hanging gays out to dry, of not approaching Latino voters enough, etc.

And yet, Obama continues to out perform all presidential challengers in Ohio and Iowa polling by 5-20%. Plus, Obama seems to be playing the debt crisis card like a master as he continues to offer concessions and bipartisan offerings to bridge the gap between extreme slashes in government spending versus Bush tax cut expiration. The GOP continues to be painted as extremists who have no control over their caucus. What independent voters (45% of the electorate) and business leaders do not like are extremism and uncertainty in the interest rates. 

Considering there does not appear to be a Democratic Party primary challenger, and the GOP field polls weak, President Obama should easily win re-election.

George H.W. Bush probably felt the same way during his re-election bid in 1992. His challenger was a little known governor from Arkansas, he had just removed Iraq from Kuwait in the first real televised war, and social media had not been created yet to start grassroots movements which would later catapult Barrack Obama to victory 16 years later. Afterall, it was a rare occurrence indeed that an incumbent would not win re-election, especially one with such a long-lived career as the former head of the CIA and two-time Vice-President.

I’m sure President George H.W. Bush would tell you the same thing Bill Clinton told him during the 1992 presidential election, “It’s the economy, stupid.”

The chart that I’ve attached, courtesy of Stanford, is the real tell. The chart attached show the job losses, in millions, since the start of various recessions and how long in months it took to recover. As you can see, our current 2007-2009 recession is the worst in terms of job loss and nowhere near recovery. The standard guideline for ensuring those just entering the job market (graduates and those re-entering after a long unemployed spell) is 200,000 per month. At that rate, it would take until 2020 to recoup all of the jobs lost during the recession. Job growth in June was a whopping 18,000.

Reduced taxes are not the solution to starting job growth in the country. If that were the case, where are all the jobs since the Bush tax cuts were first introduced in 2001 and 2003 (and subsequently reinstated by President Obama)? If it were about taxes, why are companies holding onto billions of dollars while the capital gains tax (the tax on investments) sits at a measly 15%? Bill Clinton raised the capital gains tax right before the longest stretch of job and wealth growth in U.S. History. The U.S. Corporate tax rate is only 35%, although as I’ve mentioned before most large companies get substantial tax breaks of 10%-25% off. The corporate payroll tax is only 3%-15% in the United States. Germany, one of those “socialist” countries in “socialist” Western Europe has the same corporate tax rate of 35% with no deductions and 40% payroll tax. Yet, Germany has outpaced the US in jobs creation and GDP growth since the financial crisis in 2007. US corporations are; however, sitting on billions of dollars in cash.

What matters to job growth are expectations; something totally outside the realm of taxes. The first major expectation that affects job creation is how the interest rate is expected to move. Interest rates determine the level of investment that business expend on growth. If interest rates are down, then businesses invest more, build more, and employ more. If interest rates are expected to climb, companies hold onto their cash for better profit opportunities. The 5-year short term interest rate has been below 1% since September 2009, and actually negative since March 2011. Yet there have been no real increases in job growth during that time. Why? Because investors and business owners are skeptical that the low interest rates will last. What company wants to invest billions of dollars in new plants and other capital expenditures just to have interest rates rise and they lose all their profits on return to capital (meaning they pay back more in interest rates than they earn from the new machinery)?

Any debt ceiling plan, fiscal policy, or monetary policy that would raise the interest rates would possibly bring about a double-dip recession.

The second expectation that affects job growth is increases in the change of the rate of inflation. Traditionally, inflation is created when the Treasury prints more money (or, in our electronic age, increases the money supply to banks and bond investors) than the economy can keep up with. Money figuratively is worth less and prices rise to compensate. If a widget is worth $5.00, and the value of money drops 10%, then a retailer will start charging $5.50 to cover the loss in money value. In our current economic situation no new jobs are being created by the extra money that the Federal Reserve has pumped out. The economy has not kept up with the cheapening of the money supply.

Interestingly, inflation dropped from an average of 5% right before President Obama won the election in November 2008 and remained below 2% up until the Republicans won the House back in November 2010. Since then, it has crept up steadily to 3.6% in June. As less people are put back to work, unemployment benefits run out for those out of work since 2008, and unemployment benefits for those recently out of work have been slashed, people are producing and buying less. The expectation is that inflation will continue to rise since we have this wide sea of available cash (sat on by banks and corporations alike) while productivity (which is tied to consumption) continues to decline.

This leads to an increase in unemployment, mainly because workers will demand higher wages to cover the increase in inflation. At the very least, which we have seen coupled with expected interest rates rising, is that companies are not growing. 

Unfortunately, I don’t have any good solutions, although I do support some of the ideas by former Labor Secretary Robert Reich. I recommend people read his webpage and watch his videos on http://www.robertreich.org. 

But, unless President Obama can manage to lead the nation into massive job growth, and pin any slowdown on the GOP, then there’s a very real chance that a GOP-styled Bill Clinton could provide an upset next November.