Tuesday, June 12, 2012

Public vs Private and why Obama is in trouble

What’s New Today

Story #1 relates to the public sector and how it’s doing with regard to unemployment.  #2 looks at the public sector as far spending is going.  #3 looks at how the American public is doing (not so good).  #4 warns the young voters may not vote this year.  #5 has James Carville warning the democrats that they must shift the discussion away from the economy.  #6 gives us the latest from Rasmussen on the generic battle.  And finally #7 looks at Obama’s high speed rail dreams.

Today’s Thoughts

Howard Dean: “I’m not one of those who thought last week was a bad week for the Democrats, I actually thought it was a good week for the Democrats.”  Looking back on it the way things are going for the Democrats (read story 1), Dean may be right.

Margaret Thatcher warned that a single currency could not accommodate both industrial powerhouses such as Germany and smaller countries such as Greece.  Thatcher predicted the currency would harm poorer countries because it would "devastate their inefficient economies."

On Tuesday night, blogger David Burge of the Iowa Hawk blog tweeted: “The principal delusion of liberals is that liberalism is popular. The principal delusion of conservatives is that liberalism is popular.”

There is an old saying, “If the only tool you have is a hammer, you see every problem as a nail.”  This pretty much sums up Obama’s approach to the economy.  The hammer of government is the only solution Obama sees.

1.  How is the Public sector doing?

President Obama's claim Friday that "the private sector is doing fine" sparked a firestorm of attacks from Republicans and prompted a quick retraction, of sorts, from Obama, who later said "it is absolutely clear that the economy is not doing fine."

But what has gone largely unnoticed was Obama's complaint that it's the government that's hurting these days. "Where we're seeing weaknesses in our economy," he said Friday, "have to do with state and local government."

Even when he tried to walk back his comment later that day, Obama said that the private sector is showing "some good momentum" but the bigger problem is state and local government cutbacks.
And over the weekend, Obama's top adviser, David Axelrod, argued that the private sector is "certainly doing better than the public sector."

But a review of data from several government sources paints a different picture. State and local government spending and revenues are up, and while state and local government jobs are down slightly, these losses pale in comparison with the damage done to private-sector jobs over the past four years.

Here's a rundown:

State spending: Despite the deep recession and the slow recovery, annual state spending overall hasn't dropped once. In fact, by fiscal 2011, total outlays at the state level were 14% higher than they were in 2008, according to the National Association of State Budget officers. (See nearby chart.)…


From the looks of it, the public sector is doing fine.  It’s the private sector that is in the need of attention primarily in giving it some certainty in tax rates and in cutting down on regulations.

2.  The Public Sector is Doing Fine 

“It’s very clear that private sector jobs are doing just fine.”
Sound familiar? These words are not President Obama’s. They were spoken six months ago by Senate Majority Leader Harry Reid. While pushing a Democratic proposal to spend another $35 billion we don’t have to help states hire more public workers, Reid declared: “It’s very clear that private-sector jobs have been doing just fine; it’s the public-sector jobs where we’ve lost huge numbers.” At last week’s news conference, Obama simply repeated the point  Reid made last October.

Jared Bernstein, a former Obama economic adviser, said the president’s gaffe won’t do lasting damage “because that’s not the way he sees it.” But as Reid’s comment demonstrates, that is precisely how Obama and Democratic leaders on Capitol Hill see it. They’ve been saying for months that the private sector is doing fine and that the solution to our unemployment problems is to spend even more taxpayer money to hire more government workers. 

Obama and Reid have it precisely backward: It’s the public sector that’s doing fine. According to the BLS, the unemployment rate for government workers last month was just 4.2 percent (up slightly from 3.9 percent a year ago). Compare that to private-sector industries such as construction (14.2 percent unemployment), leisure and hospitality services (9.7 percent), agriculture (9.5 percent), professional and business services (8.5 percent) and wholesale and retail trade (8.1 percent). As Andrew Biggs of the American Enterprise Institute points out, the public-sector unemployment rate “is the lowest of any industry or class of worker, even including the growing energy industry.” If the rest of Americans enjoyed the same unemployment rate as government workers, Obama would be cruising to reelection….


Do you think Obama would be in trouble if the unemployment rate for the country was 4.2%?  But 4.2% raises alarm bells with Progressives when it is the unemployment rate for government workers. 

3.  Net Worth of American family down 40% since Obama became President

The net worth of the American family has fallen to its lowest level in two decades, according to government data released Monday, driven by a more than 40 percent drop in their stakes in their homes.
The Federal Reserve’s detailed survey of consumer finances showed families’ median wealth plunged from $126,400 in 2007 to $77,300 in 2010 — a 39 percent decline. That put them on par with median wealth in 1992. 

What the old joke?  If it weren’t for bad luck, Obama wouldn’t have any luck at all?  November is not going to be kind to the Democrats (he’ll be pulling a lot of them down with him).  

4.  Young Voters Dropping Out says Zogby

Nearly four years after enthusiastic younger voters poured into polling booths to help push Barack Obama over the finish line and into the Oval Office, their hope has turned to fear and pollster John Zogby says that they are ready to give up on politics.

“I truly am worried about today's twenty-somethings,” he frets. “They are our global generation and I have seen them move from hope and grand expectations for themselves and their world to anxiety and disillusionment. We can't afford to lose them,” he adds.

Zogby previewed his remarks to the League of Women Voters 50th anniversary convention Monday night with Secrets. His worry: that younger voters will stop voting.

Well the youth vote is important to liberals and Zogby is a liberal so of course he worries that younger voters will stop voting.  So this is bad news to everyone on the left. 

5.  Carville: Shift the narrative away from the economy or Die

Late Monday, James Carville’s Democracy Corps released a strategic memo that lays out a stark reality for President Obama and the Democrats: Shift the campaign narrative away from the economy, or die. Titled “Shift the Economic Narrative,” the memo encapsulates focus group work done by Democracy Corps to assess what voters are thinking. The memo says “[Voters] know we are in a new normal where life is a struggle — and convincing them that things are good enough for those who have found jobs is a fool’s errand. They want to know the plans for making things better in a serious way — not just focused on finishing up the work of the recovery.”

The above flatly repudiates President Obama’s “the private sector is doing fine” statement made during Friday’s press conference. It also points out that if the president’s economic plans are not seen as serious, they will go nowhere.

The memo goes on to note some of Mitt Romney’s vulnerabilities, before delivering this hammer blow: “But we underscore the sentiment [the voters] expressed in the postcards to the President they wrote at the end of the exercise: overwhelmingly, these voters want to know that he understands the struggle of working families and has plans to make things better.”

There are two parts to this.  First Obama needs to convince voters he “feels their pain.” Second he needs to convince them he has a plan that will make it better for them.  Sounds like the Democrats need Bill Clinton, not Barack Obama. 

6.  Rasmussen:  Generic Republican Lead Generic Democrat by 6%

Republicans lead Democrats by six points on the Generic Congressional Ballot for the week ending Sunday, June 10.

A new Rasmussen Reports national telephone survey shows that 45% of Likely U.S. Voters would vote for the Republican in their district’s congressional race if the election were held today, while 39% would choose the Democrat instead. Republicans led by seven points  the week before, 44% to 37%.

Here are more warnings for the Democrats.

7.  High Speed Rail

From solar panel manufacturer Solyndra (which received a $535 million federal loan guarantee and later declared bankruptcy) to electric car-maker Fisker Automotive (which used a $529 million federal loan to create jobs in Finland), President Obama's landmark economic stimulus legislation is rife with failures. But the California High-Speed Rail project serves as a particularly sterling example of what happens when idealistic big government liberalism has to face cold, hard reality.

Obama has pushed high-speed rail throughout his presidency, billing it as a way to create jobs, improve transportation and protect the environment by reducing carbon emissions. The economic stimulus package included $8 billion in funding for bullet train projects, and Secretary of Transportation Ray LaHood told National Public Radio that "President Obama would like to be known as the high-speed rail president." In his 2011 State of the Union address, Obama called for giving "80 percent of Americans access to high-speed rail" within 25 years as part of his plan for "winning the future." His budget for 2013 asked for $47 billion in funding for high-speed rail over the next six years.

Though Obama has not wavered in his commitment to high-speed rail, residents of the Golden State, home to the nation's most ambitions rail project, have soured on the idea. A Los Angeles Times poll released last week found 59 percent of Californians now oppose the state's high-speed rail plan, and 69 percent said they would never or hardly ever ride the train even if it were built. The San Jose Mercury News, once a proponent of the project, called the plan "delusional" in an editorial over the weekend, urging the state legislature to kill it….

I think Obama will end up being known as the “going off the high speed rails President.”

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