Obama's Smoke and Mirrors Economy

by Gerri Willis

More bad news on the economy today.

Business hiring is stalling, according to a private sector employment report.

We gained just 119,000 private-sector jobs last month. That's far short of estimates. And far short of what the economy needs despite what the Administration says.

The President has really only had one successful jobs program: Convincing people they can't find a job.

Adults dropping out of the labor force account for 80% of the unemployment rate's dropping from 10% to 8.2% today.

People actually working or looking for work is near a 30-year low.

And in spite of this, after weeks, months, years of failing economic policies, today Barack Obama leads or is tied with his opponent in the polls.

How can he pull this off?

Deception and distraction.

We'll start with deceptive statistics.

As you know, every week the government tells us how many people filed for unemployment benefits for the first time.

By looking at where that number goes week to week, we can get an idea of whether we're gaining or losing jobs.

The number is critical. The markets move on the data. Bad news can turn the day into a disaster for your 401k.

In its wisdom, the government actually reported the numbers twice: First an estimate, then the revised,

This year, we've had 15 straight revisions higher on the numbers. Of the last 59 weeks, 58 weeks have been revised higher.

Seems to me like in a perfect world the revisions down and up would even out, but that's not the case.

And, it's raising serious questions about the credibility of the government's numbers.

Some serious analysts are asking whether the Department is wearing rose-colored glasses.

But the President's favorite way to win in the polls while losing control of the economy: Distraction.

Like yesterday, while protesters are in the streets, rallying against economic issues like household income dropping over four thousand dollars on the President's watch, he makes a surprise visit to Afghanistan.

And, oh yeah, lots of ads taking credit for killing Bin Laden, like this:

“But he reasoned ‘I cannot in good conscience do nothing.’ He took the harder and the more honorable path, and the one that produced in my opinion the best result.”

All this hoopla despite the fact jobs and the economy are voters' number one issues.

By a margin of ten to one, economic issues trump security and foreign policy.

Afghanistan is the latest distraction. Watch for Obama to resurrect more of his top hits as we near the election.

Issues that don't even make this list: The so-called "war on women." Whether his opponent is a caring dog-owner. Or how many years of tax returns he releases.

This November, don't get deceived, and don't be distracted. If you do, you'll have one more "D" in store for you. Debt.

Five trillion added on the President's watch so far.

Obama's "Forward" Slogan is all Backwards

by Gerri Willis

Now that he’s officially campaigning for re-election, the President's put out a seven-minute video of his accomplishments. I guess there wasn't enough to make it an even ten? He’s revealing his one-word campaign slogan, "Forward."

Have a taste:

Narrator: “The President's stimulus plan saved up to 4.2 million jobs, including teachers, construction workers, police and firefighters working to build a stronger America.

Pres. Obama: I believe America is on the way up. Thank you, God bless you, God bless the United States of America. [Vis: Forward]”

I've got a much better slogan for the President: Backward.

That's his economic policy in a nutshell. What do you call raising taxes in the middle of a recovery?

He's signed 21 tax hikes into law in the last three and a half years.

And the worst of them haven't even gone into effect yet.

And that doesn't count the expiring tax cuts this President has vowed to not renew.

What's the impact? Our growth last quarter was a paltry 2.2%.

Unemployment stuck above 8%. And it doesn't stop there.

The President's sliding backward on health care. You remember his promises on what Obamacare would do:

“Our approach would preserve the right of Americans who have insurance to keep their doctor and their plan. It would reduce costs and premiums for millions of families and businesses. … our approach would bring down the deficit by as much as $1 trillion over the next two decades.”

While in reality the cost of Obamacare is rising.

And the cost of your health-care premiums have only gone up since it was passed!

Over two thousand dollars for the average family.

Finally, the President is backward on energy.

Gas was a $1.84 when Obama took office.

Today it's $3.82.

It's more than doubled!

All the while millions of barrels of oil are off-limits in ANWR, off the coasts, in the Gulf of Mexico.

Instead of common-sense solutions like approving the Keystone pipeline, the President throws away hundreds of millions of dollars on green energy failures like Solyndra.

But there is one way the President is very "forward" thinking: the national debt. It's up nearly 47% since the President took office.

He's going to pay for all these programs by pushing the bill forward, onto our children, our grand-children.

But beyond this, there's one more "forward" connection you might not have thought of.

The great leap forward.

China's clever branding for a country trying to make the transition to modern society.

But Mao Zedong's government takeover of farming back in 1958 was disastrous. Millions died.

"Forward" just isn't a good rallying cry.

At least we told you about it.

Forewarned is forearmed.

The Obama Economy - By the Numbers

by Gerri Willis

Mitt Romney essentially now declaring victory in the Republican Presidential Primary.

After sweeping all five races this week, he used his acceptance speech to pose the most important question of the campaign:

“Four years ago, Barack Obama dazzled us in front of Greek columns with sweeping promises of hope and change. But after we came down to earth, after the celebration and parades, what do we have to show for three and a half years of President Obama? Is it easier to make ends meet?”

Based on the numbers, the answer for most Americans is no. Since Obama took office, unemployment is up. You know that. You know it's harder to find a job.

But here's the really disturbing trend: The labor force participation rate. It's how many people are working, or are unemployed but looking for a job.

And this drop shows you people haven't just lost jobs. They've lost hope. Hope of ever finding work.

Labor participation is now at its lowest levels in 30 years since before women got into the labor force in masse.

And look at the change in wages. Adjusted for inflation, you've lost $3.23 off your weekly paycheck. That's $168 you won't earn this year. If just you lost that much, it may not feel devastating. But spread that wage cut across every working American.

That's a crisis.

It all adds up to this. After three and a half years of Obama in office, you are less likely to have a job, you're less likely to even consider yourself employable, and if you are lucky enough to have a job, you're making less money.

Here's a test on the President's record. Tell me when Obama said this:

“That we are in the midst of crisis is now well understood. ... Our economy is badly weakened. Homes have been lost; jobs shed; businesses shuttered. Our health care is too costly; our schools fail too many.”

That's the President's inauguration speech. Day one of the Obama Administration.

Is it any less true today? Consider what Obama said when he became the Democratic candidate for President in 2008.

“We Democrats have a very different measure of what constitutes progress in this country. We measure progress by how many people can find a job that pays the mortgage; whether you can put a little extra money away at the end of each month.”

That's how we all measure progress, and you Mr. President have come up far, far short.

When you go to the polls this November, ask yourself this:

“Are you better off than you were 4 years ago? Is it easier for you to go and buy things in the store than it was 4 years ago?”

Shareholders Strike Back

by Gerri Willis

At Citigroup's annual meeting, owners of the stock voted 55 to 45 against a $50 million executive pay package, including $15 million for CEO Vikram Pandit.

This is all thanks to the Dodd-Frank financial overhaul law.

Buried in its 2,300 pages is a requirement for public companies to hold "say on pay" votes for executive compensation.

Now, the vote is non-binding, but the chairman of Citigroup Dick Parsons said he took it seriously, and promised the board would consider it carefully.

Shareholders have every right to be upset with Vikram.

Over the last decade, Citigroup has had the worst stock price performance of the big banks, but consistently had some of the highest executive compensation.

Citi shares up slightly today, but they're down more than 80% since the financial crisis hit.

They're down 93% from 2006.

Last year, Pandit got a $1.7 million salary, plus a $5.3 million cash bonus, and he got a $40 million retention package that pays out through 2015.

Getting a bonus should be a piece of cake for these execs, too, since the standard for the payout is an earnings track record half of what it was in 2009 and 2010 when the economy was in the tank.

Whoa! Don't get too ambitious!

Look, to be fair to Pandit, for 2009 and 2010, he accepted just a buck in salary.

But to be fair to shareholders, Citi's quarterly dividend is one penny.

At the start of this week, Citigroup announced its first-quarter profit had fallen two percent from a year earlier on a paltry one percent rise in revenue.

The Federal Reserve turned the company down on its request for a share buyback or dividend after Citi flunked the central bank's stress test in March. And don't forget the bank was one of many bailed out during the financial crisis.

Some people bridle at anyone earning millions of dollars a year, but not me.

If you can grow sales, boost the bottom line, raise the share price, then by all means you've earned a fat paycheck.

But what we can't do is reward mediocrity and failure.

There's a lot not to like about Dodd-Frank - about 2,299 pages' worth if you ask me - but shareholder "say on pay"? That's OK with me.

Last year shareholders voted down just two percent of executive pay plans. Maybe this is the start of a new trend.

Tracking the Pork

by Gerri Willis

If you thought the GSA Vegas Vacation was bad, just wait until you hear what Congress is doing with your tax dollars!

You may want to sit down for this...

Citizens Against Government Waste has published its latest edition of the "Pig book”, a report tracking Washington Pork spending since 1991.

Let's start with the good news...

The amount of earmarks in fiscal year 2012 is way down from 2010.

In fact, the number has decreased by more than 98 percent to just 152.

The cost is also plummeting.

The amount of tax dollars destined for pet projects down 80 percent to just over three billion dollars.

The authors of the report credit the new class of deficit hawks in Congress, and the "ban" on earmarks.

But three billion dollars is still a lot of money, which begs the question... If there's a "ban”, what are we spending this money on?

I'm glad you asked...

Some of the biggest offenders - Defense.

For example, Congress appropriated 255 million dollars to upgrade the army's M1 Abrams tank.

But here's the thing: the Pentagon wants to halt production on these tanks!

The report pointed out those members of Congress who were the most vocal supporters of this pork came from districts where the parts will be made.

Other ridiculous defense spending: 239 million dollars for cancer research and 120 million dollars for alternative energy research.

Both of which should never be the military's job, and that research is already being conducted elsewhere!

Speaking of energy, other pork projects include nearly 14 million dollars on Hydropower Construction, three and a half million dollars for the National Fish Hatchery and three million dollars for Aquatic Plant Control.

I don't even know what half this stuff is!!!!

Get this one: nearly 115 million dollars has been donated to the United Nations Democracy Fund despite never being asked for!

Another over-the-top gift: a nearly six million dollar award for an East-West Center in Hawaii meant to improve relations among Pacific nations.

It is well known to be a pet project of Senator Daniel Inouye.

You may have noticed that's the first name I’ve mentioned in connection with these earmarks.

There's a reason for that. This Pig Book used to be a public shaming for lawmakers spending ridiculous amounts of public money on their home districts.

The downside of the "ban" on earmarks is members of Congress have not gotten rid of them entirely. They've just gotten better at hiding them.

The report says: "the supposed lack of earmarks resulted in a completely opaque process. Since earmarks were deemed to be non-existent, there were no names of legislators, no information on where and why the money will be spent, and no list or chart of earmarks in the appropriations bills or reports."

Oh, good. Just what we need. Less transparency in Washington!

And members of Congress wonder why only 12 percent of Americans approve of the "job" they're doing.

Obama's Bad Math

by Gerri Willis

President Obama speaks about the Buffett Rule in the Eisenhower Executive Office Building on the White House complex in Washington. Tax Day Eve. Ugh. I don't know about you but the whole season gives me the willies.

I use an accountant so I don't go through every detail myself, but I do cringe waiting for the death sentence. What do we owe and who to?

No matter how much I finesse my withholding, it always seems like I am writing a check this time of year.

I think most Americans, at least the half of us paying federal income tax, feel the same way, which is why I was amazed when the President started talking about tax hikes - during tax season.

His proposal - called the Buffet Rule - would require millionaires to pay a minimum in federal income taxes of 30%.

A Senate vote on the Buffett Rule is expected to fail.

The President has been campaigning on the Buffett tax for a couple of weeks now.

And while the White House's initial reasoning for such a tax was it would help retire our nation's $16 trillion debt. Well they've backed off that a little bit because it's not really true.

Buffett tax revenues would be a drop in the bucket raising just $47 billion over a decade, while Mr. Obama's budget adds nearly six and a half trillion to the debt over the decade.

According to some, the tax would cover just 17 days of increased deficit under the Obama tax plan. So what's the point again?

When his advisor David Axelrod spoke on the tax on Fox News Sunday, you could hear the waver in his voice as he tried to explain the wisdom of suggesting tax hikes during tax season:

“But nobody can argue -- nobody can argue, Chris -- nobody can argue that it makes sense for people who are making $1 million a year or more to pay less than the average middle class worker in this country. So, it both helps us stabilize the deficit and ensures amount of fairness in our tax system.”

Pardon me, Mr. Axelrod, but the reality is this: The wealthy already pay most of the income taxes collected in this country.

The top ten percent pay over half of all federal taxes - the top one percent over a quarter!

And according to the Tax Foundation, millionaires paid an average tax rate of 25 percent - more than three times the average tax rate for a family earning between 50 and 75 thousand dollars.

Let's recognize the Buffett tax for what it is: an election year campaign slogan aimed at firing up the left and winning over the middle class.

Fortunately, most folks can see through this kind of thing.

At least the viewers of this program are smart enough to see through it.

Instead of one-off ideas adding more burden to an already overwhelming tax code, why don't we simplify the tax code and make it fairer for everybody.

Maybe a first principle should be that everybody has to pay something.

Where's the Cash?

by Gerri Willis

What a problem to have!

Apple, the world's biggest company, says it just has too much money!

But now it has a plan.

Apple is sitting on nearly $98 billion dollars in cash and securities.

Now it will start paying some of it out to shareholders in the form of a dividend and share buyback program - something the company hasn't done since 1995 because Steve Jobs resisted such calls.

The quarterly dividend will be $2.65 per share starting in July.

That works out to just over ten bucks annually, or just under two percent of the current stock price.

Apple said the $10 billion dollar share buyback program will begin at the end of September, and run for three years.

Investors had been expecting the move driving up Apple shares 37 percent since January.

Today, shares are hitting an all time record of $601 dollars.

Current CEO Tim Cook says when Apple began analyzing how much it could give out to shareholders, it looked at how much cash it has in the U.S.

They are just using "domestic cash" when it comes to these dividends.

Like many other big companies, which I’ll outline in a moment, Apple has much of its cash overseas.

But Apple is reluctant to bring back that $64 billion dollars because of this number: 39 percent.

That's the U.S. corporate tax rate; the highest in the world once Japan lowers its rate in April (when you combine federal and state tax rates.)

So those profits, which have already been taxed in their respective countries, would then be subject to the 39 percent corporate tax rate.

Apple's CFO Peter Oppenheimer says: "current tax laws provide a considerable economic disincentive to U.S. companies that might otherwise repatriate a substantial amount of foreign cash."

And, as I mentioned, in no way is Apple alone with this problem.

According to Moody's Investors Service, non-financial U.S. companies are sitting on one and a quarter trillion dollars in cash as of December.

But, get this: More than half of that money, or nearly $700 billion dollars is being stockpiled overseas.

The two other biggest culprits?

No surprise here... General Electric and Pfizer.

GE has more than $100 billion dollars overseas; Pfizer $63 billion.

Tech giants Google and Microsoft joined Apple with boosting their overseas profits in 2011 by more than 40 percent.

So what, if anything, is Washington doing about this problem?

As usual, not much because each side of the aisle wants something different to be changed.

According to reports, companies like Google, Cisco, Qualcomm and Oracle are waiting for Congress to repeat a 2004 tax repatriation holiday that would set a maximum rate of five and a quarter percent.

Republican Congressman Kevin Brady from Texas has sponsored such a bill.

But Obama and other democrats argue a one-time tax holiday is too much of a giveaway to big corporations.

And we all know how this administration feels about big business!

The other idea is a more permanent fix. A proposal from Republican Congressman Dave Camp of Michigan shifting the U.S. tax code to a "territorial tax system" that exempts 95 percent of foreign profits.

According to Bloomberg, this plan is very similar to the tax systems in the UK, Japan and Germany.

All four republican presidential candidates support this plan.

And that's what it's going to take for changes to the tax code to become a reality.

Someone in the White House who is not anti-corporation, not anti-profits.

Until this country fixes its onerous double taxation problem, don't expect to see these big corporations bring this money back home, and put it to use hiring people in America.

Pension Bust

by Gerri Willis

While the federal government has the ability to operate in the red, states and cities do not.

And that is no easy task.

One of the biggest problems facing these states is unfunded pension liabilities for public workers, especially teachers.

A majority of states' teacher retirement funds are underfunded, some significantly so, according to the National Council on Teacher Quality.

And with a million teachers set to retire over the next decade, the situation is stoking fights across the country.

Typically a pension plan is considered healthy if it meets an 80 percent funded benchmark.

More than 30 states have pension plans for teachers below that benchmark.

Nine are below 60 percent.

And Illinois, Rhode Island and West Virginia are funded below 50 percent!

So states are taking action.

Kansas wants to transfer new teachers and other government workers to a 401(k) style plan to help close a nearly 8.5 billion dollar gap.

California, where the pension fund is more than 50 billion dollars under-funded, is proposing employees (including teachers) contribute to at least 50 percent of their retirement costs, and all new employees would be moved into a hybrid plan that blends a pension with a 401(k).

But the most drastic move in the golden state would be to raise the retirement age to 67.

And the retirement age is a big part of the problem.

With the nation's life expectancy nearing 80 years old, the costs of paying for these pensions - with taxpayer dollars no less! - is skyrocketing.

And it doesn't help that the benefits are much more generous than in the private sector.

In all but six states, it is possible for teachers to begin collecting full retirement before age 65.

And in three states, Montana, Alabama, Kentucky, teachers can retire in their 40s.

Thankfully, Alabama is working to raise the age to 62.

If successful, that's a huge change for teachers, but it makes a huge difference.

Look at New Mexico. Right now, teachers can collect full retirement benefits at age 52.

If they’d raise the age to 65, the state could save on average $734,000 dollars per retiree!

That would go a long way in filling the $6 billion dollar gap in the pension fund.

Now, I’m not coming down on teachers. They have an incredibly important job that is in no way easy to do.

And it's not just teachers that are draining our pension funds. It's all public workers.

Teacher pensions are just a fraction of the more than $660 billion dollar shortfall in public, state and local pensions nationwide.

But the state of New York is doing something about it.

This week the state approved pension reform that will save $80 billion dollars over 30 years.

The new law creates a sixth tier of smaller benefits for future retirees, raises retirement plan contributions by up to six percent,

and the retirement age gets bumped a year to 63.

Also, only $15,00 dollars of a worker's overtime can be used to calculate benefits.

It's the worst kept secret in the public sector. If you rack up the overtime in the last year or two of working, your pension will soar.

These are huge moves for New York where pension costs are of course rising, but the empire state's pension fund is actually fully funded.

It's time states like Illinois and West Virginia take notes.

Reform can be done. Not everyone is going to like it, but sacrifices have to be made, and reality has to be faced.

The Road We Really Traveled

by Gerri Willis

An exciting event tonight: the premiere of the 17-minute documentary about President Obama’s first three years in office: 'The Road We Traveled'.

It's narrated by academy-award-winner Tom Hanks.

Here's the trailer: http://youtu.be/NXtJhLUOFXE

Stirring stuff, huh?

Three years later, and all the Administration's got to show is 17 minutes of accomplishments?

That's shorter than a sitcom without the commercials.

Makes you wonder how much footage they had to leave on the cutting room floor.

Here are the President's three major achievements you won't hear in tonight's movie.

I call it, “The Road We Really Traveled.”

When President Obama took office, unemployment was 7.8 percent. It rose to 10 before now settling at 8.3 percent.

Remember his administration said the stimulus would keep unemployment under 8 percent.

The great recession killed more than eight million jobs.

They say we're years into the recovery now, but we've only gotten two million jobs back.

That's a six million job deficit.


The President's next major accomplishment? Passing Obamacare.

A landmark case of government overreach, one that puts the entire U.S. health care system as we know it at risk. Your healthcare decided by Washington bureaucrats, not your doctor.

I'll have more details on how the costs are spiraling out of control later in the show.

And accomplishment number three: more than doubling the price of gas.

Yes, doubled.

You wouldn't think that would be possible to do to a vital commodity, but when you believe in hope and change, when you want to force Americans to buy unproven electric cars, when you "just say no" to American drilling, that's what you get.

Congratulations, Mr. Obama.

I'm sure your new movie will be a real blockbuster.

Now, if you could just stop busting America’s recovery, I’d be grateful.

Waste, Fraud and Gimmicks

by Gerri Willis

Whenever you're dealing with Washington, there are two things you have to watch out for: waste and gimmicks.

With waste, they're taking taxpayer money - your money - and throwing it away.

With gimmicks, they're lying to you about what they're doing with your money.

I don't know which is worse.

You don't have to decide because we got both from the Senate today.

Here's how Senator Barbara Boxer described today's legislative victory:

“After we had a very long and winding road to this point, we've been five weeks on this bill, but it was worth it. It's a bill that brought us together, and I am very humbled by that because lord knows it's hard to find those moments when we come together.”

So what was this legislative miracle?

The Senate passed a two-year transportation bill with a $109 billion dollar price tag.

And of course, they passed up the chance to save $11 billion dollars a year.

Look, even if you want highway and bridge improvements in your neighborhood, rest assured. Congress had the option of making those improvements for less money, but opted not to!

Senator Jim DeMint put forth an amendment to kill the Davis-Beacon act, a depression-era law requiring the government to pay union wages on all its projects.

But the Senate said no, let's pay more for labor! They rejected the measure.

If that's not enough, wet your whistle with another tidbit from the Senate's transportation bill: TIFIA - now a billion dollar slush fund for unvetted road projects.

Yes, the "Transportation Infrastructure Finance and Innovation Act" is a loan program meant to spur private investment in road projects, but they got rid of the rules that dole out the money based on merit.

As one Senator said, it's become "a first come, first serve feeding trough" for pork projects.

And the Senate bill fails to deal with one of the biggest problems with the federal funding system for highways:

States collect the federal gas tax – 18.4 cents a gallon - and send it to Washington, who re-distributes it as they see fit.

Most states pay more into it than they get back.

Think of it as class warfare between the states.

Every day Washington takes in $110 million dollars from the gas tax thanks to the states which don't get to decide what happens to the money they raised!

And don't even get me started on the short-term budget gimmicks baked in to this scheme:

The Senate wants to raise $10 billion dollars from taxes and program cuts over 10 years, but spend it all in two years (and yes, they used the same gimmick with payroll tax cuts - only worse - 10 years of savings for one year of spending...)

But this brings me to something that'll really make your blood boil. What better embodiment of waste and gimmicks than the stimulus.

More like stimu-mess.

According to the head of the Tax Foundation Grover Norquist, the states hit hardest by the recession got the least amount of money.

I know it doesn't make sense. If your state had a lot of foreclosures, a high jobless rate and high bankruptcy rates, then you were less likely to get the big stimulus dollars.

Sound unfair?

Sure it does.

But what Norquist found is economic pain wasn't a great predictor of stimulus dollars, Democratic legislators were.

In other words, the Dems were more successful at steering these dollars to their districts.

That very fact was even more important than whether state voters went for Obama in the 2008 election.


Waste, gimmicks, pork.

And people wonder why Congress has such low ratings.

Frankly, they get what they deserve.


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