Are You Better Off Today than 4 Years Ago?

June 2009.

That is the date economists say the recession officially ended. That was two and a half years ago. The President maintains we're in a recovery, and he's taking credit for it.

“And we began to see signs of economic recovery here at home, even as too many Americans are still struggling to get ahead,” said President Obama. “There's no doubt that 2012 will bring even more change.”

Here's the thing: there have been some good headlines over the past year or so, but a few bits of good news does not a recovery make. Because I bet if someone asked you at home if you're better off now than you were four years ago - I don't think you'd be as cheery.

Let let the numbers speak for themselves. Last week, we told you the economy grew 2.7% in the final quarter of 2011. That's the largest quarterly increase in a year and a half. Plus, the U.S. economy has experienced ten straight quarters of positive economic growth.

However!!! Even with the strong finish, the economy expanded just 1.7% for the whole year - roughly half the growth in 2010. And growth is expected to slow in the first three months of this year. The folks who track recessions for a living -- the NABE -- forecast growth of just 2.5 percent this year. That's punk compared to most recoveries when the economy jumps 5 or 6 or 7 percent.

The unemployment rate tells a similar story. Here's the good news. The rate is now down to 8.5% from more than 9% over the summer.

However!!! The unemployment rate has been above 8% for the last 35 months, and is still considerably higher than the 7.8% when Obama took office.

Full employment is around 5 to 6 percent, but we've been down so long, 8.5% looks like up to us. If you don't have a job, chances are you're not spending much, including buying a house, which is a main reason why housing remains so weak.

For all of 2011, existing home sales actually rose by nearly two percent to more than four million homes. That's pretty good. However, back in 2005, more than seven million homes were sold. And, even though home prices are falling, one report today has prices falling another 3.75% in December. People aren't willing to buy. Perhaps because they're spending so much on gas!

The good news: gas prices have declined to $3.43 a gallon from nearly four dollars last spring.

However!!! That $3.43 is considerably higher than how much it cost for a gallon of gas back in January of 2009. And, if you're lucky enough to have a job, you're probably not so happy about your pay. The median earnings over the last decade haven't really changed much. Adjusted for inflation, the average worker made about $39,125 back in 2000. Four years ago, you'd have made $39,224. Now, it’s $39,312. Not too impressive.

A lost decade. A decade we can't afford to repeat. When thinking about who to vote for president this election cycle, ask yourself if you're better off now than four years ago - I bet I know the answer!

Is College Really Worth It?

The President hitting education hard on the campaign trail today at the University of Michigan: an issue he touched on during his State of the Union address on Tuesday.

“Higher education can't be a luxury,” said the President. “It is an economic imperative that every family in America should be able to afford."

The President vowed in his first year of office the country would have the highest number of graduates in the world by 2020.

According to Harvard University, nearly 70% of high school students go to college within two years of graduating high school.

And a small but growing number of high schools require students to take college entrance exams.

Everybody seems to be on the college bandwagon.

But should everybody go to college?

And is college the right of every American?

The numbers say there is every reason to think we are over-selling college in our society.

Consider this: federal data shows fewer than 60% of new students graduate from four-year colleges in six years, and just one in three community college students earn a degree.

More than 350,000 students who borrowed for college in 1995 had no degree six years later.

That's according to the National Center for Public Policy and Higher Education.

It's time for us to start considering that many students are wasting time and money.

Of those who do graduate, many emerge burdened with debt that will take them years to pay off: some $24,000 on average, a burden that too often means the delay of marriage, children and home buying.

Yes, college degreed workers are more likely to be employed in this economy.

But it's no guarantee of a job, and college grads don't always make more money than people without four-year degrees.

In fact a college degree is no guarantee of wealth. About 25% of those with bachelor degrees make less money than those

My view is this: we are just way too sentimental about "Old Ivy" and the value of the education students are getting these days.

The college dropout rate exceeds the graduation rate.

What's more, the jobs of the new economy, advanced manufacturing jobs, won't require college education, but will require training.

Look, I don't begrudge people getting degrees, but I also don't think everybody has to do it.

Costs have spiraled so dramatically, up 57% in twelve years, the average tuition and fees expenditure for a private non-profit school is $28,000.

Meanwhile, more and more students are defaulting on their debt.

According to the Education Department, student loan default rates have risen to 9%.

More debt, fewer degrees. And job insecurity.

Students should be encouraged to do what they do best, not forced to pursue a degree they may not want or need.

How the White House Website Is Tricking You

Time for the State of the Union again - the long-winded to-do list offered by the President in January to a joint session of Congress. And that got me thinking about last year's State of the Union.

What did the President promise - what did he actually succeed at making happen? It's time for a report card -- the President's report card.

First things first: One of Obama's big themes last year was national unity - his speech came in the wake of the assassination attempt on Congresswoman Gabrielle Giffords in Arizona.

Obama pleaded for Americans to come together in the wake of the tragedy. But, in the end, the rhetoric just got worse.

Giffords, by the way, just announced she will resign her congressional seat to continue her recovery.

Other initiatives that the President promised to pursue that have failed to see the light of day: replacing no child left behind with a better education law, making a tuition tax credit permanent, rewriting immigration laws, eliminating tax subsidies to oil companies, reforming the tax system. Much of this list got caught up in the debate over the budget and spending.

Now the President's list of accomplishments is shorter -- and the goals less ambitious:a free trade deal with South Korea, killing an ObamaCare reporting requirement for small businesses, creating a website to show taxpayers where their tax dollars go.

It's a laudable goal to create a website to help people understand how their tax dollars are used -- but it's not quite what I'd call a stretch goal.

According to Scott Hodge of the Tax Foundation, the website is a good attempt at educating people but it does not reflect reality. Here's what he had to say:

1)If you select one of their examples, say a family earning $50,000 with one child, it shows them with an income tax liability of $260. While that is probably accurate, that family is getting far more in government services and benefits than $260 - probably ten times as much. See the chart below on how much people get in government spending for every dollar of taxes they pay. On the flip side, if I put the amount of taxes that I pay into the calculator, it will show how my $18,000 was spent. However, at my income level I probably got less than $18,000 worth of benefits or services from government. The calculator does not reflect that.

2)The deficit. The government is borrowing .40 cents of every dollar it spends. Meaning, everyone in America is getting 40% more government than they are paying for. So if I pay $1,000 in taxes, I'm actually getting $1,400 worth of government. The calculator doesn't reflect that.

Bottom line, Lots of people are getting more government than they are paying for and some are getting a lot less than they are paying for (it's called redistribution). And we are all getting more than we're paying for thanks to the money that is being borrowed from our kids because of the deficit.

Here's another reality: 2010 was a year of modest goals and modest attainment for the president.

But then frankly, there are a lot of initiatives here that I am glad the President didn't get done. Barack Obama's idea of tax reform, for example, probably doesn't match my own.

Rubio Rips Obama: "America is becoming a deadbeat nation"

Florida Senator Marco Rubio sent this blistering letter to President Obama faulting his “failed leadership” for America becoming a “deadbeat nation.”

The full letter is below and a PDF copy is available here.

January 6, 2012

President Barack Obama

The White House

1600 Pennsylvania Avenue NW

Washington, D.C. 20500

Dear Mr. President: Any day now, news reports suggest you will ask Congress to approve yet another increase in the debt ceiling. The expected request is another $1.2 trillion, adding to a three year debt binge that has totaled $4.5 trillion on your watch and that has enabled our overall debt to surpass $15 trillion. Your latest request will push the federal debt limit well above $16 trillion.

This pending request will be the sixth time during your Presidency that Congress is being asked to keep allowing government and spending to grow at rates that are unsustainable. In other words, you have made it a routine part of your job to ask for more room to spend without any plan to reduce our debt.

Instead of making debt ceiling increases a routine Washington exercise, we need to make it routine to actually spend no more than we take in. Until then, I will oppose your request to continue borrowing and spending recklessly.

As I wrote in The Wall Street Journal in March 2011, I will oppose a debt ceiling increase unless such an authorization is accompanied by a real plan to tackle our debt. Ideally, such a plan would feature both pro-growth elements and spending restraints, including fundamental tax reform, regulatory reform, meaningful cuts to discretionary spending, a balanced-budget amendment, and reforms to save Social Security and Medicare.

If we had done this in mid-2011 when we last debated the debt ceiling, we could have set America on a path to economic growth and prosperity. This would have led to more jobs and, in turn, to more duly employed taxpayers generating more growth-driven revenue to help us pay down our debt. Instead, you failed to lead, punted the tough decisions and, in doing so, our credit rating was downgraded for the first time in our history. It's a tragic reality but, on your watch, more and more people have come to believe that America is becoming a deadbeat nation inevitably heading toward a European-style debt crisis.

When you served in the Senate in 2006, you called raising the debt limit “a sign of leadership failure.” Using your own standard, this request will mark your sixth “sign of leadership failure” on the debt ceiling issue alone. Throughout our history, Americans have revered courageous leaders and celebrated them as profiles in courage. Unfortunately, the first three years of your presidency have been a profile in leadership failure. While you may choose to run your reelection campaign against a “Do-Nothing Congress,” your insistence on doing nothing to meaningfully tackle our debt poses a direct threat to America’s exceptional character and is leading us towards a diminished future.

America deserves leaders who will stand front and center, level with the American people about our challenges and offer real solutions to solve them. Instead of simply asking for another debt ceiling increase, I urge you to come forward with a real plan to tackle our debt in 2012.

Sincerely,

Marco Rubio

United States Senator

Stop Cooking the Books, Mr. President!

In accounting, they call it cooking the books. Fudging the numbers to make them work for you.

Today's White House is taking that to a new level using today's jobs numbers to paint a rosy picture that doesn't exist.

Here's what the President said today:

“This morning we learned that American businesses added another 212,000 jobs last month.”

So we added 212,000 jobs minus the 12,000 government jobs lost. That's a net gain of 200,000.

So what kind of jobs?

Remember the video of the UPS guy hired over Christmas to help with deliveries?

He threw a customer's package to the ground and made an obscene gesture.

And that's where most of the jobs were. "Couriers and Messengers.”

There was a lot of hiring there because of the record amount of holiday shopping done online.

And job quality is a big issue here, because most of the jobs added over the past year were in low-paying sectors, bars, restaurants and retail.

Unemployment may be coming down, but higher paying jobs are not coming back.

Today's jobs report also shows that in the service sector - including those couriers and messengers - average hourly earnings wages went down.

Even though for the whole year average hourly earnings were up more than two percent - was not enough to keep pace with inflation at nearly three and a half percent.

So in real terms, wages are actually going down. That's how it feels to our pockets.

Here's the reality.

There are fewer people working in the private sector today than when President Obama took office.

The same is true for manufacturing, and that brings me to something you won't hear the President talk about.

A better measure of unemployment is what the Labor Department calls "marginally attached workers."

That includes everyone who can't find a full-time job or quit looking for work altogether.

What's that number? 15.2 percent.

That means the number of people hit by the bad economy is nearly twice what the official number would suggest.

And the real crux of the issue - the percentage of working-age Americans in the labor force - or the so-called - 'labor force participation rate' - is lower now than when President Obama took office.

This also makes the official number look better than it actually is.

The unemployment rate fell slightly for Whites and Hispanics - the unemployment rate for Blacks is 15.8 percent - exactly where it was a year ago.

For Black women the rate actually went up.

Hardly progress.

At the current rate of job growth, it would take until about 2020 to get back to where we were before recession.

Mister President?

“We're starting to rebound. We're moving in the right direction. We have made real progress. Now's not the time to stop.”

Yes, we do need to stop. We need to stop the crazy spending in Washington. Like the "Green Energy" grants by the Obama Administration; billions spent... A handful of jobs produced.

We can't spend our way to prosperity. If that was the case Europe would be booming, but it's not - it's bust.

And that's where we're headed if this President doesn't change course.

Obama's Three Card Monte

We warned you about it, and now it’s happening.

The Federal Government is going to pay for its payroll tax cut by charging homebuyers higher fees on mortgages.

Mortgages, that is, issued by Fannie Mae and Freddie Mac.

Normally, the payroll tax goes to pay for Social Security. But Congress and the President, trying to goose the economy, decided to continue charging lower payroll taxes.

So we are stealing from your long-term financial security to ensure your short term financial security and to do that we have to charge you a fee.

It’s a giant game of Three Card Monte in which the only source of funds is yours -- taxpayer dollars -- which are getting moved around seemingly to nobody's benefit -- except maybe politicians.

Here's how the fee works: it amounts to one-tenth of one percent of every mortgage loan backed by Fannie Mae and Freddie Mac. You've already backed Fannie and Freddie with 150 billion of your taxpayer dollars, so I am sure you'll be happy to pay a little extra to cover the payroll tax -- that's the way Washington thinks about this fee.

It amounts to 15 dollars per month on a 200,000 dollar mortgage or 5,400 dollars over the life of a 30-year mortgage. Fan and Fred already charge 26 basis points of the loan's value for every loan they back -- but this will roughly triple this charge.

Worse, the two mortgage giants say they will increase fees more over the next two years. This is exactly the reason we've been calling for the end of Fannie and Freddie -- because they are a giant sucking hole for taxpayer money -- more is never enough.

Strangely -- Ben Bernanke the head of the Federal Reserve is okay with that. The Fed wants more aggressive use of Fan and Fred to support the housing recovery -- even if it means sinking more taxpayer dollars into these leviathans. That's outrageous!

Pouring more money after bad seems like the very definition of insanity! Let's face it, there is no leadership on this problem!

The President is said to be considering a huge new program that would allow virtually all homeowners to lock in today's bargain basement rates -- sounds fantastic doesn't it?

That's because it is a dream -- what the President forgets and what all of Washington can't seem to remember is that somebody has to pay for these programs.

There's no free lunch. And no free economic or housing or bank bailout.

Donald Trump's Open Letter to President Obama

Donald Trump fired off this letter to President Obama today after China imposed new tariffs on U.S. vehicles. Does Trump make a valid point? Weigh in by leaving your comment below!

Dear President Obama,

In reading today’s New York Times Business section, I came across an article written by Keith Bradsher entitled “China Imposes New Tariffs on U.S. Vehicles.” In fact, I had to take a second look to ensure that I was reading the article headline correctly. I did not need to read past the first sentence of the article before realizing how little respect the Chinese government has for you and your administration. In case you did not come across the article, the opening sentence reads, “The Chinese government increased trade tensions with the Obama administration Wednesday evening by unexpectedly imposing anti-dumping and anti-subsidy tariffs on imports of support utility vehicles and midsize and large cars from the United States.”

This new and unfair tariff, which amounts to a 22 percent increase in the import price, evoked the weakest response imaginable from Carol Guthrie, a spokesperson for the Office of the United States Trade Representative. Her response was, “We are very disappointed in this action by China…. and will be discussing this latest action with both our stakeholders and Congress to determine the best course going forward.” For the past year, I have been clamoring to do exactly to China what they are now doing to us. When are you going to take a stand and stop permitting China to destroy our great nation? You should immediately issue a response to the President of China declaring that a 25 percent tax on every product China produces and imports into the United States will be immediately imposed.

How much more money are you willing to permit China to take from our economy? Isn’t 370 billion dollars a year enough? It’s time to wake up and realize that China is committing economic terrorism against the United States. You are single handedly allowing numerous countries to destroy our great nation and everything that we stand for.

Yours,

Donald J. Trump

President Obama's Green Giant Mess

Long about now you may be feeling a little sympathy for executives at Solyndra - the solar panel maker that went belly up taking half a billion in taxpayer-backed loans with it.

Maybe you feel like we're obsessing too much on the California company. Well, that might make sense if Solyndra was the only taxpayer-backed company that was in trouble - but it's not.

In fact if you take a look at all these green programs -- you'd be hard-pressed to be impressed.

It's not just Solyndra -- there's SunPower - another solar panel maker that got one point two billion dollars from taxpayers - only to see its stock plummet 94 percent - and their debt is higher than their market cap!

What grade should we give SunPower? Fail!

Now a new report from the Energy Department's inspector general shows another program failing to fulfill its mission. That's the weatherization program. Remember cash for caulkers? It was one of the many programs from the white house to stimulate the economy - we threw $5 billion at this idea which would also make homes more energy efficient while boosting the economy.

Recently federal inspectors began checking out whether this program was making good on its promises -- and the answer -- another failing grade!

They found some of the furnaces spewed carbon monoxide - a potential poison for those in the home.New water heaters on the verge of exploding due to missing pressure valves, this according to the Daily Beast. Contractors - not familiar with weatherization - using air blowers - that ended up spewing asbestos around the home! In fact the Energy Department says 14 percent of the projects failed to meet safety or quality standards.

Unbelievable!

All that money and no one bothered to make sure what they were doing was safe? Whether contractors knew what they were doing?

And do you remember President Obama promising to make green jobs the wave of the future?

Well the Labor Department says the multi-billion dollar program only met 10% of its goal of creating 80,000 jobs. Another failure!

And there's more: The National Renewable Energy Lab in Colorado got $300 million from you and me. How many jobs did they create? None - in fact they're actually laying off ten percent of its workforce! So why does President Obama and company keep pushing the green projects when they are obviously not working?

He may truly just believe in the goal of cleaning up the environment or it could be the more than $2 million these green-energy aid recipients have given federal campaigns since Obama took office!

Occupy Wall Street: Going Pro?

Occupy Wall Street is going pro.

You might have thought they were just a bunch of grumpy college kids who couldn't find a job -- but more and more they are starting to look like -- well, like the very corporations they despise.

Consider -- they now have property -- which can be hard to come by in pricey lower Manhattan -- a bank account with $300,000 and a bunch of committees and "working groups."

Let's break it down: The property is a storage space loaded with supplies -- all donated -- located a block from Wall Street on Broadway. They've stashed blankets, pillows, sleeping bags, cans of food, medical and hygiene supplies (no word on what that really means) plus some oddities like a box of knitting wool and 20 pairs of swimming goggles -- apparently to protect protesters from pepper spray. Occupy Wall Street is receiving 300 boxes of "stuff" a day from supporters all over the country.

The property comes gratis from the United Federation of Teachers. Naturally, we've already seen websites and other support from the unions for Occupy Wall Street.

Then there's the bank account -- and the money -- some $300,000 in cash donated through the movement's website and by people giving money in person at the park. You should know the group has parked its cash at a union-owned bank -- not one of the big money center banks they are protesting.

And, then, there's the "Demands Working Group" -- these protesters who meet once a week to try to figure out --well, why the group is protesting in the first place. So far the New York group seems to agree that jobs and civil rights should be part of the agenda but others say that even having an agenda would be a bad thing.

So there you have it -- people protesting evil corporations who have managed to attract capital, property and put in place a bureaucracy with no discernible product or goal! Only in America.

But that is where the parallels with Corporate America stop. Normally you'd expect to find some sort of charismatic leader inside an organization which has momentum like occupy Wall Street -- but it doesn't appear to have one.

Instead, the old radical thought leaders from the past keep cropping up -- like Saul Alinsky -- the '60s radical that transformed protesting and viewed Al Capone as a positive social force.

President Barack Obama has been accused of inspiring occupy Wall Street with his severe public condemnation of bankers and brokers.

Democrats, though, would do well to remember another protest movement -- the 1968 riots in Chicago during the Democratic National Convention. Thousands of protesters rioted setting in motion a wave of violence that ultimately led to Richard Nixon's election.

It is undoubtedly true that it's not clear where occupy Wall Street will lead, if anywhere. But the tacit backing of the group by Obama is a poor substitute for actually leading us out of our economic and political morass.

Because the President is not a disenfranchised college student. He's the leader of the free world. And he has a responsibility to set us on a better track.

President Obama's Big Jobs Lie?

Today I'm writing about these three words: created, saved and supported.

These are the words the Obama administration has used when talking about the number one issue in the country right now: jobs.

And there's also an evolution in how and why they are using them.

When President Obama started selling the first big stimulus package he said it would create four-million jobs. Lots of shovel-ready jobs we were told. The President used that argument again recently when selling stimulus two:

"It'll create good jobs for local construction workers right here in Denver and all across Colorado, and all across the country," he said.

It's so obvious the trillion dollars in spending did virtually nothing to help the economy. The president even joked about it: "I guess shovel ready wasn't so shovel ready after all," he said.

So with that argument shoveled out the window - the words from the White House and its allies in Congress shifted from 'created' to 'created or saved.'

Nancy Pelosi said this: "President Obama was a job creator from day one. The Recovery Act created or saved over 3.5 million jobs."

Of course we now all know it didn't quite work out that way.

So here we are once again - the President with a new spending package he's selling around the country.

But this time, it's not about saving or creating jobs . Because the White House knows that message is not working.

Now its policies are about 'supporting' jobs, take a listen to the President just a short time ago in Michigan: "Here in the United States this trade agreement will support at least 70,000 American jobs" he said.

So why the evolution? Well, you can easily count how many jobs you create.

Saved? Not so much .. And supported? Not at all.

It's a formula that can't be wrong.

It's a 'non-measurable metric' - as one former White House insider said.

What's clear is current policies on job creation are not working.

The Solyndra scandal taught us that.

Half a billion dollars of your money - with nothing to show for it. Or SunPower - over a billion dollars spent for 15 full time jobs.

Our own analysis of the Energy Department's green loan programs showed the billions of dollars resulted in just a few thousand jobs. Or six million dollars per job.

This administration needs to learn how to do the math -- to analyze their own programs to figure out the cost benefit analysis -- and to abandon programs that don't work -- more stimulus spending is like throwing good money after bad. All of it borrowed from future generations.

The White House needs to stop trying to change the language - and start trying to change the number.

This number: 14 million.

The number of Americans who are looking for work and can't find a job.