Obama's $50 Billion Infrastructure Plan... On Roads That Don't Need it!

 

Bridges, highways and roads of this country are so broken, so sorry that only radical solutions will suffice. So says our President…. like spending $50 billion of our taxpayer dollars.

A new report says maybe not. The Libertarian Research Foundation, also known as Reason, says the nation's highways and bridges are in better shape than they were 20 years ago.   The report measured infrastructure on seven different criteria.

Let's start with those bridges. According to Reason, the percentage of bridges that are deficient in this country is down from 27.8% in 1989 to 23.7% in 2008. That's far from perfect but better than in the past.

Likewise, the proportion of urban interstates that are in poor condition is down as well from 6.6% in 1989 to 5.4% in 2008.             

The percentage of rural interstate highways in poor condition is under 2% in 2008 from 6.6 % in 1989. 2% is not exactly cause for boosting our nation's debt, right?

Now here's the really interesting thing.

The report concludes that when it comes to highway infrastructure, money doesn't tell the whole story. States that spent the most money per mile didn't necessarily enjoy the biggest improvement in the seven performance measures. For example, California spent twice the national average but showed improvement in just two categories. Ten states managed to show improvement across the board despite spending less than the national average.

Which goes to show you, even when it comes to infrastructure, money isn't the answer.

The President first started talking about spending money on infrastructure as a way to bail out the economy, but that didn't go so well.

There's a lot of about infrastructure improvements that is not that predictable. Seems like the President should remember that.

U.S. CEO Blasts France: ‘Keep The So-Called Workers’

Here at Fox Business, we have, on occasion, held American workers feet to the fire. There were the FedEx workers throwing Christmas presents in the bushes instead of delivering them. Then, there were the autoworkers drinking beer on their lunch break.

But, American workers just don't stack up to French workers in the goofing-off and mailing it in department.

The CEO of American Tire found this out the hard way. Titan International CEO Maurice Taylor had attempted to turn around a French tire factory, but it didn't go so well. Here’s what he wrote France’s Minister of Transforming Productivity (yes, they have one of those) after spending time at a factory in Amiens.

"I have visited the factory a couple of times. The French workforce gets paid high wages but works only three hours. They get one hour for breaks and lunch, talk for three, and work for three. I told this to the French union workers to their faces. They told me that's the French way!”               

The CEO went on to warn that France will lose all its domestic tire producers if the government continues to meddle in labor negotiations.             

"The Chinese are shipping tires into France - really all over Europe - and yet you do nothing. In five years, Michelin won't be able to produce tire in France. France will lose its industrial business because government is more government."

As for buying the factory? Taylor says no way!

"You can keep the so-called workers," he writes.

It's no surprise that France is in a big recession. When François Hollande was running for office, he predicted the economy would grow 1.7%. By the time he hit office, he had shaved the number to 1.2%, and by the time the budget was drawn up, the government was forecasting growth of .8%.

Turns out, all of that was way too optimistic.

It all reminds me of a story I read recently about a store owner who just didn't get it. He sold a popular breakfast treat that he couldn't keep in stock because it would sell out in minutes disappointing customers who arrived later in the day. So, instead of ordering more, or making it himself, he stopped selling the treat.

Just like France, he didn't get it!

Drowning in Debt: Liberal Arts Graduates

You’ve heard of starving artists. There may be one in your family. According to a new study of Education Department data, there's a reason they are going hungry, and it’s thanks to college debt.

Consider this: student debt loads. At schools where students study Art, Music and Design, the average debt is $21,600, which is a loan payment of $250 a month. Even after five years of jobs experience, it’s a heavy burden for grads that make roughly $40,000 a year. Think about it. Harvard, MIT, or Yale has a better comparison because students are borrowing less and are earning more after graduation.             

The highest average debt load of all the 4,000 colleges and universities in the federal data base is The Creative Center in Omaha, Nebraska. The profit for schools that offer a three-year Bachelor's Degree in Fine Arts has the highest average debt load at just over $52,000. That degree earned previous graduates a salary of just $31,400 a year.

Most financial aid calculators estimate that a graduate will need to pull down at least $43,000 to make the $360 a month payments. Starting your post-college career with such an albatross is just bad news.

But the Arts schools are the biggest debt collectors. Check out this list:

We told you about the Creative Center. Well, there is also the Manhattan School of Music where the median debt is $47,000. The debt for Southern California Institute of Architecture is $42,750. The South isn't exempt either. Students at Morehouse College in Georgia carry nearly $42,000 in debt.

The study we are citing emphasizes graduates of Liberal Arts schools, and to be sure, they face the toughest time making their degree’s pay. The idea of comparing how much your aspiring college graduate can earn with the degree they want to get and how much they will have to pay in monthly loan costs is a good idea for everyone getting into school.        

According to one estimate, the average student graduates with $26,000 worth of debt. Paying that off will likely delay when your grad can buy a house, get married or have kids.  

To get more detailed information on college costs and to make comparisons, Check out Collegescorecard.org, a new website from the Department of Education developed to help college prospects see the whole picture.

Obama's Backwards Approach to the Middle Class

 

The problem with the media is that they get tired of stories and just want to move on. For example, take unemployment- the fact that this has been the worst recovery for jobs on record is something the media just can't get all that interested in.

USAToday ran a story saying that private-sector employment topped its pre-recession high, if housing related industries are excluded. That’s nice, but you can't do that because housing is the big kahuna of job creation.

That's why I want to talk about jobs today because we can't ignore it. The number of jobs in this country has fallen from 139 million at the peak of the labor market in November 2007 to 132 million today. A total drop of 6.4 million jobs from the peak.

If you include those who are working part-time because they can't find fulltime jobs, the 10 million who have stopped looking for work, and those who are marginally attached to the workforce, real unemployment is 14.5%.

The signs of distress are everywhere. As we’ve talked about before, 15% of the total population is on food stamps. Another record that we don't like to talk about is the 11 million Americans who are collecting Social Security checks to compensate for disability.

These are shocking statistics that should have all of our attention. It should have Congress up in arms, but instead, we've accepted it. It’s like that embarrassing uncle that nobody wants to claim.

It's pretty easy to hide the problem because unlike the Great Depression there are no long soup lines to get the media's attention. The family getting food stamps goes unremarked. Another able bodied worker on unemployment? That's just the way it goes.

But it shouldn't be acceptable to a nation that can still boast the biggest economy in the world.

In his State of the Union, the President talked about how a growing middle class is essential for a growing economy. The truth is it works the other way. We have to have a growing economy to get a rising middle class. That will mean less regulation, lower taxes and an attitude towards businesses large and small that is encouraging.

Obama's Jobs Plan: Manufacturing

President Obama was in North Carolina describing a new program to bolster manufacturing in this country- especially high-tech manufacturing.         

You see, the President would like to go to all those formerly rust belt towns that were one-time industrial leaders and help them become global high-tech centers.

The idea may sound new, but the goal ultimately- developing better paying jobs- has eluded many mayors, city councils and state legislators who've tried for decades to do the same thing.

Even so, the President is ready to ante up $1 billion of our taxpayer dollars on 15 hubs around the country.

Naturally, politicians are responding by putting their hands out.

Senator Jack Reed (RI) said he wants some of the dough that will be available in such a program. He says his state was the birthplace of the industrial revolution and for that reason deserves the money.

Then there's Congressman Mike Honda of Silicon Valley. You might have thought that area needed no help from Congress, but Honda, too, would like a piece of the action because Silicon Valley is a manufacturing center in its own right.

And, on and on it goes. The President is offering our money and local politicians offering to lap it up.

What the President has right is that there is a small manufacturing renaissance going on.

What's fueling it isn't a government program, but lower costs.

Steve Malanga at the Manhattan Institute says fracking has lowered energy costs so much that it makes the U.S. more competitive. Watch out China!

Of course, the President and his coterie of brainiacs oppose fracking, but the impact to business is dramatic.

Lower wages in Right to Work states is also fueling the renaissance, but our labor backed President doesn't go in for that either.

Take a look at the states that have seen the biggest creation of manufacturing jobs. It's interesting because a lot of these states aren't friendly to government interference. States like Texas. Indiana is now a Right to Work state. Then there are places like Tennessee, South Carolina, and Washington where government has succeeded by standing out of the way.

That's the model we should be following. 

Check How Much Higher Your Taxes Will Be Before Tying the Knot

Happy Valentine’s Day! Getting engaged? Thinking about it? Well, watch out because you may have to pay higher taxes. America's marriage tax penalty is alive and well, which is to say that when a working wife and working husband marry they pay a higher rate than if they had stayed single.

According to the Tax Foundation, middle income couples get taxed more for being married. The penalty hits families progressively harder in the 28%, 33% and 35% brackets.

Are you earning more than $450,000 as a married couple?

You'll be hit by the President's new 39.6% levy. If you divorce, each partner could earn up to $400,000 at the lower rate before the higher one socks in.

The impacts are big at the other end of the income spectrum. Working couples often lose government benefits when they marry.

Then there's Obamacare. By 2014, the new health care law will mean married couples will generally receive $1,500-$10,000 less per year in health care premium support than couples who live together without being married.

The effect?

According to Heritage, is the greatest on a 60-year-old couple earnings about $30,000 each. Their annual marriage penalty in lost premium reimbursement could be as high as $10,000. Even a lower income married couple of the same age earning $15,000 a year would receive an annual government bonus of $4,212 if they chose to divorce and live together.

The tax penalties hit the country just as the percentage of intact married families in this country have fallen to an all-time low. While nearly 80% of Americans were married in 1980, only 52% of adults are married today.

Has the marriage penalty caused that fall? Probably not, but it sure doesn't help.

To find out how much of a penalty you are paying, check out the Tax Policy's tax calculator at Taxpolicycenter.org.

Obama’s Minimum Wage Job-Killer

 

Last night, the President called for an increase in the minimum wage.

“Tonight, let's declare that, in the wealthiest nation on earth, no one who works fulltime should have to live in poverty -- and raise the federal minimum wage to $9 an hour."

By the way, that's a 14% increase in pay from today's $7/hr.

Now, it's not the first time Obama has called for an increase in the minimum wage, but the difference is this time he will campaign across the country to make it happen.

The truth is, raising the minimum wage could be just about the worst thing he could do for the jobs market. We are already 7 million jobs in the hole, 7 million fewer jobs than when the President took office. Raising the minimum wage means employers whose businesses are struggling will simply get rid of jobs. They will cut workers. According to the Heritage Foundation, the last minimum wage increase eliminated 300,000 jobs,

For a president who says he won't sleep until everybody who wants a job has one, get some NoDoz because there are going to be some sleepless nights.

There are unintended consequences of a higher wage policy, but there is also the fact that the President inaccurately depicts the people on minimum wage. If you surmised from the President's description that minimum wage workers were single mothers balancing a job at McDonald’s and caring for her children, you'd be wrong.  Most minimum wage workers aren't adults but people 25 years of age and under, and 60% work part-time.

The true picture of the typical minimum wage worker is a high school or college student with a part-time job, balancing work with the demands of an academic life. Do they deserve a 14% pay hike?

According to the Heritage Foundation, people who are paid minimum wage typically live in households with incomes two or more times over the official poverty level. Non-economists refer to them as mom and dad.

Here's what the President doesn't understand that you probably do: minimum wage jobs are training positions. The employer contributes every bit as much to the worker in terms of training teaching job skills, good work habits, how to meet expectations, as the worker does. That's why these folks aren't getting top dollar. They are newbies.

The job market is full of people performing at different levels and they all don't get paid the same amount of money! That is fair, right and good.

Oh, and by the way, two-thirds of minimum wage workers don't earn minimum wage after a year. They get a raise!

Finally, I believe the President is trying to play on our fears about the economy and the future. Behind his rhetoric is the idea that the private economy isn't up to the task of providing good jobs with solid pay. The government has to kick them in the behind to make it happen.

I disagree. Our workforce isn't dominated by minimum wage jobs. It’s the exception, far from the rule. Just 5.2% of workers are paid the minimum wage, and that's down from 13.4% in 1979.

In a world in which 14 million of us are underemployed or unemployed, the minimum wage is far from the biggest problem facing American workers. We need a strong economy to produce jobs for every level of worker. Let's focus on that and solve it.

The Real State of Our Union

 

Prepare yourself. If history serves as any guide, we're in for a solid hour of State of the Union tonight. That's about how long the President has spoken before when he delivered this stump speech, I mean message to Congress.

Here's a guide to the event: starting with the words and phrases he might use that require a little explaining.

You no doubt know that when the President says "fair" or "fair share" look out because he's really talking about tax hikes. Likewise, "sacrifice" "balanced" and "compromise", well those words are all about getting to the same issue- higher taxes.

Some of the words he uses mean the opposite of the textbook definition. For example, "affordable" in reference to the Affordable Healthcare Act was anything but affordable. In the same way, "gun safety" means "gun control."

"Children and grandchildren" are the people picking up the tab, while references to "investment" means special bennies for administration supporters like Unions and green energy companies.

It's not just the words the President uses that are likely to be confusing. He will also most likely make promises about the future. We looked back at some of the previous promises he's made and that didn't go so well.

For example, during his first State of the Union in 2009 he pledged to cut the deficit in half. Did that happen? Nope. Instead, Obama averaged deficits nearly three times that of his predecessor.

He promised his stimulus plan would create 3.5 million jobs, yet the economy is 7.7 million jobs in the hole.

The President promised quality and affordable healthcare for every American. Remember Obamacare? But the CBO says that 30 million Americans will remain uninsured even after the law is fully implemented. It’s not making the system more efficient.

In fact, the law is going to take 127 million hours of paperwork each year for Americans to comply with. Improve your care? Not a chance. Not only will you not be able to keep your doctor, you may have no doctor at all. The news this week is that there aren't enough doctors to fulfill the demands of Obamacare, and well, you might have to settle for a nurse.

And finally, the President promised $15 billion of taxpayer dollars would go to more green energy technologies that would make our lives better. Instead, the government spent $2.6 billion on companies that went bankrupt. Nineteen ventures funded by our money failed. Solyndra, Abound Solar, Beacon Power, Ener1… I could go on and on.

In reality, the theme of the President's first administration was spending taxpayer dollars. I don't expect the second to be far off that mark. 

U.S. Postal Service in Dire Straits

The U.S. Postal Service's move to cut service on Saturday is being met by shock. Shock from the same people who think Times Square is too commercial.

Today, 25 members of Congress' New York Delegation sent a letter decrying the move by Postmaster General Patrick Donahoe. Some were Republicans and some were Democrats.

The truth is, a smarter move than cutting service on Saturdays would be to cut service Monday-Friday, and be open Saturday only.

Here's why: the Postal Service is broke and no matter how much hand wringing there is in Congress, we can't afford the USPS. 

If things keep up this way, you know they will come for a taxpayer bailout.

In the final three months of last year, despite campaign flyers and Christmas cards, the Postal Service lost nearly $1.5 billion! It actually loses $25 million each and every day.

In truth, the USPS is the biggest patronage program in the country. It employs the largest public workforce and only Walmart is bigger.

Walmart has 600,000 unionized workers and their wages and benefits comprise 80% of the USPS operating expenses.

Compared to 32% at FedEx, four out of every five operating dollars go to wages and benefits. That's not a recipe for success.

You get the picture. The U.S. postal service is unsustainable.

Liberals like to harken back to an era, way back when the system was started in 1788, when 75 post offices served four million Americans. They say the system provided a reliable way for information to flow, believe it or not, newspapers were sent by mail. They say today it provides an unrivaled opportunity for community members to get together.

Today, there are 32,000 post offices and 313 million Americans.

So, instead of one office serving 53,000 people as it did back at the start of the Republic, one office services less than 10,000 folks.

Bloat, waste, and excess are the hallmarks of the Post Office. When I want "community" I go to church or get on email or the phone. 

The sad reality for the Post Office is this: it's most profitable businesses have already moved to FedEx, UPS and the internet.

Even First Class Mail service is declining, down 4.5% last quarter.

The only thing the USPS delivers to my house these days that I don't get elsewhere are retail catalogues, and that's not a business I think the Federal Government should be in.

Either downsize the Post Office or close it.

We can't afford to bail it out.

What You Need to Know About The Housing Market

 

I’d like to say that I’m over the Housing bust, but I’m not.

I am still angry. Angry at the homebuyers who overbought and then were foreclosed on, the banks that gave out loans to anyone who could fog a mirror, and the government regulators who sat idly by.

You see, it's personal for me.

My home's value is still suffering, but here is the thing, when it comes to your money, you have to set emotion aside and be clear headed.

Here are the facts: home prices are up nationally 5.5% year over year and is the largest gain since August 2006.

Median home prices have gone from a low of $156,000 to almost $181,000.

What's more, 70% of the nation's 361 metro markets are in recovery up from 3% in September 2011.

S&P/Case Shiller reports that in the 12 months ending in November, prices rose in 19 of the 20 cities it tracks. Only New York was lower.

The one-time Housing bust loser, Phoenix, saw prices rise 23% in 12 months as it posted its seventh consecutive month of double digit returns.

In Washington, the market is red hot with some agents reporting bidding wars in half of the sales they make. Thanks to the bloat of our federal government, the city is enjoying is highest population in 25 years.

In Austin, Texas, first-time buyers are playing catch up with rising prices as expanding jobs lift the housing market.

It's becoming clear we are at the start of what may become a real Real Estate recovery. This is the best news American homeowners have had in six years.

Let's say it together: Yeah!!! About time!

But here's the deal. The downside of the upside is that you need to know about before you get excited are the gains, particularly in prices, have been achieved because inventory is low.

Many of these sales over the past two years have been foreclosures.

Buyers have been professionals, foreigners, people who can afford to put down cash.

In fact, one-third of all properties in California are paid for in cash.

What that all means is we aren't back to the usual market in many parts of America.

The first-time homebuyer is eager, but not dominating the market. The move up buyer is sidelined because they are still underwater.

I like Real Estate and I think hard assets are going to be a good place to be over the next several years, but here's my advice: buy right.

Be sure you are not overpaying in a mini-bubble formed by Russian investors or flippers inspired by DIY networks.

Get the facts, get rid of the emotion and make a good investment!