Sep 12 2009
Obamanomics: The Californication Of America’s Economy
The state of California, ever since it drifted far left in the 1980’s, is a disaster. School’s suck, cost of government is out of sight, cost of living (housing) is out of sight, taxes are out of sight, immigration is out of sight and deficits are out of sight.
A completely dysfunctional legislature (somehow immune from any real election challenges) has been fiddling as the state crumbles for years. They have raised the cost of business and the nanny state requirements well beyond anything sustainable. The economic climate has chased most of the top end jobs (including the government) out of state to more affordable locations, leaving it with all the social ‘responsibilities’ to cover. Unemployment is barely below 12% – which it should have reached easily in August (numbers due out next week).
The place is a mess. And as usual  it is a leading indicator of where America is headed given screwed up, liberal leaders pushing their naive and destructive policies.
News is out today painting an even bleaker job/economic picture than I wrote about just yesterday. It seems we will have years of poor jobs and too few jobs due to the fact the liberals in DC refuse cut spending  and lower taxes and get our economy moving again:
The president’s chief economic adviser warned Friday that the nation’s unemployment rate could stay “unacceptably high†for years to come — a situation that would seriously complicate Barack Obama’s ability to convince Americans that he’s beating back the recession.
Yeah, it’s a bit hard to convince people you are doing something when you are not actually doing it, just pretending to with lots of lofty, vacuous language. Time covers the long version:
… policymakers figured the most chilling scenario for unemployment in 2009 was 8.9% — a figure we breezed past in May. From December 2007 to August 2009, the economy jettisoned nearly 7 million jobs, according to the Bureau of Labor Statistics. That’s a 5% decrease in the total number of jobs, a drop that hasn’t occurred since the end of World War II. The number of long-term unemployed, people who have been out of work for more than 27 weeks, was the highest since the BLS began recording the number in 1948. Jobless figures released Sept. 4 showed a 9.7% unemployment rate, pushing the U.S. — unthinkably — ahead of Europe, with 9.5%.
America now faces the direst employment landscape since the Depression. It’s troubling not simply for its sheer scale but also because the labor market, shaped by globalization and technology and financial meltdown, may be fundamentally different from anything we’ve seen before. And if the result is that we’re stuck with persistent 9%-to-11% unemployment for a while — a range whose mathematical congruence with that other 9/11 is impossible to miss — we may be looking at a problem that will define the first term of Barack Obama’s presidency the way the original 9/11 defined George W. Bush’s.
Why is Europe doing OK? Well, they did not go the liberal fantasy economics route and put their hopes in sluggish government spending programs tightly focused to help just a few preferred groups. The smart folks went with across the board measures (like tax cuts, reduce regulation, etc) to prime the engines of entrepreneurs across economic spectrum. We played foolish liberal games by limiting the job creation spending to a tiny subset businesses based on liberal litmus tests. Had to be transportation jobs done by unions in certain districts.
On top of that the money had to grind its way through the federal bureaucracy, which means it was never going to kick in for at least a year, if not more.
That idiocy was never going to turn around an economy the size and scope of America’s. It was a fool’s errand proposed by fools (of course). And the reason we will have the same dismal results for years? Because we are going to stick with the same dismal policies for years – until we vote out the liberals in DC and turn this nation around.
Hopefully, California can also wake up from its nightmare and dump its failed leaders as well.
Good post, I’m amazed that the Times would print this (or that Larry Summers would admit it)
Oh but wait – now Obama is going to start a trade war with China. Oh, that’ll work! It worked when Smoot and Hawley tried it, didn’t it????
a small clarification. Europe is doing *relatively* better than the US, but not really “Ok”. They have simply gotten acclimatized to the much higher unemployment levels that socialist systems carry with them, and high unemployment is now a way of life.
You have to be careful with any numbers they publish, because they game them so badly. For example, the UK has reported that they only have a 7.8% unemployment rate – and yet at the same time they now report that 16% of UK households now have NO working adults and exist entirely on the dole. Wrap your mind around those numbers and you can see how useless the reported numbers are becoming.
All of Europe is still on shaky financial ground, but the UK is arguably now the biggest basket case in the world. Expect the disbanding of most of their military forces and the scrapping of their blue water navy over the next 5 years as a result – even if the Tories *Do* win the next election.
It’s been suggested that the name should be changed to “Little Britain”, since as a nation the days of “Great” Britain are now gone forever.
Europe is doing “ok” because their tax revenues for their states and provinces weren’t due to artificially inflated housing values and the property taxes that generates. Even on top of inflated property taxes, California STILL ran a deficit. Now that has imploded. But it gets worse.
People were expecting Social Security to go broke at some point. They were hoping for some protection in their old age with the value of their homes. Realtors were promoting that idea with the notion of “they aren’t making any more land” and implying that real estate values would go nowhere but up forever.
Congress got into the act mandating that millions more buyers be flood into the market driving prices up even higher. And then the bubble burst.
This is going to take a LONG time to fix. Other countries aren’t having it so bad because they didn’t suffer from the artificial housing bubble that our country did because of the Community Reinvestment Act.
Congress has screwed us for years and the shoe is REALLY going to drop when social security goes broke AND people have no equity in their homes.