Actually I personally believe there are darker motives being acted out. These radicals are as far left as one can get, imho, and David Horowitz’s h.o. as well. He’s been there, done that and knows their M.O.

I really like Robin of Berkeley’s comments as a psychologist (or psychiatrist?) over at AmericanThinker.com. Delusion is part of this group’s blind side.

Love your input here, Trent, btw.

Now is the time for Red State and Purple State Democratic Congressmen & 2010 election Democratic Senators to panic.

http://abcnews.go.com/print?id=8594380

U.S. Unemployment Not to Peak Until 2011: Krugman
By Marja Novak
Reuters
LJUBLJANA

“We might have a double dip, that’s a real possibility now for the world as a whole,” said Krugman, saying the effects of stimulus programs will start to fade early next year and recovery will be slow due to the global nature of the crisis.

>snip<

Democrats in the House are now set up for a 1994 class political hiding in the 2010 elections.

Please repeat this after me:

“Nutball Regime Becomes More So Under Pressure‏.”

Iran’s current Mullah regime is a perfect example of this.

Iranian president’s wild rhetoric was and is addressed to a domestic audience, i.e., that it concerned domestic dominance games, and that the actors do not conceive of the outside world as real, let alone able to influence events inside Iran.

Similarly Pres. Obama’s inner circle cannot see the the rest of America, or the outside world beyond America, as anything other than the Democratic power machine that is Hyde Park/Chicago politics.

Neither America nor the outside world are Hyde Park, but no one will tell the King that he is without a real robe and naked.

I had expected that by 2012 the Democrats would be pandering to the life-style police as a means of appealing to their base. As in, again, Nutso regimes become more so under pressure actions like:

1) “Mommy, a Democrat stole my corn-dog!”

2) “We’re supposed to use what instead of toilet-paper?”

The speed at which they have already gotten there with regard to environmentalists & soft toilet paper is down right scary.

I guess Pres. Obama taking over the American car industry and making American built big cars illegal was not enough for the Environmental Wowzers.

Too quote a friend of mine:

“There are two kinds of Americans, those who remember Jimmy Carter and those who will find out.”

Example 2 – Housing. You read the msm, and you will here things like “housing is recovering slowly.” No, it isn’t. Sales,
both older homes and new, are in the worst shape they have been in for decades, and the August numbers just in were “disapointing.” And this in spite of the fact that we are giving an $8000 tax credit to all first time homebuyers (expected to be used on 40% of all sales this year) and are keeping real interest rates at zero, an incredibly stimulative move. Taken together, these are the most intensive and massive stimulus that has been pumped into the housing market *ever*. And what’s the result of that stimulus? The housing market is struggling just to hang onto absolutely abysmal sales numbers. Will this just naturally pick up, as the white house economists assume? 50 years of data say that a real rebound in housing starts *after* the unemployment numbers start to turn around, not before. Not too hard to figure out why – unemployed people don’t buy many houses, and neither do people who are nervous about losing their jobs.

And what happens when this federal stimulus gives out? The $8000 tax credit (iirc) expires at the end of November, and people I know in the industry are saying that buyers who want to make it under the wire had better start processing the paperwork on a potential purchase in the next couple of weeks if they want to be sure of making it in time. The Realtors Ass’n is pushing Congress to extend this for another year – but it’s an expensive perk, and with all the budget pressure and everything else going on, I’m not sure they can get Congress to bail them out again this fall. That’s a wait and see who has Pelosi’s ear kind of a game.

The bigger danger, the one that Congress can’t change even if they want to, is what happens to housing once interest rates start going back up. And everyone *Knows* that they have to start going back up fairly soon – no country, not even America, can hold it’s real interest rates at zero without collapsing the value of their currency and cauing a massive spike in commodity prices. We’re starting to see some of that already with gold. Current interest rates are a godsend to the housing industry, but they *cannot* last much longer, not without causing misery for the rest of the economy. (otherwise why wouldn’t we just keep interest rates at zero all the time?) Raising interest rates will effectively suck all of the life out an industry that is barely surviving on life support.

As soon as interest rates start to come up, whatever bit of strength the housing market may have will collapse, and housing starts will collapse to new lows. Given the unprecedented level of vacancies (a 5 year supply at current rates) it’s at least theoretically possible for us to go at least an entire year without a single new house being built at all in this country. Just imagine what that would do to the construction industry.

Sometime within then next calendar year, this scenario will start to play out. Given our deficits, it has to.

Example 1: Chrysler. Most people are under the impression that the company was “saved” by it’s forced merger with Fiat and all the government money pumped into it. Not so – it was simply kept on life support. Sometime in November, Fiat and the new Chrysler Board are expected to announce that most Chrysler plants in the US will be shut down over the next year and possibly within 2 years the Chrysler name will only exist as re-branded Fiat’s shipped in from Italy.

You say Fiat invested too much to pull a stunt like that? Actually, Fiat invested *Absolutely ZERO dollars* (lira, euros, magic beans, whatever) into this project. They just made the best promises to the administration about keeping everything going, which is why they were handed this for free. But all of those promises were conditional, depending on “business conditions.”
The head of Fiat has already announced that “Business Conditions” (here’s a shocker) are “much, much worse than he thought when they agreed to take Chrysler over.”

bye bye, Chrysler. And bye bye to the $50 billion or so we pumped into you that only served to buy us 11 months of nothing but false hopes of unicorns and rainbows.

One thing that was interesting, was that the numbers of Democrats were almost 2 to 1 that of Republicans, a margin of more than 15%, that is almost double the margin they had in their last poll. They only had 22% Republicans in that poll. In a few months they will have to start leaving Republicans out altogether.

>Pres. Obama is doing precisely the opposite of Kennedy &
>_CLINTON_ and is repeating the mistakes of Franklin
>Roosevelt. He is convincing capital and small businesses that
>they are right to fear the future, and to conserve their capital
>and energy because he will rob them of any return on their
>capital and personal labor investment.

I think America just got an August 2009 lay off notice for additional holiday season unemployment.

More economic bad news from the same CNBC article I clipped above, see:

http://www.cnbc.com/id/33020130

Non-defense aircraft and new parts orders plunged 42.2 percent in August, likely reflecting a drop in civilian aircraft orders received by Boeing.

Analysts polled by Reuters had expected core capital goods to increase 1.3 percent. The prior month was revised to show a 1.3 percent drop, previously reported as a 0.3 percent fall.

Underinvestment in capital goods now leads to more unemployment later.

IMO, there are a whole bunch of Americans about to get Thanksgiving and Christmas unemployment slips.

Yes, we are screwed. Just how screwed awaits events.

See below from CNBC on US durable goods orders in August:

http://www.cnbc.com/id/33020130

The Commerce Department said durable goods orders tumbled 2.4 percent, the largest decline since January, after rising 4.8 percent in July. That was well below market expectations for a 0.5 percent rise in August.

Durable goods orders are a leading indicator of manufacturing activity, which in turn provides a good measure for overall business health.

This lack of American durable goods orders *may* be significant and point to more bad economic news in time for Thanksgiving and Chirstmas.

We just don’t know at this point.

There is so much slack in international cargo container box shipping that a huge supply of intermediate goods can be in the world supply chain, feeding what production is left, before new orders of goods are placed.

You don’t order more durable goods if you have them sitting in ISO cargo containers in your plant or at a rail/truck terminal near your plant.

My Brother works in a container shipping firm and he told me back in December 2008 that he was sending cargo ships back to China with only 42% of capacity filled.

In other words, 58% empty.

Since most of the cargo sent back to China from the USA is scrap of various sorts used as feed stock to make consumer goods, we saw the return feed back. Or more accurately, it’s lack, until he last couple of months.

See:

http://www.latimes.com/business/la-fi-tradecrash2-2009mar02,0,807159.story?track=rss

The bottom line is that so many shippers are over leveraged in expansion plans that won’t ever make money that many won’t survive:

Although the shipping industry has always gone through cycles, shipping companies now believe that things have changed drastically, and for the worse. “There was never a shortage of cargo in the past,” says Kranich. But that’s no longer the case today. Because of declines in consumption in the West and production in the East, the global container fleet’s enormous cargo capacity can no longer be filled. The resulting sharp decline in prices means that almost all shipping companies are generating substantial losses.

Forty-five percent of US imports of German goods pass through Charleston. Containers owned by German shippers like Hapag-Lloyd and Hamburg-Süd are stacked high in the harbor. BMWs, fresh off the assembly lines, stand in endless rows at the wharf. They include SUVs produced at the company’s nearby plant, bound for Europe, as well as 3 series and 5 series cars intended for the US market.

See:

http://www.businessweek.com/print/globalbiz/content/aug2009/gb20090811_320246.htm

If you’ve been reading the financial news, you know that the Dollar is bouncing around it’s yearly lows while Gold is at it’s all time high. China and the G-20 are starting to seriously examine the penalties to them of using the Dollar as the international reserve currency.

A second big surge of massive US government spending with no revenue to back it up is just the thing to collapse international confidence in the dollar’s long term viability, and thus lead to a collapse in its value. A collapsed dollar will not long remain as the world’s reserve currency. On the other hand, raising taxes to bolster revenue is the same fix Herbert Hoover tried in 1930 and 1931, and we already know how that works out.

To put it succinctly – if the rest of the world gets fed up enough with our financial mismanagement to drop the dollar as a reserve currency (which China was just proposing to do yesterday) then this country falls into an Argentina style inflationary depression overnight. The economic effects of this would be devastating; in fact, it could easily be *worse* than the Great Depression.

This administration doesn’t dare push a second stimulus.

This administration doesn’t dare to NOT push a second stimulus.

This administration is screwed.

And so, unfortunately, are we.

Louis Woodhill wrote an article in July 2009 that mentions that past decreases in capital investment will result in a further increase in the unemployment rate, to about 14%, before the really recent increase in investment will level things off at a 14% unemployment rate.

See:

By Louis Woodhill

Basically that article said that,

a) Just as a certain mininum amount of ongoing capital investment is required to maintain existing capital stocks,

b) A certain minimum amount of hiring new workers is necessary to maintaining a static labor force in terms of the total number employed. (I.e., there is a constant labor force turnover, with new hires replacing retiring and laid off workers.) thus,

c) Any increased workforce capital investment causes increasing employment to happen after about a six month lag time.

Which means there are two components to a rise in unemployment –

1) A failure to hire new workers to replace normal turnover, and

2) An increased termination rate.

An outright decline in economic activity might have ceased but, because new hires to replace turnover always lag increased capital investment by about six months, unemployment can continue rising due to past capital disinvestment, even if current investment is increasing.

In addition, since US population is expanding, a static labor force means an gradually increasing unemployment rate as well as absolute numbers of unemployed.

This is why I mention the small business/financial capital strike Obama’s regulatory and tax policy uncertainty is causing.

“Real” economic recovery, i.e., an increase in new hiring producing a decrease in the unemployment rate, will not begin until the summer of 2010 (if then) because those capital strike people were busy conserving — AKA not spending — thier capital.

All you have to do is look at the capital investment numbers.

Those were declining until March 2009, and have only recently (2nd quarter 2009) leveled off.

That meant that unemployment would continue to increase for a while, and then level off. (The unemployment numbers you posted here bear that prediction out.)

Only after unemployment has leveled off for a while *might* employment rates start to increase, and right now I’m not seeing any actual increase in the necessary capital investment beyond replacement levels.

This is September 2009. Wait for the fourth quarter 2009 figures on capital investment to come out next spring. Those have to show a significant increase for employment to start picking up in the summer of 2010.

Concern over this was why Democratic House Majority leader Stennie Hoyer was seriously talking about a “second stimulus plan” this summer.

His doom is that any second stimulus plan that the Democrats do that doesn’t consist entirely of massive Ronald Reagan/George W. Bush style tax cuts or tax rebates will not work fast enough in the economy to make a difference in the 2010 election.

Doing that is against Democratic Party religion in any case because of the influence of Government employee unions in Democratic Federal House and Senate primary campaigns a’la California.

A second stimulus that adds more government spending might have an impact in 2012, but it is getting late even for that because of the 2-3 year slack built into the government contracting process between;
a) passing a bill,
b) obligating the money,
c) issuing a contract and
d) actually spending the money over two years covered by the Congressional authorization.

Note that new big infrastructure programs add a step between “c)” and “d)” that includes environmental impact processes that tag on 1-to-7 years depending on the environmental regulatory issues and the litigation involved.

Obama’s sub-contracting out the stimulus bill to House and Senate Democrats meant that they timed most of the “Stimulus spending” such that the gap between steps “b)” to “c)” above – where campaign contribution influence buying pays the most — was happening a few months prior to Democratic Party 2010 primaries.

The Obama Administration and Congressional Democratic Leadership counted on the economy bouncing back in 2009 like it did for Clinton after Bush 41 in 1991 so they can do Socialized Healthcare, “Cap & Trade” energy taxes and absorb the economic shock of the expiration of the Bush Tax Rate cuts in 2010.

The problem is that the economic bounce back is not happening. It got worse, faster, in terms of unemployment.

Now Obama no longer has the policy means or credibility to do what needs to be done because the Congressional Democrats spent the money he needed to affect the economy and tarred Obama with their image in the process.