Obama Staff Get Huge Raises As Rest of Nation Has to Make Do (Click on Photo to See How Large Their Raises Were)…August 14, 2011
Confidence among U.S. consumers plunged in August to the lowest level since May 1980, adding to concern that weak employment gains and volatility in the stock market will prompt households to retrench.
The Thomson Reuters/University of Michigan preliminary index of consumer sentiment slumped to 54.9 from 63.7 the prior month. The gauge was projected to decline to 62, according to the median forecast in a Bloomberg News survey.
The biggest one-week slump in stocks since 2008 and the threat of default on the nation’s debt may have exacerbated consumers’ concerns as unemployment hovers above 9 percent and companies are hesitant to hire. Rising pessimism poses a risk household spending will cool further, hindering a recovery that Federal Reserve policy makers said this week was already advancing “considerably slower” than projected.
“The mood is very depressed,” said Chris Christopher, an economist at IHS Global Insight Inc. in Lexington, Massachusetts. “Consumers are very fatigued and very uncertain. In the short term, people are going to pull back on spending.”
Since the passage of Obamacare, healthcare costs have climbed higher than they have ever been. More and more employers are reducing the amount and type of coverage they provide to their employees while increasing how much the employees pay.
Deductibles are getting so high that many families can’t reach the limit and have to pay everything out of pocket.
And then Obamacare mandated that every American WILL purchase health insurance or be penalized and fined by the IRS when filling out their taxes.
So Mr. President, please explain to the millions of us middle income families how we are suppose to pay for the mandated health insurance when we can barely pay the bills we have now?
I know a couple who are approaching 60 years of age. They were both victims of financial downsizing, which means they lost their health insurance.
The COBRA plans employers are required to offer are outrageously expensive and who can afford it when you don’t have a job?
This couple struggled for over 2 years trying to find work. They exhausted all of their savings and retirement funds just trying to survive.
They eventually found jobs, but they are now making about 60% of what they use to. They are living from paycheck to paycheck and sometimes still not making ends meet.
They both have existing medical conditions that aren’t being treated because they can’t afford it. And now Obama says they have to purchase health insurance.
Insurance at their age and with their health issues would be the largest single monthly bill for this couple, next to their mortgage. They make too much to get any state Medicaid help, but make too little to afford to pay their bills, let alone afford medical insurance.
Mr. President, can you instruct this couple on which bills NOT to pay each month so they can purchase the mandated health insurance?
Do they not eat, have their electric turned off or not pay for water and sewer? Please Mr. President, share some of your wisdom with this couple.
Oh right! He already did and that’s what got them in this financial mess they are in now.
Obama On ANOTHER 9-Day Vacation; Unlike the Rest of Us, He Gets Rewarded With Free Trips for Screwing Things Up…August 11, 2011
At that time, the presidential family headed to Brazil where the HuffPo Entertainment section told us that the “First Family watched local performers during their tour of the Cidade de Deus Favela in Rio de Janeiro on Sunday. Sasha went sporty with sneakers, while the first lady showed her support of the country sartorially, in an outfit comprised of yellow, green and blue–the colors of the Brazilian flag. They later changed into pants to tour the Christ the Redeemer Statue at night.”
This vacation happened while the Fukushima Daiichi nuclear disaster was in full force, because Japan had been rocked by the tsunami of the century. Obama also chose the vacation to start serving up cruise missiles in Libya, a war he made his very own and that he still hasn’t won.
Libya for crying out loud. That’s like invading Wisconsin.
Here was the moment when the next Great Recession began.
We saw in that crisis the epitome of a failed presidency: the listless leadership, the lack of direction, the lack of pretension in being presidential (or even pretending to be), disregard for the consequences of policy. And the certainty that vacations would always come first.
And whatever was the purpose of the trip to Brazil, it was more of a junket than a business trip and Obama was rightly criticized for it.
Then there was that trip to Wiliamsburg that Obama cancelled because he had to, um, do that budget thing. He whined about that. A lot.
So, now comes word that after two of the worst weeks of stock market performance in the century, including a downgrade of America’s sterling credit, Obama is off to Martha’s Vineyard for nine days with the family, playing golf and doing whatever else you do on the seashore. On vacation.
I hope Obama remembers to bring a shovel and a bucket.
Yesterday the market dropped 519 points in the ninth-worst performance since 1899.Yes: 1899. Oh, yeah the sixth-worst was Monday, as in 2011.
Note to the president: It’s very helpful to the rest of us when the markets are healthy. It helps us keep our jobs.
So much for the Obama focus on “jobs.” I thought the president promised that he’d be all about jobs since the debt crisis he gave us was settled… er, negotiated? Um, fumbled? Or WTF’d.
Given the tumult of the Great Recession, this may be hard to believe. But the economy is much weaker than it was at the outset of the last recession in December 2007, with most major measures of economic health — including jobs, incomes, output and industrial production — worse today than they were back then. And growth has been so weak that almost no ground has been recouped, even though a recovery technically started in June 2009.
“It would be disastrous if we entered into a recession at this stage, given that we haven’t yet made up for the last recession,” said Conrad DeQuadros, senior economist at RDQ Economics.
When the last downturn hit, the credit bubble left Americans with lots of fat to cut, but a new one would force families to cut from the bone. Making things worse, policy makers used most of the economic tools at their disposal to combat the last recession, and have few options available.
Anxiety and uncertainty have increased in the last few days after the decision by Standard & Poor’s to downgrade the country’s credit rating and as Europe continues its desperate attempt to stem its debt crisis.
President Obama acknowledged the challenge in his Saturday radio and Internet address, saying the country’s “urgent mission” now was to expand the economy and create jobs. And Treasury Secretary Timothy F. Geithner said in an interview on CNBC on Sunday that the United States had “a lot of work to do” because of its “long-term and unsustainable fiscal position.”
But he added, “I have enormous confidence in the basic regenerative capacity of the American economy and the American people.”
Still, the numbers are daunting. In the four years since the recession began, the civilian working-age population has grown by about 3 percent. If the economy were healthy, the number of jobs would have grown at least the same amount.
Instead, the number of jobs has shrunk. Today the economy has 5 percent fewer jobs — or 6.8 million — than it had before the last recession began. The unemployment rate was 5 percent then, compared with 9.1 percent today.
Even those Americans who are working are generally working less; the typical private sector worker has a shorter workweek today than four years ago.
Employers shed all the extra work shifts and weak or extraneous employees that they could during the last recession. As shown by unusually strong productivity gains, companies are now squeezing as much work as they can from their newly “lean and mean” work forces. Should a recession return, it is not clear how many additional workers businesses could lay off and still manage to function.
With fewer jobs and fewer hours logged, there is less income for households to spend, creating a huge obstacle for a consumer-driven economy.
Adjusted for inflation, personal income is down 4 percent, not counting payments from the government for things like unemployment benefits. Income levels are low, and moving in the wrong direction: private wage and salary income actually fell in June, the last month for which data was available.
Consumer spending, along with housing, usually drives a recovery. But with incomes so weak, spending is only barely where it was when the recession began. If the economy were healthy, total consumer spending would be higher because of population growth.
And with construction nearly nonexistent and home prices down 24 percent since December 2007, the country does not have a buffer in housing to fall back on.
Of all the major economic indicators, industrial production — as tracked by the Federal Reserve — is by far the worst off. The Fed’s index of this activity is nearly 8 percent below its level in December 2007.
Likewise, and perhaps most worrisome, is the track record for the country’s overall output. According to newly revised data from the Commerce Department, the economy is smaller today than it was when the recession began, despite (or rather, because of) the feeble growth in the last couple of years.
If the economy were healthy, it would be much bigger than it was four years ago. Economists refer to the difference between where the economy is and where it could be if it met its full potential as the “output gap.” Menzie Chinn, an economics professor at the University of Wisconsin, has estimated that the economy was about 7 percent smaller than its potential at the beginning of this year.
Unlike during the first downturn, there would be few policy remedies available if the economy were to revert back into recession.
Interest rates cannot be pushed down further — they are already at zero. The Fed has already flooded the financial markets with money by buying billions in mortgage securities and Treasury bonds, and economists do not even agree on whether those purchases substantially helped the economy. So the Fed may not see much upside to going through another politically controversial round of buying.
“There are only so many times the Fed can pull this same rabbit out of its hat,” said Torsten Slok, the chief international economist at Deutsche Bank.
Congress had some room — financially and politically — to engage in fiscal stimulus during the last recession.
But at the end of 2007, the federal debt was 64.4 percent of the economy. Today, it is estimated at around 100 percent of gross domestic product, a share not seen since the aftermath of World War II, and there is little chance of lawmakers reaching consensus on additional stimulus that would increase the debt.
“There is no approachable precedent, at least in the postwar era, for what happens when an economy with 9 percent unemployment falls back into recession,” said Nigel Gault, chief United States economist at IHS Global Insight. “The one precedent you might consider is 1937, when there was also a premature withdrawal of fiscal stimulus, and the economy fell into another recession more painful than the first.”
The number of Americans using the government’s Supplemental Nutrition Assistance Program (SNAP) — more commonly referred to as food stamps — shot to an all-time high of 45.8 million in May, the USDA reported. That’s up 12% from a year ago, and 34% higher than two years ago.
The program provides monthly benefits to low-income individuals and families, which they can use at stores that accept SNAP benefits.
To qualify for food stamps, an individual’s income can’t exceed $1,174 a month or $14,088 a year — an amount that is 130% of the national poverty level.
The average food stamp benefit was $133.80 per person and $283.65 per household in May.
The highest concentration of food stamp users were in California, Florida, New York and Texas — where more than 3 million residents in each state received food stamps in May.
The rise in food stamp use comes as the U.S. job market continues to sputter, and food prices across the country climb.
S&P cut the long-term US rating by one notch to AA+ with a negative outlook, citing concerns about budget deficits.
The agency said the deficit reduction plan passed by the US Congress on Tuesday did not go far enough.
Correspondents say a downgrade could further erode global investors’ confidence in the world’s largest economy, which is already struggling with huge debts, unemployment of 9.1%, and beset by fears of a possible double-dip recession.
S&P said in its report issued late on Friday: “The downgrade reflects our opinion that the fiscal consolidation plan that Congress and the administration recently agreed to falls short of what, in our view, would be necessary to stabilise the government’s medium-term debt dynamics.
“More broadly, the downgrade reflects our view that the effectiveness, stability, and predictability of American policymaking and political institutions have weakened at a time of ongoing fiscal and economic challenges.”
The agency said it might lower the US long-term rating another notch to AA within the next two years if its deficit reduction measures were deemed inadequate.
Presidential birthday bashes are nothing new, but in the wake of a months-long debt battle and in the midst of an economy barely chugging along, some see President Barack Obama’s Wednesday birthday celebration coming at a terrible time.
“We’re nearing a double-dip recession. We’ve lost 125,000 jobs here in Illinois just since he took office,” Illinois GOP chairman Pat Brady said Tuesday.
Mitt Romney tweeted a campaign video painting a dreary picture of Chicago’s economy and the message, “@BarackObama celebrates his 50th bday & collects $35,800 checks but IL is struggling due to his failed policies.”
Still, there will be plenty of prominent Democrats who will find it in their schedule — and their pocketbooks — to attend the festivities.
And there’s no secret that the event at the legendary Aragon Ballroom in Uptown is a campaign fundraiser.
Tickets for Obama’s birthday celebration range from $50 for the concert to nearly $36,000 per person for a private dinner with the President.
The Labor Department says the unemployment rate rose in 345 large metro areas. It dropped in 20 cities and was unchanged in seven.
That’s worse than May, when the rate rose in only 210 cities and a sharp reversal from April, when unemployment actually fell in nearly all metro areas.
The biggest increase was in Joplin, Mo, which was hit by a major tornado on May 22. The city lost 9,400 jobs in June and the unemployment rate jumped nearly 2 percentage points, to 9.6 percent.
Nationwide, unemployment ticked up to 9.2 percent in June, the highest level this year.
You may recall the the CEO of Wal-Mart America who recently said “shoppers are running out of money, and there is no sign of a recovery.”
Now, according to Bloomberg:
“Visits to Wal-Mart Stores Inc. (WMT)’s U.S. locations open at least a year dropped 2.6 percent from February through June, according to an internal memo, while rivals are attracting customers.
Those Wal-Mart stores had 82.8 million fewer visits through the first five months of the company’s fiscal year than a year earlier, says the memo, which was obtained by Bloomberg News. Wal-Mart doesn’t disclose those traffic numbers, and David Tovar, a spokesman, declined to comment on the memo.
Wal-Mart’s plan to recapture customers by returning thousands of products to U.S. store shelves has failed to reverse a decline in foot traffic at the world’s largest retailer, said Jeff Stinson, an analyst at Cleveland Research Co. That’s primarily because Wal-Mart’s core low-income customers are shopping less and going to other retailers more often, according to two recent shopper surveys.
“The biggest issue remains weak store traffic,” Stinson wrote in a July 14 report. “We believe sales have slowed in the second quarter and are running below plan primarily due to further traffic declines.” The Cleveland-based analyst rates the shares “neutral.”
Wal-Mart, led by Chief Executive Officer Mike Duke, is restoring an average of 8,500 products to its stores to lure back shoppers still pinched by persistent unemployment and gas prices that have risen 36 percent in the past year. Sales in U.S. Wal-Mart stores open at least 12 months have declined for eight straight quarters.