How Inflation and Contraception Go Together

March 13, 2012 2 Comments

The media is boasting at the supposed economic recover. We’re to be excited about 250,000 or so new jobs. That’s great and all but we would need three years of 250,000 new jobs every month just to get back to the level of employment we had prior to the recession. The Obama administration unemployment figure of 8.3% is artificially low as they “seasonally” adjust rates to suit those in power and throw millions of Americans who have given up finding a job out of the ranks of the unemployed. The truth is that the economic recovery is very weak.

The biggest problem with the economic recovery, besides the fact that it is so slow, is inflation. Listen to the government and they’ll tell you that the inflation rate is 3.1%. They figure this number with a basket of goods that doesn’t include volatile products such as gas and food. In other words, they figure inflation by leaving out the things that hit middle class families the hardest.

If we were to figure inflation by looking at more than big ticket items like cars and houses (which with recent price drops keeps the government number artificially low) and instead looked at food, gas and other basic household expenses we would see the inflation rate is really 8.1%. Combine the government number and the volatile goods rate and we come up with an inflation rate of 5.6%. Since families buy both everyday goods and big ticket items, this number isn’t an unreasonable reflection of the current inflation rate.

When Obama runs for re-election he isn’t going to be running on the price of cars or homes. He’s going to be running against gas prices and food prices, which coupled with salary stagnation have reduced the quality of life for the average middle class family. Whether the Democrats like it or not, people are going to pass buy a gas station on their way to vote and if prices continue on the path they’re on now it won’t be good for the President. Gas prices averaged over $3.50 in 2011. They’re already approaching $4.00 this year and we haven’t even hit the heavy driving season or the government created cost increase also known as the summer blend. That doesn’t bode well for the President.

Gas isn’t the only commodity that has increased in price over the last few years. Meat, corn, wheat and rice have all gone up substantially. As such the price of making burgers for dinner is increased, cereal prices have increased substantially and the price of milk has increased by as much as a third in the past couple years. No wonder Obama is losing women voters. The real inflation rate perhaps explains why the administration is making up issues such as the contraception issue. They’ll do anything to deflect women’s attention away from the prices at the grocery store.

Polls for Obama have gone down over the past few weeks. They coincide with a substantial increase in gas prices. Obama was in perfect position a month ago. The GOP is fighting, no one likes any of the candidates. While the GOP candidates fight like children, Obama suddenly looked Presidential in comparison. Economic numbers were slightly improving, which helped him. The bottom has fallen out because of gas prices but there were warning signs in Obama’s poll numbers all along.

Lurking in the background was a female problem. Seeing the real inflation rate tells us why Obama was having trouble with them. Women do more grocery shopping than men, they see the price increases at the store while men often only see gas pump prices. Obama’s numbers among women have been down for awhile now. It’s clear why Obama made a desperate attempt to turn contraception into an issue. Obama cannot afford to lose women and he’s losing them right now because women are fed up with milk that costs over $3 a gallon. Inflation could be the issue that silently destroys this President.

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Gas Prices Skyrocket Thanks To Obama’s Failed Policies

February 29, 2012 Leave a comment

Gas prices have risen to $3.73 per gallon on average throughout the United States. If this isn’t the highest price seen in February it’s awful close. We haven’t even hit the summer blend season yet, wherein the government mandates price increases through ineffective additives added to gas. Obama’s energy policy has been a complete and total failure. Gas prices have doubled since Obama took office.

We have an unstable economy, which is teetering on recession despite the wild eyed claims of recovery. Orders for durable goods plunged 4% in January. Shipments of capital goods are down 3%. These are important figures because they suggest that manufacturers are not investing in new equipment, which suggests they don’t believe there is any profit to be made in the future.

Which gets us back to gas prices. The one good that can create havoc in our economy  is the price of gas. When gas prices increase the cost to ship goods increases, which means we see an increase in consumer prices. When gas prices increase two things happen to consumers. First, they don’t have as much money to spend and second they make less shopping trips. The end result is that when gas prices increase there is less consumer spending, which stalls the economy.

Obama’s energy policy has aided the increase in gas prices. Obama has decreased Federal oil and gas leases by 70%. He’s made 85% of offshore oil off limits. He won’t drill in Anwar. He rejected the Keystone Pipeline, which would have brought millions of barrels of Canadian oil to the United States. While Obama has made drilling for oil more difficult, he’s passed off billions of tax dollars to politically connected green energy companies like Solyndra. He’s spent billions on coal powered cars. (how do you think we get electricity in this country?)

In short Obama has wasted billions on politically connected companies that make Obama’s far left environmentalist constituents happy all while refusing to allow the nation to drill for more oil. In doing this, Obama has ensured high gas prices because we cannot increase the supply of oil. Gas is $3.83 two blocks from my office, it’s a wonderful reminder of Obama’s energy policy. It was in the $1.75 range when he took office.

It isn’t just Obama’s energy policy that is coming to play here, his foreign policy has been a disaster for gas prices as well. Iran is cutting off oil supply to Europe and they’re playing games in the Straits of Hormuz. The result of restricted supply and threats of further restricted supply have resulted in higher oil prices. Obama’s failure to properly deal with Iran has only made matters worse for gas prices.

Obama campaigned in 2008 as a candidate who would be weak with Iran and he’s governed that way. It’s one of the few promises he’s kept. Unfortunately Obama’s weak hand has emboldened Iran, who now believes they can threaten to close the Straits of Hormuz without repercussion. With Obama in the White House, they’re probably right. Obama’s recent apologies over a meaningless Koran burning in Afghanistan only fuel countries like Iran. Obama’s weakness in apologizing for an accidental Koran burning emboldens Iran to take the next step. Obama has never understood (or perhaps has never cared) that the slightest American weakness internationally is an invitation to tin pot dictators to challenge us. Iran is taking full advantage of Obama’s weakness.

Gas prices likely won’t be getting better soon. Iran has no reason to back down, especially when they can inflict pain on the American people without facing any consequences from our government. Rather than issue permits for oil drilling or signing drilling leases for Federal lands, Obama would rather waste tax money on inefficient green energy. Obama would rather gas prices move above $4 than give up his dream of a coal powered car in every garage. When you look at the price of gas at the station closest to your home or workplace, remember it is Obama’s policies that have led to it being so high.

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Economy Weak Thanks To Obama’s Policies

May 5, 2011 Leave a comment

World food prices are on the rise. Here in the US, corn has nearly doubled in price in the last year. Wheat is up 57%, soybeans are up 39%. These are staple grains that affect the price of nearly everything we buy. Over the last year, meat and milk are up 25%. Everyone knows gas has doubled in price since Obama took office. Inflation is killing the middle class, while job creation is at best slow. The dollar continues to slide, creating more inflation and more difficulties for the middle class.

Meanwhile 1 in 7 Americans are on food stamps, which is an absurdly high number. By subsidizing food for that many Americans, the government is artificially driving food prices up. This of course only makes it more difficult the lower middle class to afford food, which drives more people to food stamps. The Federal and state governments are facing massive deficits, taxpayers can no longer afford to subsidize food for so many people. Worse, food stamp fraud has become a serious problem in many parts of the nation. Food stamp welfare has grown so much that the government is having trouble keeping track of where all the money is going.

Unemployment numbers come out tomorrow, though government declared unemployment is usually much lower than real unemployment. Gallup shows unemployment down to 9.4% while underemployment sits at 19.3%. Official government unemployment is “seasonally adjusted” meaning they don’t count real unemployment. There were allegedly 179,000 jobs created in April, far less than the over 200,000 they expected.

It’s been pretty clear that the job market isn’t all that great for some time. Last week jobless claims rose by 43,000.  There are far more people looking for work than jobs available. McDonald’s hired 62,000 people in April, meaning that the rest of the economy barely created 100,000 jobs. Over 1,000,000 people applied for those 62,000 jobs, which says a lot about how poor the economy is right now. In Detroit, hundreds of unemployed and underemployed people showed up for a fake jobs fair.

It is clear that the Obama administration’s policies have failed. Obama’s stimulus bill did nothing to stimulate the economy. Billions in bank and company bailouts have left the nation with massive debt and not much to show for the expenditure. Obamacare has stunted job growth by creating absurd paperwork requirements and adding massive costs to hiring new workers. Obama’s regulations have cost jobs and the threat of more regulations have created market uncertainty which has stunted job growth. Obama is threatening to write Cap & Trade into regulatory law, bypassing Congress. This threat has stunted job growth because employers are faced with uncertainty. This administration wants to regulate carbon dioxide as a dangerous toxin and we sit around wondering why the economy doesn’t pick up.

The solution to this mess is simple. First, the Fed has to stop printing money. This will ease inflation. Second, Obamacare needs to be repealed. This will aid small businesses in hiring more workers. Third, regulations need to be slashed so that businesses can start creating jobs again. Fourth, corn ethanol needs to be cut from the Federal budget. We should not be subsidising this product, which has only increased the cost of food and been a massive waste of money.

The key is that government needs to step back and stop trying to control the economy. Obama wants a centrally planned economy, which should come as no surprise considering that he is a socialist. So long as Obama wants to control the economy from DC, the economy isn’t going to get any better. FDR pulled the same stunt during the 30′s and unemployment was higher in April 1939 than it was when FDR took office in 1933. But for new markets opening up in Europe for war goods and our eventual entry into WWII, the depression wouldn’t have ended with FDR in office. Obama is much the same as FDR. His policies are creating a prolonged recession and no recovery.

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Obama Busy Not Negotiating With House GOP; Shutdown Looms

April 7, 2011 Leave a comment

President Obama has pledged to veto a one week budget extension should it reach his desk. This will effectively shut down the Federal government. This whole situation is surreal. The GOP has proposed a measly $60 billion in cuts, the Democrats are apparently on board for $33 billion in cuts. The difference is less than $30 billion yet the President and the Senate Democrats accuse the House GOP of proposing “extreme” cuts. Apparently Obama is willing to shut down the Federal government over these “extreme” cuts. It’s so absurd as to be amusing. Especially so considering the $1.6 trillion deficit the budget already has.

Meanwhile the President, who has spent the better part of the week not negotiating with the GOP on the budget. weighed in on gas prices. Nationwide gas is averaging around $3.70, which is nearly $2 more than it was when Obama took office. Here in Michigan gas is $3.83 and most believe it will be $3.99 by the end of the week. So what does Obama have to say about gas prices? Rough tough cream puff is essentially what he had to say. He claims we’re seeking energy independence, yet he just handed a major Gulf drilling contract to Brazilian state owned Petrobras. His suggestion for those of you who are whining about high gas prices is to trade in your vehicle. Apparently Obama believes that the only people complaining about high gas prices are folks with cars that get 8 miles a gallon. How much more out of touch can this man be?

Obama spent yesterday pandering to Al Sharpton rather than negotiating with the Republicans. He declared at a Sharpton event that education is the civil rights issue of our time. I take great issue with declarations like these. Education is not a right. Our rights come from God not from government. God has not granted us a right to an education just like he hasn’t granted us a right to healthcare. God provides us with inalienable rights such as life, liberty and property. Government provides us with revokable rights, revokable at their good pleasure. What’s even more absurd about Obama’s statement is that he has worked against charter schools in the DC School district. The DC school district is almost 100% black. It’s one of the worst in the country. During the Bush years charter schools and/or vouchers were created to give parents more options. The program was very successful, it provided many black students an option out of the failing DC schools. Yet Obama got rid of that program, thus hurting the black people he’s pandering to at a Sharpton event. So much for education being a civil right. Of course, Obama’s kids are at a very expensive left-wing private school. Choices for him, none for the poor blacks of DC.

 

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Gas Prices Soar; Obama Works Against Middle Class

March 7, 2011 Leave a comment

Gas prices continue to rise. In two weeks the price of a gallon of gas has increased by 33 cents to $3.51/gallon. Some forecasters predict it could soon hit $3.75/gallon or even more. The American middle class is feeling the hit from this dramatic increase in gas prices. Since June of last year gas prices are up almost a dollar per gallon. This hits the middle class the most because we are the most sensitive to price changes and we rely the most on our cars.

Several years ago when oil prices skyrocketed President Bush eased supply issues by opening up the strategic oil reserve. This caused prices to decrease and stabilize, which was a great benefit for middle class consumers. What is President Obama doing to ease the hit on the middle class? He’s busy fighting a court order forcing the administration to issue new drilling permits in the Gulf of Mexico.

That’s right, during a major oil crisis the President is refusing to issue permits for more American supply. Rather than ease American dependence on foreign oil, the President is making us more reliant by refusing to allow more drilling. This administration hasn’t issued a new drilling permit in nearly a year and they’re fighting  hard against a court order that orders the administration to issue new permits. Couple this with the administration’s continued refusal to allow new drilling in Alaska, South Dakota and elsewhere and the picture is pretty clear. The Obama administration is hostile to the middle class.

President Obama talks in fanciful, dreamy language about wind power and electric cars. All of this is complete nonsense. Wind energy isn’t cost effective and it’s unreliable. The nation isn’t going to be powered by wind. As for electric cars, the Chevy Volt, produced with millions in tax subsidies, is overpriced and inefficient. From all accounts sales are less than 1,000 so far. The Volt is the perfect example of why government subsidies don’t work because they don’t consider market forces. That of course doesn’t stop the Obama administration from hailing the Volt.

Gas prices are hitting hard in the pocketbook of the American middle class. For each dollar the price increases, US consumers spend $156 billion more on gas each year. This translates to $156 billion less spent on other consumer goods. It also translates into over $100 billion sent overseas because Obama and the Democrats refuse to allow drilling here in the United States. Price increases on gas don’t affect the rich and they affect the poor less because they tend not to depend on automobiles. But for the middle class, these price increases seriously affect our way of life. They seriously affect our individual freedom.

So what can government do to relieve the pressure on the middle class? First, government can get out of the way and allow drilling in the Gulf of Mexico, Alaska, South Dakota and elsewhere in the US. Government intervention in the oil market has caused prices to remain high, by allowing the free market to work prices will decrease. Second, the government can eliminate costly summer gasoline blends, which will cause the price of gas to rise 10-20 cents more come May. Third, governments can reduce taxes on gas, which would provide immediate relief at the pump. Here in Michigan we’re spending over 50 cents per gallon in tax between Federal and state gas taxes and state sales taxes. That represents 50 cents per gallon that could be spent on other consumer goods rather than government.

I of course don’t expect our socialist government to even consider proposals that will reduce the cost of gas. The Obama administration has no concern for the middle class and will no doubt continue fighting against new oil drilling. Because the administration is dominated by environmentalist leftists they won’t even consider eliminating wasteful and ineffective summer gasoline blends. As for taxes, if there is one thing government never eliminates its an excise tax. The end result here is that the middle class will continue to see our quality and way of life diminish while the Obama administration does nothing. On election day next year don’t ever forget that the Obama administration spent four years actively working against the middle class.

Filed under economy, inflation, Obama, socialism, Taxes Tagged with , , , , , , ,

Real Unemployment 10.3%; Massive Inflation Looms

March 4, 2011 Leave a comment

While the Obama administration may spend the day boasting about the unemployment rate dropping to 8.9%, it’s important to take a closer look at the numbers and a closer look at the economy as a whole. Gallup currently shows unemployment at 10.3%. Why is there a difference? When people give up looking for work the government no longer considers them unemployed while Gallup still counts them as unemployed. This is why Gallup’s number is more accurate than the governments, they include everyone. You can see where the government would have incentive to manipulate numbers by not counting people without jobs as unemployed. That was the case just a few months ago when unemployment dropped .4% without any relevant gain in new jobs.

When we look at the rest of the economy it is clear the recession is still continuing and it may even get worse. Gas prices are averaging $3.43/gallon and oil is over $100/barrel. Gas prices are up 50 cents in the last three months. If these prices remain high over a long period of time, it’s going to make a significant dent in the economy. Consumer goods and services will be the hardest hit as consumers will have less to spend at stores. Higher gas prices mean higher shipping costs, which means the price of everything from food to clothing will rise in price. Any rise in price means we can buy less with the dollars we have. If people buy fewer goods, long term there will be fewer jobs. The consequences of a gas price increase won’t be seen in the Feb. unemployment numbers but if they stick around they will be seen in the coming months.

The UN declared that world food prices have increased to all time highs. Corn prices are around $7.20 per bushel and increased 2% yesterday. Wheat prices are up well over 50% in the last year. The price of cotton doubled in the last year. The price of beef is up 25% since 2009. For a change it appears that the UN is correct, food prices are rising quickly. This has been going on since last summer. I’m sure you’ve seen prices increase at the grocery store lately. When food prices go up, more of our income is spent on food which means we have less to spend on other consumer products. Long term, this is going to be very negative for the economy.

It’s great that the economy is picking up again. Some of this is thanks to the tax consistency created when Congress extended the Bush tax cuts. For at least a couple of years businesses and investors have a measure of tax certainty and can plan accordingly. But there are dangers looming. The housing market is still depressed, manufacturing is still slow to recover and inflation caused by the Fed printing money is making the value of our salaries decrease.

Not everything in our economy is sunshine and flowers right now. We still have a real unemployment rate over 10%. Food prices are rising substantially as are gas prices. Oil prices threaten to make everything cost more, while the Fed continues to print money like a basement counterfeiter. Jobs are picking up, which is great. But inflation is beginning to take its toll on the pocket book of the middle class. By the end of the year the big issue in the mind of voters will not be jobs so much as it will be inflation.

Filed under economy, inflation, jobs, Politics, unemployment Tagged with , , , , ,

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