Sequester Starving “Poor” Congressional Staffers

March 23, 2013 Leave a comment

According to Rep. Debbie Wasserman Schultz, sequester is starving Congressional staffers. It appears that one of the budget cuts affects taxpayer subsidies for staffers meals. Thus the Congressional building restaurants are being forced to raise prices. Schultz apparently thinks this is a winning issue that will get the American people all worked up. She’s right, the American people are worked up but not for the reasons she was expecting. The fact is, most of us don’t care if Congressional staffers can afford to eat lunch at the Congressional cafe or not. In fact, most of us find this whole argument Schultz is making offensive.

The staffers in Schultz office make between $60,000-160,000 a year. Yet we’re to believe they can’t afford a $2 bowl of soup for lunch or a $5 sandwich. Does anyone believe that staffers making that kind of money can’t afford a $7 stuffed chicken with mashed potatoes and asparagus? Those are the prices in the Congressional office buildings. Compare that with the average McDonald’s combo meal which costs over $6 in most locations. Schultz and the Democrats haven’t been particularly concerned about food costs for the average American, which have increased quite a bit in the last four years. Only when their staffers start whining do the Democrats suddenly care about the cost of food.

This is where Schultz loses the public and opens herself up for mockery. Staple food items have seen substantial price increases in the past few years. Corn is up dramatically, which means meat is up dramatically. Vegetables and other grains have also seen healthy price increases. Any housewife can tell you that they’ve either needed an increase in their grocery budget or they’ve needed to cut back or change products in order to stay in budget. None of the Democrats seem concerned with this problem at all. If anything they celebrate price increases because they think we’re fat.

Yet when price increases affect those immediately around them, suddenly Congressional Democrats are very concerned about price increases. So much so that they’re willing to blame Republicans for it. In this case, Republicans should gladly take responsibility for increasing prices on Congressional staffers. Taxpayers don’t need to subsidize staffer meals. In doing this, the GOP should turn the issue right around on the Democrats. The left wants to be the champion of the poor by handing them money. The GOP should attempt to champion the poor by calling the Democrats out for food price inflation.

We’re burning our corn crop in our gas tank, this is one of the biggest reasons for food inflation. The President’s fiscal policies have also caused price increases. Obamacare, regulation and Federal Reserve money printing have all contributed to food prices soaring in the last four years. The Democrats are completely uninterested in this issue, which directly affects the pocketbook of lower and middle class Americans. They’re too busy calling us fat and bemoaning price increases for Congressional staffers. For those of us in the middle class, wouldn’t we love to be able to buy a bowl of soup for $2? We just aren’t politically connected enough to have anyone care about our soup prices.

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Another Recession Is Right Around The Corner

November 16, 2012 2 Comments

The fiscal cliff is just around the corner. New jobless claims increased 78,000 last week despite Obama’s re-election. Inflation is on the rise. Poverty has increased. Europe is in a recession. McDonald’s is seeing their sales decrease. Don’t be fooled, this doesn’t mean people are eating more nutritious lunches or that they’re spending money at higher end restaurants like Applebee’s. (did I just say Applebee’s is high end? oy) It means that people can’t afford to eat at a restaurant that historically performs well during recessions. It’s not like they’re running over to Burger King or Wendy’s, their sales don’t make up for McDonald’s losses.

At least one restaurant chain owner is going to charge an Obamacare surcharge. We’re beginning to see what’s going to happen thanks to Obamacare. Taxes are going up for thousands of middle class families thanks to Obamacare. Businesses are cutting back on employee hours in order to not be subject to Obamacare. Many small businesses are making sure they don’t have 50 employees and thus aren’t subject to Obamacare. They’re laying off employees and refusing to hire. All of this while stocks are dropping into recession territory, the dollar is falling, unemployment is going up and historically strong companies are losing sales.

We face a major tax increase on January 1st. Odds are that Congress and the President aren’t going to agree on much, if so middle class families will see a major tax increase. Meanwhile high income earners are pulling their money from investments so as not to subject themselves to higher taxes next year. All of this money is going to be taken out of the private sector, furthering a brewing recession. Nothing can be worse for an economy in recession than removing money from the private sector. How does Obama and the Democrats think businesses will hire people if they have no money?

But of course that question assumes Obama and the Democrats care about Americans working. The last four years suggest that they really don’t. Obama won re-election on food stamps and welfare. Voters on food stamps account for nearly 75% of Obama’s votes. So let’s not pretend like Obama particularly cares about jobs. In fact, the fewer people who are employed the better it is for the Democrats. After all jobs, especially good jobs, remove people from the welfare and food stamp rolls and thus those voters are less likely to vote for Democrats. All you’ll see from the left is more food stamps, more welfare, more handouts and fewer jobs. It’s their pathway to re-election.

For the rest of us, we’re looking at a looming disaster. The middle class is facing thousands of dollars in tax increases on January 1st. If we don’t have health insurance, there are thousands of middle class Americans facing the Obamacare tax. Our jobs are threatened as our employers cut back with Obamacare and upper class tax increases looming. We have nowhere to turn. We make to much to go on welfare and we actually want to work, lessening our will to join the ranks of welfare recipient. The country is facing a disaster and we have a President who just doesn’t care. He doesn’t have to, welfare and food stamps got him re-elected. Not even his dismal economic performance could overcome the freebies the government handed out.

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The Obama Economy Is Not Booming

April 9, 2012 1 Comment

Last month’s economic news wasn’t very good. No doubt the administration will brag about the 8.2% unemployment rate. What they don’t want to talk about is the fact that nearly 88 million adult Americans aren’t in the work force. If someone isn’t in the work force, they aren’t considered “unemployed.” In other words, a record number of people are either retired, a housewife or have simply given up looking for work. It’s the latter that is driving the number higher on a monthly basis. In short, the only reason why the unemployment rate is down is because the government isn’t counting the unemployed who have given up.

The rest of the jobs report isn’t good either. After posting new jobs over 200,000 in February, March saw only 120,000 created. More people gave up looking for work than jobs were created. Economic forecasters had predicted over 200,000 created jobs in March. With the economy creating less jobs than anticipated, many seem to believe that the jobs market is getting weak again. Keep in mind, we would have to have three years of monthly job growth like February just to get back all the jobs lost in the recession. For March to produce just over half of what was predicted is disappointing. Not surprisingly, it’s led to a stock sell off this morning.

The economy is a mess right now and bragging about the unemployment rate is just putting lipstick on a pig. Gallup reports the underemployment rate at 17.8%, meaning more than one out of six Americans is underemployed. (ie, they want to work fulltime but cannot find 40 hours of work per week) Inflation is hitting big as gas prices have increased substantially to $3.90 a gallon. We can expect to see food and clothing prices increase in the next couple months as a direct result of increased gas prices. Big ticket items might not increase in price but the cost of day to day living is on the rise and has been throughout the Obama administration while wages remain flat.

Poor economic news really gives Romney an opening this fall. If the economy cannot pick up steam, Obama may be in trouble. He can win re-election with economic news like February’s. But he cannot win with months like March. At some point, Romney is going to make the case that the unemployment rate is a farce because it so many are excluded. The underemployed rate and the number of adults no longer in the work force are the better measures of employment. With inflation, low job growth, Romney has an opening. He can ask Americans if they’re better off than they were four years ago. For most at this point the answer is no.

We’re not even getting into Obama’s direct economic contributions such as the failed Stimulus, the massive debt incurred under Obama’s watch, the financial reform package which didn’t reform anything but made the cost of business increase, the effect of various regulations or the uncertainty created by Obamacare. This is Obama’s economy, just like it’s Obama’s budget deficit and Obama’s GSA spending wildly in Las Vegas.  Obama has not made conditions good for business. He’s created tax and health care uncertainty. His energy policy is costing us jobs and money. His regulations are costing businesses money, which is seen in job cuts and/or failure to hire more workers. Creating 120,000 jobs isn’t enough when we lost so many millions during the recession. The economy is his, the question is whether Americans are content with mediocrity and whether Romney can take advantage if Americans are not content.

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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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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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Osama May Be Dead But You Still Can’t Eat Your Ipad

May 3, 2011 Leave a comment

The euphoria of Osama bin Laden’s death is beginning to wane. Major events like war victory celebrations are fun for a day or two but ultimately the country and the world come back down to reality. In today’s fast paced, information centered world reality begins 36 hours after Osama’s death was announced. The reality we are looking at isn’t pretty.

President Obama ordered the attack that killed Osama but he continues to support al Qaeda and other radical Islamic groups in Libya. There seems to be a serious disconnect in the White House between killing Osama and supporting his organization and his interests in the middle east. Even with Osama dead, we still have three wars we’re paying for. Afghanistan continues to be a blood bath, much more so under Obama than Bush. Iraq isn’t nearly as stable as the administration claims. The Libyan war lacks purpose, direction and leadership. Osama may be dead but al Qaeda still exists and they still have an anti-American outlook, probably more so now. These realities don’t go away because Osama is dead.

Domestically the country is in quite a financial mess. An independent credit rating agency said the United States should have a C credit rating. We already know Standard & Poor’s downgraded the US debt outlook to negative last month. Meanwhile inflation is taking hold. Gas is up to $4.26 here in Michigan, with most stations charging $4.29. In Chicago gas is $4.35 a gallon. Food prices are up substantially while the value of the dollar has lost 17% over the last year. These are realities that don’t go away because Osama is dead.

There is a disconnect between Obama’s ordering of Osama bin Laden’s death and his pro-al Qaeda policies in Libya. There is also a disconnect between the Federal government and the Federal Reserve’s calculation of inflation and reality for most Americans. If we listen to the Fed, inflation isn’t on the upward swing because ipad’s haven’t gone up in price. In fact, we can apparently buy a fancier, new ipad for the same price as the old ipad. Therefore inflation doesn’t exist. This prompted one person to utter “I can’t eat my ipad.”

This statement highlights the disconnect between the Fed, the Obama administration and reality on the ground for middle class Americans. Sure, ipad’s haven’t gone up in price. But then, tech gadgets usually don’t increase in price in fact they usually decrease. People don’t buy tech gadgets on a regular basis, but they do buy food, gas and clothing on a regular basis. All of those prices are up substantially. Gas is up over $2 a gallon since Obama took office. Corn has more than doubled in price, causing meat, cheese and milk prices to increase substantially. Cotton has more than doubled in price, meaning our clothes are now more expensive. So who cares if ipad’s and tech gadgets haven’t gone up in price when we can’t afford another gallon of milk or another pound of butter?

These realities don’t go away because Osama is dead. We still have millions of unemployed. Just a couple of weeks ago nearly a million people applied for 50,000 McDonald’s jobs. In Chicago over 80,000 applied for 2,000 of those jobs. It’s great that McDonald’s is hiring but the large number of people but it’s a little disturbing that there are so many unemployed Americans who have little choice but to apply for a bottom of the barrel job. It says a lot about what the administration has done to the economy. There hasn’t been a recovery at all, things have gotten worse.

Osama’s death doesn’t change much of anything for those of us struggling to feed our families. The Obama administration remains anti-business and the Fed and Federal government continue to mislead about inflation. Osama may be dead but you still can’t eat your ipad.

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Consumer Confidence Declines as Inflation and Uncertainty Increase

April 28, 2011 Leave a comment

Inflation is surging and the economy is growing at an abysmally poor rate. The economy only grew 1.8% during the first quarter, far lower than the 3.1% it grew in the 4th quarter of 2010 and lower than the 2% some economists expected. Jobless claims surged 25,000 to 429,000 last week. Meanwhile inflation is killing the middle class, growing at 3.8% during the first quarter. Considering the massive increase in gas and food during the first quarter, it’s safe to say that real inflation is actually much higher.

Consumer confidence is tanking. Just over a quarter of the country believes the economy is picking up, I suspect most of those people live in DC. Over half the country believes we’re either in a depression or recession. When consumer confidence is this low, people stop buying products which negatively affects the economy. It’s really a self fulfilling prophecy of the worst kind. It’s clear the public has lost all confidence in Obama’s economic policies and the end result is that by not buying consumer goods the economy is just going to get worse.

Wal-Mart says their shoppers are running out of money. Who are Wal-Mart shoppers? The lower and middle classes. Why are they running out of money? Because gas prices are skyrocketing and food prices are up substantially. Because inflation is hitting the lower and middle classes the hardest, it should come as no surprise when Wal-Mart complains that their shoppers are running out of money. It’s a sign that the economy is in much worse shape than the gaudy magnificos in DC and Wall Street claim.

Obama’s economic policies have been a disaster for the middle class. Obamacare has caused health insurance premiums to rise by nearly 25% since last year. The added costs are being passed onto employees, who now have less money to spend on consumer goods. Obama’s energy policy has created $4.19/gallon gas here in Michigan as of today. Obama’s response is that we should buy fuel efficient vehicles but I wonder how he supposes we can afford those overpriced green cars that cost $41,000 when we cannot afford to buy butter and milk. Obama’s energy policies have directly led to the increase in gas prices (coupled with the Fed’s inflation of the money supply), which is something Obama and the left have wanted for years. The left wants high energy costs to force Americans into buying inefficient and expensive green energy. Such energy policies only hurt the American middle class.

We’re burning our food supply to make corn ethanol. How insane is that? Ethanol is an inefficient gas product made from corn which requires more energy to produce than it gives off as a finished product. Corn throughout the midwest is being sent off to ethanol plants to be turned into gas while the price of corn skyrockets. Corn is a necessary food for livestock, which is why meat, butter, milk and cheese have increased in price substantially. Once again, another left-wing big government policy hurts the middle class.

Meanwhile the Fed is printing money like crackpot basement counterfeiters. Is it any wonder that inflation is killing consumer confidence? Is it any wonder that the economy cannot grow? The uncertainty created by the Obama administration is not unlike the business uncertainity that plagued the country during FDR’s reign in the 1930′s. The New Deal did nothing to cure unemployment, it was just as high in 1933 as it was in 1939. The economy actually got worse during FDR’s second term. It looks a lot like what is going on now. The uncertainty created by Obamacare coupled with anti-business regulations and Fed money printing are killing the economy. Who would invest in business with uncertainty created by government?

The country is in for a rocky year or two. Inflation isn’t going away, in fact it may get much worse. Obamacare isn’t going away until at least 2013. Obama’s absurd green energy policies are not going away. I fear that high gas and food prices may be here to stay. It’s killing the middle class and unfortunately the Obama administration doesn’t seem very interested.

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Here Comes Inflation: Wal-Mart Predicts Substantial Price Increases in June

March 31, 2011 Leave a comment

Wal-Mart CEO Bill Simon says inflation is going to hit hard beginning in June. Simon claims that prices will begin rising dramatically, though he doesn’t say what markets will be affected the most. We can only presume he’s speaking about markets that Wal-Mart sells a lot of such as clothing and food. This isn’t a surprise to folks who pay close attention to commodity markets. Cotton prices have doubled in the last year, corn us up 75%, meat is up 25-50% depending on animal, butter is up 25% etc.

Meanwhile gas prices have doubled since Obama took office. Gas prices averaged $1.79 when Obama took office, they now average $3.58. Here in Michigan gas is around $3.69, in California it’s over $4.00 a gallon. I’ve seen diesel for $3.99 in Michigan, which means transportation costs are through the roof. Gas prices, particularly diesel, are going to lead to the price increases Wal-Mart is concerned about. Today oil is over $106 a barrel, the highest it’s been since Obama took office. If that price holds, gas prices will go even higher.

I have been concerned about inflation since Bush’s bailout in 2008. The Bush bailout and the Obama stimulus helped launch this country into a massive budget deficit. Obama has done nothing to cut the deficit, in fact Democrats are busy declaring that Republican desires to cut a measly $40 billion from the budget are “extreme.” Worse, the Fed is busy printing money like cut rate counterfeiters. That’s what’s really killing us. For each dollar they print, the money we earn each day becomes worth less. This means we can buy less with our money when prices rise.

Obama is clearly uninterested in inflation, he’s barely discussed the matter at all. I said a couple years ago that inflation would be the biggest issue in the 2012 election. Don’t be surprised if it is right up their with jobs. Obama has ignored this problem, going so far as to pretend it doesn’t exist. Those of us who go to the grocery each week have watched inflation in action over the last year as prices for just about everything have increased substantially. Everyone has seen the price of gas increase dramatically over the past year.

What is the solution to this inflation mess? First, the Fed has got to stop printing money. The Fed has printed billions over the past two years and it’s negatively affecting prices and making savings worthless. Second, government needs to make substantial cuts in spending. Their out of control spending is part of the reason why the Fed is printing money, those two issues go hand in hand. Third, government needs to cut taxes so that the costs of inflation are offset for the middle class and in fact for all taxpayers. Fourth, government needs to reduce regulations, especially on small businesses. A reduction in regulations, including the simplification of the corporate tax code, will spur the economy and ultimately offset inflation for most Americans. Fifth, Obamacare needs to be repealed.

Instead of doing what I suggest, Obama will continue to propose more government intervention in the economy. He’ll create more boogy man  bad guys like those wicked oil companies or the banks or Wall Street or pick your big business that doesn’t donate to Democrats. Those tactics, which Obama has employed for years, will not halt inflation and will not help the middle class. More government planners dictating the economy from on high in DC will not fix inflation and will not make things easier for the middle class. Only a reduction in government and stopping the Fed printing press will halt inflation and make things stable for us in the middle class.

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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 , , , , ,

Unemployment Claims, Food and Energy Costs Going Up

January 13, 2011 1 Comment

New unemployment claims rose last week unexpectedly to 445,000 from 410,000 last week. The economy hasn’t gotten any better over the last year. Unemployment dipped slightly last month but only because hundreds of thousands of workers stopped looking for jobs and are no longer considered part of the job market. Obama’s stimulus failed miserably.

Meanwhile inflation is being to show itself in several different markets. While the Federal government declared that inflation was just .2%  in December, they conveniently leave out energy and food costs in their inflation determination. Food prices are up substantially over the past year. Butter and milk are up substantially. Sugar has nearly doubled in price in the last two years. Corn is up 52%, which means meat prices are on the rise. Overall, food prices are up 25% in 2010. Energy costs are also on the rise as we saw gas prices over $3 in December, which is highly unusual. Gas prices usually drop during the winter as demand weakens, this year gas prices increased.

The economy hasn’t gotten any better under Obama and the Democrats leadership. In fact the economy has gotten worse. Wasting $800 billion on Obama’s Stimulus did nothing but stimulate the national debt. Having the Federal government post yearly deficits over $1 trillion the last two years has done little more than discourage investment and job creation. The national debt has made the dollar a risk.

It is clear that Obama and the Democrats failed to fix the economy with all of their spending and regulation. The Republicans unfortunately are unable to right the ship with less spending and regulation across the board. They can throw a wrench into Obama’s spending plans, albeit from all accounts a small wrench, but they can do little to curb the administration’s thirst for more market controls. The end result is that the economy is going to move very along very slowly. With food and energy prices going up, the middle class is going to feel the pinch of inflation over the next year or two. We can only hope and pray that the Republicans pick a conservative capable of winning in 2012. The country can’t afford four more years of Obama’s malaise.

Filed under economy, Obama, Politics, unemployment Tagged with , , , , , , ,

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