By Michael Whipple, Editor usACTIONnews.com

As more workers stop filing or run out of benefits they are no longer counted as “unemployed” for the unemployment rate. So as the economy worsens we are actually seeing the rate drop a few tenths of a point which is heralded with great delight in the Obama campaign.

Some are retiring early or signing up for disability benefits. Some just work for cash or struggle in home based enterprises to make ends meet.

Heidi Shierholz of the Economic Policy Institute in her analysis of the BLS jobs report January 6th 2012:

“Two years ago, in December 2009, the unemployment rate was 9.9 percent, and it is now 8.5 percent. How much improvement does that drop actually represent?  Given weak job prospects, many would-be workers dropped out of (or never entered) the labor force over this period, a trend that reduces the measured unemployment rate but does not represent real improvement in employment.  If the workers who comprise the drop in the labor force participation rate (from 64.6 percent to 64.0 percent) over the last two years were counted as unemployed, the unemployment rate would be 9.5 percent now instead of 8.5 percent.” [emphasis added]

The number of people working is at a low not seen since 1981. The recently released Congressional Budget Office (CBO) report on the economy showed that if the workers that have left the rolls were counted the unemployment rate would be 10%. The jubilation of the Obama campaign press over a miniscule drop in the rate is great for campaign speeches but the reality is much grimmer as the report points out:

Participation in the Labor Force. The unemployment rate would be even higher than it is now had participation in the labor force not declined as much as it has over the past few years. The rate of participation in the labor force fell from 66 percent in 2007 to an average of 64 percent in the second half of 2011,  an unusually large decline over so short a time.

Had that portion of the decline in the labor force participation rate since 2007 that is attributable to neither the aging of the baby boomers nor the downturn in the business cycle (on the basis of the experience in previous downturns) not occurred, the unemployment rate in the fourth quarter of 2011 would have been about 1¼ percentage points higher than the actual rate of 8.7 percent. [emphasis added]

Thus the “real” unemployment rate is almost 10%. The report also shows that increased taxes in 2013 that are already law will have a further negative impact noted as a “dampening effect”:

By CBO’s estimates, the rate of labor force participation will fall to slightly above 63 percent by 2017. The dampening effects of the increase in tax rates in 2013 scheduled under current law and additional retirements by baby boomers are projected to more than offset the strengthening effects of growing demand for labor as the economy recovers further.

CNBC’s Rick Santelli came to basically the same conclusion:

No wonder fears of an economic collapse top a survey of what Americans worry about:

Maybe that is also why so many fear four more years of Obama:

U.S. News reports on Synovate eNation Internet poll conducted December 29-January 2 that shows 33% of Americans fear four more years of Obama. Only 16% are afraid of Obama losing in 2012.

“in results backed up by other polls, older Americans and those earning $75,000 or more are especially worried about the president getting a second term, according to the poll done by Synovate eNation.

Nearly half of Americans 65 and older said Obama’s reelection was their top fear, 39 percent of those making $75,000 or more agreed.”

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By Frank Keegan

frankkeegan@statebudgetsolutions.org

Cross posted at Franklin Center for Government & Public Integrity

Senator Jim DeMint discusses earmarks, term limits, and corporate welfare on CNBC’s Kudlow Report. The Democrat majority in the senate continues to block efforts to eliminate corporate welfare in the energy industry and a ban on earmarks.

“I don’t think we’re going to get it done this year with this president. While he talks about it, we’ve never gotten a Democrat to support  any form of tax reform that I’m aware of. They just like to complain about it.” -DeMint

“So as I get this picture, we are in a heap of fiscal trouble, on the edge of bankruptcy, the economy is badly performing, the jobless rate is too high and what i’m hearing is NOTHING. Nothing. No Simpson-Bowles, no corporate tax reform, no end to corporate welfare, no end to corporate cronyism, no end to earmarks. This is why you see these polls running against congress as high as those polls are. I just don’t understand it.” – Larry Kudlow

By Daniel J. Mitchell at Forbes.com

EXCERPTS:

Let’s start with the GDP data. The comparison is striking. Under Reagan’s policies, the economy skyrocketed.  Heck, the chart prepared by the Minneapolis Fed doesn’t even go high enough to show how well the economy performed during the 1980s.

Unfortunately, the jobs chart is probably even more discouraging.

Writing in today’s Wall Street Journal, former Senator Phil Gramm and budgetary expert Mike Solon compare the current recovery to the post-war average as well as to what happened under Reagan.

If in this “recovery” our economy had grown and generated jobs at the average rate achieved following the 10 previous postwar recessions, GDP per person would be $4,528 higher and 13.7 million more Americans would be working today. …President Ronald Reagan’s policies ignited a recovery so powerful that if it were being repeated today, real per capita GDP would be $5,694 higher than it is now—an extra $22,776 for a family of four. Some 16.9 million more Americans would have jobs.

FULL ARTICLE

by Michael J. Hurd, Ph.D.

Several months ago, Obama referred to what he considers the essence of America: He said, “This sense of mutual responsibility – the idea that I am my brother’s keeper; that I am my sister’s keeper – has always been a part of what makes our country special.” Actually, this isn’t true. You can agree or disagree with Obama that being your brother’s or sister’s keeper is the right moral approach. I profoundly disagree. But regardless of where you stand on that issue, America is not the only place where people take care of each other. People take care of each other in all kinds of countries. Unfortunately, in many countries people don’t take care of themselves. This is what made America stand out. In America, especially in the beginning and to some extent still today, people take care of themselves. It’s their operating premise. “How can I survive?” Not, “Who will take care of me? Who will rescue me?” But, “How can I make myself and my loved ones safe, warm, comfortable and happy?”

America was, to my knowledge, the only society in history where each generation expected the next generation to do better. That expectation is still there today. But if the budget crisis and recession continue — as everyone from the Federal Reserve Chairman on down says they will — then it’s possible, for the first time in American history, that the next generation will not do better than the present one. In fact, on our current course — set by Obama and questioned by all too few — that’s where we’re headed.

A society in which people take care of each other is not the essence of a great society. Obama’s world is one in which there are soup kitchens, hospital beds and people are huddled together, ecstatic that they have each other to care for. It’s called, “Misery Loves Company.” This is fine for Obama, who, with his family, lives comfortably as is the lot of all rulers in a society run by the principle of government-imposed caring. “Why, he’s our great leader who cares about those who have the least. He deserves to live well.” Yet if somebody lives well off their own achievements and efforts — they’re evil and horrible. And this is morality?

Obama, like all the socialists who came before him and who will follow him, misses the point. They fail to see that production and freedom are the only things that make caring possible.

If you’re going to look at things from a social point-of-view, you have to ask yourself: “What principle of human behavior, if everyone followed it, would lead to the best results for the individual, as well as for everyone in general?” Of course there’s no one principle that everyone is going to agree to follow. But if they did, which one would lead to the best results?

There’s no question: Freedom. Freedom not to just have abortions and choose your sex partners, but freedom of economics, too.

When people are left free and self-responsible to care for themselves, they will achieve the best they can possibly achieve. Those who achieve more are free to care for anyone they want. People are free to try and mooch off of others, and people are, in turn, free to let others mooch off of them. Government, in a free society, will not be sponsoring or requiring any of this mooching or underachieving — but people are still free to engage in it.

There’s nothing in freedom, which Obama and his ilk so dislike, to prevent caring, including how one defines caring. But the moment you make caring the standard, the end-all and the be-all of existence, then you create a world where poverty and stagnation are the inevitable outcome.

Liberals like Obama are big on not making government the sponsor of morality. Yet by telling people they are their brother’s and sister’s keepers, and using government policy as a way to impose this definition of morality, they are merging morality and state in the worst possible way. The naive people who support Obama because “he supports gay marriage” (by the way, he doesn’t) or because “he supports freedom of choice” don’t appear to recognize that he’s the biggest imposer of morality (his definition of morality) that has ever occupied the Oval Office.

I don’t care if most people don’t question Obama’s attitude about morality. I know for a fact that most people don’t practice it, because it’s insane. Obama has the luxury of claiming to practice it because he has never really worked in the private sector and has spent his whole short career just being adored for the symbolism he inspires (in some). Even if he’s out of office in one term, he and his family will be well taken care of by the 54 percent who do pay income taxes, plus the book sales and other royalties that come from an adoring intellectual and media establishment. Sure, it’s easy for Obama to be the prince of brother’s and sister’s keeperism. What about the rest of us who must work for a living? And the more we succeed at working for a living, the more the government forces us to pay into programs which purportedly take care of other people. I repeat: This is what passes for morality?

Great people don’t become great by taking care of others. While it’s true that great, accomplished people are usually generous and seek to help out people who have difficulty through no fault of their own, this isn’t what makes them great. Helping is not what makes you great. You’re great because you’re capable, you’re competent and because you persist and apply yourself in life. Because of your success, you’re therefore able to help anyone you want, or nobody if that’s your preference.

Obama’s morality says that you’re only great if you help others. If this is true, then we don’t need any iPhones, computers, high-definition televisions, nice automobiles, medical technology or anything else. All we need is each other, to live in one big collective, miserable swamp. Obama is clearly doing everything he can to keep the economy from growing, and to keep people as dependent on the government for as long as possible. In a paranoid kind of way, it’s tempting to think this is his intention. I don’t think he’s that smart. What I think is that he genuinely believes in the approach to morality he seeks to impose on us all. And in the process, we’re giving up self-sufficiency and excellence for the sake of creating one big, gigantic soup kitchen.

By Peter Ferrara at American Spectator

EXCERPTS:

The Obama SOTU exhibited again Obama’s core “progressive” conviction that the average American is hopelessly stupid.

Where were you from 1980 to 2007, Mr. Obama? Sleeping? In Indonesia? In an ideologically induced stupor?

Obama’s second biggest tall tale is that the financial crisis of 2008 was caused by the Reaganomics policies of deregulation and tax rate cuts begun 30 years ago.

But as readers of this column know, the real causes of the financial crisis were government policies of overregulation and cheap dollar monetary policy,

For years, the ultra-leftist Obama himself had been promoting precisely these very policies at the root of the crisis. The opposite policies of Reaganomics, opposed in detail by Obama, were the causes of the Reagan boom discussed above.

FULL ARTICLE

By Charles Goyette at Whiskey & Gunpowder

It looks just like a reality show that’s not going to be renewed for another season. President Obama’s State of the Union ratings are headed in the same direction as American Idol’s so far this season – down.

Let me make a secret confession right here. For years, the producer of my radio talk show and I would draw straws each January to see who would “have the high privilege and distinct honor” of watching the president’s State of the Union address.

Do I have to clarify that the loser had to watch?

In case the president said something important – which almost never happened – I felt an obligation to play some audio clips and talk about it on the show the next morning. But, personally, watching Republican and Democrat presidents recite their laundry list of promised giveaways for the year ahead was more than I could bear.

I learned early on that I could avoid all of the ovations and applause, save time, and still capture what substance there might have been in a written paragraph or two. Soon, I’ll give you such a written account, a perennial synopsis that will allow you to watch something else – like American Idol – and still have a handle on what the president says.

And you might even have time left over to keep an eye on the real news.

While We Were Watching…

The State of the Union is treated with utmost seriousness by the dominant news media. All four major TV networks and the cable news channels carry the event. My local newspaper devoted most of the front page and big chunks of the inside pages to its coverage: photos, accounts, sidebars, response, and analysis.

But it’s actually a spectacle that crowds out the real news. News about the impact American diplomacy is having on our future standard of living. News about the U.S. dollar’s reserve status winding down.

On the day of the State of the Union address, news flashed around the world – but not on your favorite network or in your morning paper – that India and Iran have agreed to end-run the U.S.-imposed sanctions on Iran.

They will use gold to do so.

Those [U.S.] sanctions, which have now been agreed to by the European Union as well, will ratchet up in July. Their enforcement means that banks and financial institutions involved in oil transactions with Iran will be barred from doing any business with financial institutions in the United States and Europe.

According DEBKAfile, a news source based in Israel, Iran has taken steps to bypass American and European banks and their currency desks altogether, agreeing instead to sell its oil to India for gold. China is expected to soon agree to use gold in buying oil from Iran as well. It’s a move that would leave the long-standing global dollar pricing of petroleum in tatters.

The gold-for-oil agreement means a three things:

1. It hastens the unwinding of the U.S. dollar’s global reserve currency status.

The rest of the world is actively developing alternatives to the U.S. dollar. Although it will mean a falling standard of living for the American people, U.S. policies and secretaries of state, like Condoleezza Rice and Hillary Clinton, have spurred what will become a stampede away from the dollar. DEBKAfile also reports that both China and Russia have secret mechanisms already in place to pay Iran in non-dollar currencies for its oil. And only a month ago, China and Japan, the world’s second- and third-largest economies, agreed to develop direct yen/yuan trading, forgoing the dollar as the reserve currency intermediary.

2. It accelerates the global monetization of gold.

Both China and India have been aggressively adding to their gold reserves. Other countries are following suit. The Keynesians, who have been in charge of American monetary policy, having destroyed the value of the dollar and enabled our ruinous debt, may actually believe that gold is a “barbarous relic.” But it is clear that their opinions have little functional value in the real world. The world is turning to gold more and more as U.S. debt continues to mount. Indeed, is there a better alternative monetary unit to be found? Certainly, it’s not the euro. Jim Grant of Grant’s Interest Rate Observer says gold is the only answer to the question, “if not the dollar, then what?”

3. It reveals the growing global impotence of the U.S.

Long able to enforce reluctant countries to adhere in its missions and embargoes around the world, the U.S. is finding its will frustrated. Nations that once had to weigh the favor of the U.S. against their own commercial and domestic political interests are increasingly ignoring the global dictates of the U.S. State Department. In 2003, Turkey, where the prospect of a U.S. invasion of Iraq was wildly unpopular, refused even bribes to allow the U.S. to stage the invasion from its soil. Today, the threat of a U.S. or Israeli strike on Iran is meeting with growing disapproval, especially from countries like China and India which rely heavily on Iranian oil.

Routine. Tired. Repetitive.

It may be that the State of the Union’s falling ratings – Obama’s speech the other night was down 12 percent from the year before, and was down 21 percent from 2010 – are a sign that people in large numbers have discovered there are better sources of important news than network television and Washington’s lapdog press.

Or, even better, maybe they’ve had about enough of the Washington party.

Or, maybe it’s simply because it’s all so routine, so tired, so repetitive. Even American Idol, entering its 11th season, has more surprises than the State of the Union. Consider:

Obama, who clearly doesn’t understand anything about markets, offered to have the government interfere with the real estate market in brand new ways in 2012. What could be more predictable than some president announcing a scheme to screw up the real estate market again in the new year?

It’s so routine. So tired. So repetitive.

And while the contestants on American Idol are fresh every year, the promises that make up the State of the Union are just reruns, season after season.

Now, if you’d like to be free to pay attention to the real news that actually affects your freedom and prosperity, let me provide you the following short, beginning-to-end account of this year’s State of the Union. You’ll be able to refer to it year after year, so that while you’ll still be informed about the president’s address, you can skip the show and save yourself time.

Time to follow the real news. Or to watch American Idol.

“Thank you so much. Thank you very much. Thank you. Thank you.”

The president agreed to do something for (to?) homeowners. He also has decided to help teachers. And students. And women. Workers, too. The president wants to help workers, for sure. And jobs galore. The president is all about creating jobs in 2012. And more jobs in energy. Oh, they’ll be clean ones for sure!

Plus, he’s going to reform regulations so that regulators will be able to regulate better. And he wants to get a handle on the bureaucracy. And he wants to reform education. And both make government more effective and still grow the economy. Did he forget men and women in uniform? The president most certainly did not!

“Thank you, God bless you, and may God bless the United States of America.”

Regards,

Charles Goyette

Charles Goyette is a talk radio personality and the author of the New York Times bestseller The Dollar Meltdown: Surviving the Impending Currency Crisis with Gold, Oil, and Other Unconventional Investments.

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