Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Politics : The Obama - Clinton Disaster -- Ignore unavailable to you. Want to Upgrade?

To: DuckTapeSunroof who wrote (73265)	6/1/2012 7:17:21 PM
From: Investor Clouseau	2 Recommendations Read Replies (1) \| Respond to of 103300

The other is the household survey. Government workers ask whether the adults in a household have a job. Those who don't are asked whether they're looking for one. If they are, they're considered unemployed. If they aren't, they're not considered part of the work force and aren't counted as unemployed. The household survey produces each month's unemployment rate. Fox news reported that the unemployed/underemployment rate is now 14.8% IC

To: DuckTapeSunroof who wrote (73265)	6/2/2012 10:05:59 AM
From: Hope Praytochange	1 Recommendation Read Replies (1) \| Respond to of 103300

Job Report Is Catastrophic For President Obama By LAWRENCE KUDLOW You would think $1 trillion in spending stimulus and $2.5 trillion of Fed pump-priming would produce an economy a whole lot stronger than 1.9% GDP growth, which was the revised first-quarter number. And you'd think all that government spending would deliver a whole lot more jobs than 69,000 in May. But it hasn't happened. The Keynesian government-spending model has proved to be a complete failure. It's the Obama model. And it has produced such an anemic recovery that frankly, at 2% growth, we're back on the front end of a potential recession. If anything goes wrong — like another blow-up in Europe — there's no safety margin to stop a new recession. And that brings us to the grim May employment report, which generated only 69,000 nonfarm payrolls. It's the third consecutive subpar tally, replete with downward revisions for the two prior months. It's a devastating number for the American economy, and a catastrophic number for Obama's reelection hopes. All momentum on jobs and the economy has evaporated. Inside the May report, the data are just as bad. The unemployment rate rose slightly from 8.1% to 8.2%. The so-called U6 unemployment rate, tracking the marginally employed or completely discouraged, increased to 14.8% from 14.5%. And labor earnings are barely rising at 1.7% over the past year, almost in line with the inflation rate. In fact, through April, after-tax, after-inflation income is scarcely rising at 0.6% for the past year. The private workweek also fell in May. So did the manufacturing workweek and aggregate hours worked for all employees. The small-business household survey did rise, but that follows declines in the prior two months. Barack Obama doesn't get this, but businesses create jobs. And firms have to be profitable in order to hire. Yet the president is on the campaign trail criticizing Mitt Romney by degrading the importance of profits. Huh? Without profits businesses can't expand. And if they don't expand, they can't hire. And if they don't have profitable rates of return, they won't attract new capital for investment. Which brings us to a couple of important reasons for the virtual freeze in hiring. First, there's the fiscal tax cliff. If all the Bush tax rates go up, incentives will go down and liquidity will leave the system. You can't pick up a newspaper these days and not find a story about how the fiscal cliff is elevating uncertainty and slowing U.S. growth. House Speaker John Boehner asked Obama for help in extending the Bush tax cuts this summer. But Obama said no. Instead, he wants to raise marginal tax rates on upper-income earners, capital gains, dividends, estates and many successful corporations. Where's the corporate tax reform that would lower rates and broaden the base and end the double-taxation of the overseas profits of American companies? A business tax cut would help enormously, but it's nowhere in sight. Obama is too busy trashing Bain Capital profits and Romney's business career, both of which, by the way, have recently been praised by former President Bill Clinton. (It was Clinton who lowered investment taxes and presided over an economic boom.) A second uncertainty facing businesses is the Supreme Court decision on ObamaCare due in a few weeks. If all those crazy tax-and-regulation mandates are deemed unconstitutional, it's Katy bar the door as businesses put profits to work and hire. But they move without a court decision. Then there's the European mess with the threat of banking contagion from Spain, Greece and Italy. That could blow up the whole world economy if it goes completely sour. The Europeans should guarantee all bank deposits, interbank loans and bank debt until this is straightened out. But they're not. So the problem festers. And now European companies are withdrawing money from local banks and investing in dollars (especially through Treasury bonds that are yielding an incredibly low 1.5%). But the rapid rise of King Dollar is generating commodity deflation, which is a deterrent to manufacturing production. According to the May ISM report, manufacturing is slowing. The Fed may yet launch a new quantitative easing to stop commodity deflation and accommodate the gigantic worldwide dollar demand. But the merits of this move are dubious. On the other hand, extending the Bush tax cuts would stop the economic and job slide and reestablish certainty. In fact, all countries should move to the supply side with lower tax rates to spur economic-growth incentives. Europe, China and Latin America ought to read Ronald Reagan's speeches and examine his actions when he faced a similar crisis 30 years ago. It would be an hour or two well spent.