Two dissatisfied customers comment about a restaurant. One says, “The food here is terrible.” The other replies, “I know, and such small portions!” In many ways, they could be describing our current employment picture. Not only are the portions shrinking, but the jobs themselves are steadily losing quality.
Today’s release of the October jobs report showed the loss of another 190,000 jobs had pushed the official unemployment rate to 10.2%, only the second time since the Great Depression that unemployment was quoted in double digits (factoring in workers who had given up job hunting altogether or have settled for part-time work would push that rate to 17.5%). That didn’t stop Wall Street pundits from trying to fashion a silk purse of this sow’s ear. The ‘green shoots’ crowd focused on the slowing pace of job losses, the nascent economic ‘recovery’ (even if it is jobless), and the projected improvement in 2010. No mention was even made of the quality of what few jobs were being created.
The analysts completely ignored the continued trend of replacing goods-producing jobs with those jobs that require production from other sources. For example, we lost 61,000 manufacturing jobs last month, but added 45,000 jobs in education and health services. In particular, the addition of health workers is nothing to celebrate. Just as a family’s economic position is not improved by higher medical bills, the country as a whole does not benefit from increased health-care spending. Until this trend reverses, our unbalanced economy will not regain its stability, a real recovery will never take hold, and the overall job outlook will get much bleaker.
by John Browne – Senior Market Strategist, Euro Pacific Capital
Last week, to the delight of its media cheerleaders, the government announced that economic growth had returned and the recession had ended. But before we start celebrating one quarter of modest growth, we should realize the only force driving this apparent recovery is an enormous increase in government spending. To finance its largesse, the government is now borrowing at a rate that has ordinary citizens and the international community extremely concerned.
Leading into the first election season under Obama’s reign, this unprecedented government borrowing and spending is creating a false sense of security. The activity has allowed GDP to increase despite stagnation in corporate and consumer spending.
Small businesses – the most important creators of new jobs – are nervous. Due to uncertain economic conditions and a high degree of regulatory uncertainty, they are hoarding cash rather than investing. Indeed, their largest expenditures are often solely to replenish inventories.
Likewise, consumers are rationally hording their resources. Year over year, consumer spending – which constitutes 70 percent of GDP – is essentially flat. With such a large segment of the economy quiescent, the percentage increase in public sector spending has to be very large in order to push the GDP upward.
The new government spending spree has focused on major stimulus initiatives, including the new homebuyer tax credit and ‘cash for clunkers’.
“All that is necessary for evil to succeed is for good men to stand by and do nothing.”- Edmund Burke
My rebuke to House Speaker Nancy Pelosi and my comments on the Constitution and federal powers of Congress in regards to health care and the “Commerce Clause.”
Last week, the U.S. Speaker of the House, Nancy Pelosi,responding to a reporter’s questionof whether the Constitution gave Congress the authority to enact individual health insurance mandate, kept repeating, “Are you serious?”
Now, let’s give Speaker Pelosi the benefit of the doubt and attribute her impolite reply to simple disbelief. In fact, from her point of view her authority is unchallenged per a September press release, and many others such asPolitico’s Erwin Chemerinskyand even the contemporary Supreme Court agree.From her press release, Pelosi states:
“The Constitution gives Congress broad power to regulate activities that have an effect on interstate commerce. Congress has used this authority to regulate many aspects of American life, from labor relations to education to health care to agricultural production.Since virtually every aspect of the heath care system has an effect on interstate commerce, the power of Congress to regulate health care isessentially unlimited.“
The Speaker is certainly correct that federal Congress has certainly legislated on “many aspects of American life.” In fact, there is a lot more at stake with the Commerce Clause than “just” our health care – the entire authority for economic central planning rests on this single clause. I strongly disagree with Pelosi that the Constitution allows Congress broad power in this respect. First, the exact language frommy job description in Powers of Congress,Article I, Section 8, Clause 3:
“The Congress shall have Power… to regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes.”
Pelosi believes that she has the power to “regulate Commerce… among the several States” and I suggest that in blunt language she instead literally means to “control the economy… of the States.” Pelosi and her ilk accomplish this by confusing the modern meanings with the legal meaning and contemporary context of the founders.
Michael Moore utilizes a word in the title of his new movie to elicit praise and respect from his Left-leaning fans and derision from his Right-leaning critics. Unfortunately for all of us, he uses the wrong word to describe his movie’s subject matter. It’s not capitalism, silly man; it’s corporatism. Therefore, I refuse to call his movie anything but what its true title should be: “Corporatism, A Love Story“.
Let’s head to Merriam-Webster to clear this up. Which one of the following best describes America today?
capitalism: an economic system characterized by private or corporate ownership of capital goods, by investments that are determined by private decision, and by prices, production, and the distribution of goods that are determined mainly by competition in a free market.
corporatism: the organization of a society into industrial and professional corporations serving as organs of political representation and exercising control over persons and activities within their jurisdiction.
The correct answer is, of course, corporatism. A key phrase in the definition of capitalism is “by investments that are determined by private decision“. How do government bailouts of private industry reconcile with this definition? They don’t. And if you think this is a recent phenomenon then I urge you to consider the Savings and Loan bailouts back in the 80’s and 90’s.
Another assertion in the definition of capitalism that does not compute in America today is that the prices, production, and distribution of goods are supposed to be determined by a free market.
By John Browne – Senior Market Strategist, Euro Pacific Capital
As 2009 moves past its midpoint, many market participants are briskly trying to forget the carnage of 2008 and the first quarter of 2009. But, before we get lost in the euphoria of the 36% Dow rally in the Spring/Summer of this year, a little hindsight is in order. In March, the Dow had plunged to 6,547, or some 53 percent down from its nominal 14,164 high in 2007. Despite the recent gains, we are still nearly 40% below the 2007 peak. This is a brutal truth that everyone seems to be ignoring.
Last week, Merrill Lynch, that storehouse of economic sagacity, announced that the recession was over. Even the bearish NYU economist Nouriel Roubini was reported as saying “the worst is behind us.” However, wishing earnestly for something does not make it so.
Admittedly, the financial meltdown that threatened in late 2008 appears to have been contained. In addition, the Fed’s actions in the credit markets have held interest rates down and turned the yield curve positive. The credit markets also have started to ease. In addition, the federal government’s injection of trillions of dollars into the economy has “boosted confidence” for those too short-sighted to know the consequences. This welcome news has provided impetus to equities.
In combination with reassuring remarks by senior administration officials and retail investors’ wish not to be left behind, money has started to move back into American equities. The resultant rally in stocks seems to have validated the preceding optimism.
It’s Friday and that means it’s time for another installment of “Quick Hits”.
Helen Thomas and Chip Reid berated White House Press Secretary Robert Gibbs the other day for pre-selecting questions for Obama’s “town hall” and “controlling” the press. It appears that the honeymoon (I call it the “Obamagasm”) is coming to an end. Gibbs seems to be out of his league as Obama’s Press Secretary. I’ll be surprised if he makes it through Obama’s first and hopefully only term.
There is one particular forbidden health care question for Obama. I would love to hear his answer to the following question:
“Mr. President, you are considered a Constitutional scholar. Could you educate the American people a bit and tell them what section, article, or amendment permits the federal government to provide health care?”
Sure, he would dodge the question, but it is one dodge that I long to hear.
On Monday, Ron Paul’s son Rand Paul held another money bomb campaign fund raiser. The goal was to break $100k. The goal was met. This is huge news and a great sign that the Ron Paul wing of the Republican Party is not going anywhere. Rand Paul raised over $100,000 in about a month without an official fund raiser. Senator Rand Paul has a nice ring to it.
There was high drama last Friday afternoon on the House floor during the debate on the narrowly passed Cap and Trade bill. The Republicans kept pointing out that the legislation will lose more jobs and put a higher tax burden on the American people.
As Cap and Trade races through Congress, here is a question – Who will benefit? The environment and us or Government Sachs?
by Jake Towne, the Champion of the Constitution
Originally published Sunday, June 28, 2009 at http://www.nolanchart.com/article6573.html
Last week the House voted 219-212 to pass HR 2454, the American Clean Energy and Security Act of 2009, whose intent is to “create clean energy jobs, achieve energy independence, reduce global warming pollution and transition to a clean energy economy.” I’ve only had time to browse the 1,092 page bill and sincerely believe it will not achieve a single one of its purposes.
The creation of clean energy jobs is very vague and the parts that are clear center not on industry but on educating people about global warming – this appears to signal the creation of a new class of bureaucrat-teachers, not industrial jobs.
Energy independence? Transition to a clean energy economy? Get real, there is nothing of substance in the document that details such a plan, and this is a pipe dream for government to create this. What will you ask? Only a free market, driven by the consumer and free from government interventions can do so, in my opinion.
“Reduce global warming pollution?” Somehow I missed the scientific debate where the global warmers square off against the global coolers and those who believe that ‘the weather just changes, weather you want it to or not’ as I suggested here “Anthropogenic Global Warming or an Ice Age, Which Is It? (PART 2/2)“. Is carbon dioxide really a pollutant? Don’t plants need it to live and don’t we all respire it? It would be a lot cheaper and a lot more useful than HR 2454!
Wow, this one is a doozy! A ton of new bills were introduced in Congress on Friday: 188 in total. For those who haven’t read this series of articles from the beginning, there are a few things to keep in mind…
When taking a look at the list below, keep in mind that the U.S. Constitution, which created our Federal Government, clearly enumerated 18 specific functions that it is given. For all other things, the 9th and 10th amendment make it clear that the individual states have the power. Note that it states in the Constitution that it is the Supreme Law of the Land, which can be usurped by no other. This means that all opinions to the contrary made by the Supreme Court are technically invalid. Throughout the past couple of hundred hears the Supreme Court has rule one way or another on some “interpretation” of the Constitution, but in fact no interpretation is necessary, as the intention of the founding fathers are quite clear. For example, if the “general welfare” clause or the “interstate commerce” clause was intended to be used as a catch-all for any arbitrary piece of legislation, then the 10th amendments which reads:
The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.
would be completely meaningless. So simple logic, in addition to the writings of Madison and other founding fathers, dictates the notion that the Federal Government was set up to have very little power, and that these United States are intended to be a loose federation of sovereign states.
Only due to politician’s greed and overwhelming desire for power does the Constitution get relegated to the trash heap.
So, despite the noble intentions of many of these bills, it doesn’t mean they are legal.
No one is bound to obey an unconstitutional law and no courts are bound to enforce it.
– 16 Am. Jur. Sec. 177 late 2d, Sec 256
Of the bills introduced yesterday, these are ones that are clearly not legitimate functions of the Federal Government [as always, my commentary will appear in red]:
HR1892 – To designate the facility of the United States Postal Service located at 102 North Main Street in Cedarville, Ohio, as the “William ‘Brent” Turner Post Office’.
HR1929 – To establish the Fannie Mae and Freddie Mac Investigative Commission to investigate the policies and practices engaged in by officers and directors at Fannie Mae and Freddie Mac responsible for making the decisions that led to the enterprises’ financial instability and the subsequent Federal conservatorship of such enterprises. [Keep in mind that Fannie Mae and Freddie Mac have been basically nationalized, which is, of course, unconstitutional.]
HR1925 – To designate as wilderness certain Federal portions of the red rock canyons of the Colorado Plateau and the Great Basin Deserts in Utah for the benefit of present and future generations of Americans.
HR1924 – To amend the Indian Law Enforcement Reform Act, the Indian Tribal Justice Act, the Indian Tribal Justice Technical and Legal Assistance Act of 2000, and the Omnibus Crime Control and Safe Streets Act of 1968 to improve the prosecution of, and response to, crimes in Indian country, and for other purposes.
HR1922 – To require the Federal Energy Regulatory Commission to hold at least 1 public hearing before issuance of a permit affecting public or private land use in a locality.
HR1921 – To establish an Office of Public Advocate within the Department of Justice to provide services and guidance to citizens in dealing with concerns involving the Federal Energy Regulatory Commission, and for other purposes. [Fantastic! Create another layer of bureaucracy to help people deal with bureaucracy...]
HR1978 – To authorize the Attorney General to make grants to improve the ability of State and local governments to prevent the abduction of children by family members, and for other purposes.
HR1977 – To require the Consumer Product Safety Commission to study drywall imported from China in 2004 through 2007, and for other purposes.
HR332 – Providing that the House of Representatives will focus on removing barriers to a prosperous economy and therefore renew the dream. [Reading the full text of the bill it all sounds nice, but it's really nothing more than platitudes. Nothing will come of this. It's not recommending anything concrete.]
HR1971 – To provide for the elimination of duties on certain comforter shells
HR1970 – To amend title XVIII of the Social Security Act to exempt unsanctioned State-licensed retail pharmacies from the surety bond requirement under the Medicare Program for suppliers of durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS).
HR1969 – To promote freedom and democracy in Vietnam. [Oh god. Oh god, no! Haven't we gotten ourselves into enough jams with this interventionist crap?]
This week’s episode of Freedom Watch with Judge Andrew Napolitano is in the bag. This week Ron Paul, Lew Rockwell, Peter Schiff, Campaign For Liberty President John Tate, Tracy Byrnes (from FBN), and John Stossel joined the Judge for more discussion on liberty.
They discussed Obama’s plan for education, the endless bailouts, and more. John Stossel joined the show during the final minutes via telephone and discussed his upcoming special on 20/20 Friday night at 10pm EST called “Bailouts, Big Spending, and Bull.”
Ron Paul was on for the first 15 minutes or so. John Tate joined during the last half hour. Please spread the playlist below around the net. And be sure to join the Facebook “Fans of Freedom Watch” group if you haven’t already.
Watch what many are calling the liberty power hour below. All 6 parts should play in succession via the playlist here.
The third installment of Judge Napolitano’s “Freedom Watch” went out over the Internet today. The Judge had his usual guests, Ron Paul, Cody Willard, Peter Schiff, and Tracy Byrnes.
Also joining The Judge today was Glenn Beck and Walter Jones, both discussing Obama’s speech last night and the recent successful efforts of the administration to push through more and more spending legislation.
Ron Paul and Schiff join the second half of the 60 minute show and as usual both speak candidly about what we’re doing and where we may be going once our Keynesian ways play out.
Watch the entire 60 minutes below. The show ran a little long and I had to cut off both the beginning and end to fit within 6 YouTube videos. It starts abruptly and ends abruptly but you didn’t miss anything of note.
(Thanks again to George Szucs, the shows producer for allowing and encouraging us to make the show available online.)
Liberty Maven
by Peter Schiff, president of Euro Pacific Capital and author of Crash Proof 2.0: How to Profit from the Economic Collapse
by John Browne – Senior Market Strategist, Euro Pacific Capital
Now, let’s give Speaker Pelosi the benefit of the doubt and attribute her impolite reply to simple disbelief. In fact, from her point of view her authority is unchallenged per a September press release, and many others such as
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