Guns, Guns, Guns . . . And Distraction

Your daily newspaper and your favorite news websites have been dominated recently by news about guns and gun control.  Since the awful shootings at the Sandy Hook elementary school, where a heavily armed lunatic murdered more than two dozen children and adults, our political leaders have been talking a lot about firearms and what we can do to prevent another horrible massacre.

In an odd way, the opportunity to talk about guns must be a kind of welcome relief for our politicians, because the gun control debate lets each party retreat to safe, time-honored positions that appeal to their bases.  Democrats understand that most of their voters will support attempts to license gun owners, register all weapons, and restrict or even ban ownership of “assault weapons” or other firearms.  Republicans, on the other hand, know that their supporters will cheer vigorous defenses of the Second Amendment right to keep and bear arms and stalwart opposition to overly zealous attempts to regulate gun ownership.

I suspect that all of the talk, talk, talk about guns is, in part, a means of distracting voters from other pressing issues.  Members of Congress and the Obama Administration would rather stay snugly in their gun debate comfort zones than deal with the spending, tax, and budget deficit issues that have far more long-term significance for our country.  With all the talk about guns, how much discussion of those core economic issues have you heard recently?  When those issues are in the forefront, and feet are being held to the fire, there are no easy, pat answers and no rote appeals to political bases.

As terrible as the Sandy Hook shootings were, we shouldn’t let our political leaders divert our attention from the federal debt time bomb and other issues that are restraining our economy.  Yesterday we received an unpleasant reminder of these problems when it was announced that gross domestic product dropped in the fourth quarter of last year.  Imagine:  our economy actually shrank during the hottest shopping season of the year.  It’s time we remind Congress and the President of the paramount need to focus on the hard budget and economic issues, before our economy plunges into another recession.

Declining To Make Do With Low Expectations

The consensus seems to be that Bill Clinton’s speech to the Democratic National Convention was hugely effective for President Obama’s reelection campaign.  Many people have pointed to Clinton’s statement that no one — not even Clinton himself! — could have done a better with the economic challenges President Obama inherited as a key point in the speech.

Whether you agree with that sentiment or not — and I don’t agree with it — I think that viewpoint, by itself, represents a kind of sea change for Americans.  We always want things to be bigger, faster, cheaper, better.  We don’t settle.  We expect our sports teams to win and call for the coach’s head if they don’t.  We celebrate victors and shun losers.  If Americans are buying Bill Clinton’s argument, that says something about our country, and I think it says something sad.

We’ve never been cold realists.  This is a place of dreams, of surprising success stories, of Horatio Alger and “constant improvement.”  If we now just shrug and overlook or excuse crappy economic performance without holding people accountable, where are we heading as a country?

Oh, by the way, today the Commerce Department announced that durable goods orders fell by 13.2 percent, the worst drop since the depths of the recession.  That suggests that factory activity is down, and the economy is nowhere close to rebounding.  Bill Clinton might think that’s as good as anyone could do.  Sorry, Bill, I think you’re full of it.  I refuse to lower my expectations, and I think the performance of our economy right now is just unacceptable.  I suspect that many other Americans share that sentiment.

Are You Better Off Now Than You Were Four Years Ago?

Anyone who lived through the 1980 presidential election remembers the very basic question:  “Are you better off now than you were four years ago?”  Ronald Reagan used that question — and the anticipated answer of most Americans — to devastating effect against incumbent President Jimmy Carter.

President Obama had better hope voters don’t ask themselves that question this year, because new economic data analyzed by former Census Department statisticians at the Sentier Research firm reveals that the answers of most Americans are not going to be favorable.  The data shows that, amazingly, median household income fell more during the “recovery” from June 2009 to June 2012 than it did during the preceding recession.  What’s more, the drop in median household income happened across the board, in virtually every demographic group.

For example, family households lost 4.7 percent; people who live alone lost 7.5 percent. Households headed by African-Americans lost 11.1 percent. The income in married-couple households dropped 3.6 percent. Households headed by full-time workers lost 5.1 percent. People with “some college, no degree” lost 9.3 percent, people with associate’s degrees lost 8.6 percent, high school grads lost 6.9 percent, and people with bachelor’s degrees or more lost 5.9 percent.

The only group that came our ahead during the period from June 2009 to June 2012 was senior citizens.   The incomes of those between the ages of 65 to 74 grew by 6.5 percent, and the incomes of those over 75 increased by 2.8 percent.

The Sentier Research findings help to illustrate just how bad the performance of our economy has been during recent years.  There have been lots of losers and few winners — not exactly the record that an incumbent President would want to run on.  When almost everyone has taken a big hit to the pocketbook, it’s not easy to convince them that, bad as things are, they would be even worse if you hadn’t been in charge.

Learning From Those First Jobs

Most of us remember our first jobs. Whether it was working at a pizza joint or a grocery store, a lifeguard station or a clothing outlet, flipping burgers or mopping floors or stocking shelves, there were many common experiences.

We remember our parents encouraging us to find work for the summer.  We remember applying for positions and getting hired.  We remember our bosses and co-workers, and getting our first paychecks, and how good it felt to have some extra money in our pockets.

Along the way, we learned some valuable lessons.  We learned that being on time was important, unless you wanted the manager to chew you out.  We learned that, whatever our parents said, the world didn’t revolve around us, and our bosses and co-workers didn’t think we were anything special.  We learned to listen, take instruction, bite our tongues now and then, and do the work as we were told.  We learned what makes a good boss and what makes a bad boss, and that lazy co-workers who always wanted you to cover for them were a pain in the posterior, that our co-workers who didn’t live in our neighborhood or go to our schools were nice people, and that a kind word from an appreciative customer could be a beautiful thing.

All of these are reasons why I fear that our never-ending recession will have lasting consequences — for there are many teenagers and young adults who have been unable to land that first job and learn those valuable life lessons that have served the rest of us so well.  Instead of working at those first jobs, they’ve been sitting at home, listening to their parents tell them how great they are and that it isn’t their fault that no jobs are available.  When they finally do get that first job — whenever that might be — how well equipped will they be to succeed, without those memorable first job experiences to fall back on?

Our Historically Puny Recovery

On Wednesday an AP story about the current economy confirmed what anyone who has been paying attention already knows:  the recession that, statistically at least, ended in the summer of 2009 “has been followed by the feeblest economic recovery since the Great Depression.”

The standard economic measurements of recovery from a recession tell a uniformly ugly story.  Economic growth after a recession has never been weaker.  Unemployment, which currently stands at 8.3 percent, has never before been so high three years after a recession’s end.  Consumer spending has never been so paltry.  And only once has job growth been slower than it is now.

Ever worse, the current “recovery” isn’t just barely falling short of past recoveries.  For example, in the eight other examples AP analyzed, the growth in gross domestic product during the first three years of the recovery averaged 15.5 percent.  The growth in GDP during the first three years of this recovery is 6.8 percent — or less than half the historical average.  The growth in consumer spending is similarly less than half the historical average.  Worst of all, in the eight prior recoveries, the economy regained, on average, 350 percent of the jobs lost during the recession.  In the current recovery, we’ve replaced only 46 percent of the lost jobs.  In short, whereas other recoveries racked up huge net gains in jobs, we haven’t even made up the jobs lost during the recession.

Economists and politicians can argue about why this “recovery” is so uninspired and, really, not much of a recovery at all.  You can point to the various causes of the recession — the banking and credit crisis, the bursting of the housing bubble, consumers and businesses laden with absurd amounts of debt and taking foolhardy gambles in their affairs — and argue about whether the responses to the recession by Democrat and Republican, Congress and President, business, labor, and banks, consumers and investors alike, have been ill-considered.

One thing, however, is inarguable:  This recovery is the worst we’ve had in the modern American era.  Let’s not kid ourselves about that, or try to overlook what we know in our guts to be true.

The Economy Slows, And The Anxiety Grows

We got more bad economic news today.  The Commerce Department reported that the economy grew by 1.5 percent in the second quarter of 2012.

These figures are often revised, and perhaps this announcement will be modified in the future.  And 1.5 percent growth is better than flat-lining, or actual economic contraction, but that’s about the extent of the positive things you can say about this news.  Such economic growth is measly by any measure.  It’s not enough expansion to create real employment opportunities for the new people entering the job market — good luck finding work if you are someone who graduated from college this year — and it basically means that the economy is in a stall.  We’ll just have to hope that the stall ends with upward movement, and not a nose dive into new, double-dip recessionary territory.

I know some people think that Republicans are rooting for economic failure.  I’d like to think that isn’t the case — people are really suffering, and are growing increasingly worried — but I also think it is irrelevant.  Whether Republicans are hoping for economic failure or not, economic failure is what we currently have.  If there are rays of hope on the national horizon, outside of pockets of growth like the natural gas-fueled boom occurring in eastern Ohio, I haven’t seen them.

No Cause For Optimism In The Real World

The latest Conference Board measurement of consumer confidence is out.  It recorded another decline, marking the fourth straight month the index fell, and surprised experts who’d predicted a smaller drop in consumer confidence.

I’m skeptical about efforts to measure consumer confidence in a country as large and diverse as America.  I wasn’t consulted.  Were any of our readers?  (How about a show of hands?)  And the only surprising thing, really, is that economic experts would be surprised about their inability to  forecast something as unpredictable as consumer sentiment.  Economists are almost always wrong in their predictions.  Why do you think Thomas Carlyle called economics “the dismal science”?  The weather forecast on my iPhone AccuWeather forecast is far more reliable than the musings of out-of-touch economists.

No one in the real world is surprised that consumer confidence is slipping.  Economists do things like measure whether rates of decline in one month are smaller than the rates of decline in the prior month, and conclude that things are getting better.  People in the real world don’t think that way — we just see that decline is continuing.  Where’s the cause for optimism that significant job creation will finally start in this recession that has lingered for almost four years now?

The Dreaded Double Dip

Today Great Britain published statistics indicating that its economy has slid back into recession, making England the victim of a dreaded “double dip” recession.  Economic officials in the United States are holding their breath and hoping that the American economy doesn’t suffer a similar fate.

“Double dip” recessions are no laughing matter — but we can all use a laugh now and then.  And who can hear the phrase “double dip” without thinking of this classic scene from Seinfeld:

Mill, Baby, Mill!

In Ohio we are getting a first-hand look at the ripple effect in the economy when America’s energy resources are tapped — and it has been a real economic boon.

As I’ve mentioned before, eastern Ohio is home to the Utica shale formation, an incredibly deep layer of rock that apparently is a rich repository of natural gas, oil, and other highly valued “wet gases.”  Drilling wells requires steel pipe, and because the Utica shale formation is so deep underground it requires lots and lots of pipe.  As this New York Times article reports, the need for pipe caused by the resurgence in natural gas drilling in the continental United States has helped to fuel a resurgence in the Ohio steel industry, which has seen expanding steel mills and the hiring of new workers to handle the skyrocketing demand.

The effects don’t stop there.  The owners of the property on which the wells are being drilled have been paid for the privilege and therefore have more money to put into their local economies.  The fracking method used to extract the gas and oil requires lots of water, so trucking companies have expanded their tanker fleets to meet the demand.  And all of the truck drivers, oil drillers, geologists, and drilling engineers who work in Ohio’s oil patch have to eat and sleep and work, which means that hotels, motels, and restaurants in the area are busier than they’ve been in years and the demand for office space has increased, too.

In short, Ohio’s economy demonstrates the good things that can happen when energy resources are located and tapped.  As the Ohio story shows, developing our oil and gas resources — a proven commodity with a proven market that doesn’t require government subsidies or wasteful stimulus spending — is a sure means for an economy to grow its way out of this unending recession.

Thanks to Richard for sending me the linked article.

Tuning Out

I didn’t watch the President’s State of the Union speech earlier this week.  It turns out I’m not alone.

According to the New York Times, 37.8 million viewers watched the President’s speech.  That’s down from 42.8 million in 2011, 48 million in 2010, and 52.3 million for the President’s 2009 speech to Congress.  In short, 15 million people who watched the President’s initial speech to Congress have just stopped watching.  And it’s not as if they lacked the opportunity to do so — the speech was carried on 14 different networks.

I’m sure those 15 million people have stopped watching for lots of different reasons.  I stopped because I think the State of the Union speech is stunningly boring and I hate the stylized standing ovations given with robotic predictability by the Members of Congress of the President’s party.  I’m sure others have stopped watching because they thought this year’s speech would be repetitive of last year’s speech, and some probably didn’t watch because they have just tuned President Obama out.  For those formerly hopeful people, perhaps, the bloom is off the presidential rose after three years of a bad economy and widespread joblessness, despite massive federal spending and huge budget deficits.

The falling viewership for the State of the Union speeches must be of concern to the President and his reelection staff.  In America, we vote as much with our channel changers as we do with the lever in our voting booths.  And, if I were the President, it’s the last group of non-viewers that would concern me most.  If Americans have given up and tuned out on President Obama, how can he turn around their negative perception of him?

 

The Power Of Zero

The August jobs report was released today, and it showed that the American economy created no net jobs in August.

That’s right:  a big, fat zero.  Nada.  Zilch.  A goose egg.  Naught.  Zippo.  What could be a more apt and powerful description for the moribund state of our economy?  Neither up nor down.  Dead in the water and becalmed.  Not really doing anything.  It’s the first time since 1945, 66 years ago, that the government reported a net job change of zero.

This result comes as no surprise to those outside the Washington Beltway who are looking desperately for jobs that don’t exist or are trying to find their way during this time of economic standstill. We’ve seen the listlessness, the lack of growth, and the lack of confidence firsthand and all around us.

Next week, President Obama will give a speech to a joint session of Congress to spell out his latest plan to jump start the economy.  If another speech could help, shouldn’t it have been given long ago?  If the Administration had new ideas on what to do, shouldn’t they have been proposed already?  The zero reported today seems to reflect a lack of ideas and a lack of urgency as much as a lack of economic growth.

Looking On The Bright Side

Today’s announcement of the latest unemployment figures was bad news all around — only 18,000 jobs created, the unemployment rate up to 9.2%, more than 270,000 out-of-work Americans who have just stopped looking for a job, and growing fears that our lingering recission is going to get worse before it gets better.  One economist quoted in the linked article said it was “an employment report with no redeeming features whatsoever.”

My grandmother told me, however, that I should always look on the bright side.  I’ve tried to do that about the current sad state of the American economy, and have come up with the following possible silver linings:

*  We’re kicking Greece’s ass!

*  “Quantative easing” would be a good phrase to use in a laxative commercial.

*  When you think about it, owning your own home really is kind of a hassle, anyway.

*  Look, a squirrel!

If those don’t do the trick, how about the classic song of unbridled optimism from Monty Python’s Life of Brian:

 

The Buttoneer Challenge

A few days ago the button on my shorts — after gamely attempting to deal with the enormous tensile strain caused by my middle-aged spread — abruptly fell off.  I immediately thought of the crucial line of a ’70s commercial for a product called The Buttoneer that claimed to securely fasten buttons.  As the ad showed footage of buttons dangerously exploding away from pants, shirts, and other articles of clothing, an announcer grimly, and repeatedly, intoned:  “The problem with buttons is they always fall off!”

With times being tough, it would be dumb to pay a professional to do something I should be able to do.  So, I decided to re-anchor the button myself, using one of those tiny sewing kits you get at some hotels.  Although I had never used a needle and thread before, I was acquainted with the basics.  You thread the needle, tie a knot in one end of the thread, and then insert the needle in and through the fabric, pulling the thread through and working through each of the the four holes in the button until it is snug against the garment.  Fortunately, the needle was already threaded, and I didn’t stab myself in the thumb more than once or twice.  Admittedly, it’s not  a professional looking job, but the button is back on and functional.  And when my sewing exercise was done, I felt a pleasant sense of accomplishment.

As I was moving the needle back and forth, I idly wondered what I had missed by not taking home economics during high school.  In my school, that really wasn’t an option.  Boys took shop, girls took home ec.  These days, though, being able to cook and create and repair clothing seems a heck of a lot more useful that being able to create a candlestick on any lathe that might be nearby.

Bleak, Bleak, Bleak

I haven’t written about the economy for a while, and there is a reason for that:  I am trying to maintain a positive attitude this summer, and the economic news has been unrelentingly bad.  Avoidance therefore is the only path to optimism.

Of course, it is impossible to fully ignore the news, which is discouraging.  The latest report on unemployment, which came out yesterday, is a good example.  Every month, millions of Americans remain out of work, as the economy continues to be mired in a recession.  And when the bad economic news is combined with the reports on the lack of progress toward a political agreement that would meaningfully address our national budget and deficit issues, it becomes hard to put on a happy face.

As a lifelong Cleveland sports fan, I am used to pessimism and disappointment.  As a country, however, we sure could use some good economic news for a change.

Our Gilded Congress

Congressional disclosure forms were released yesterday and they show that our elected public servants are doing very well, indeed.

The wealth in Congress knows no party-line boundaries; Republicans and Democrats alike are doing well.  According to the reports, the Minority Leader and Majority Leader in the Senate are both multimillionaires who saw their wealth rise in 2010.  So did the the Speaker of the House and the House Minority Leader.  Other Members of Congress reported on gifts they received and, in one case, a member of Congress paid herself some hefty interest on a loan she made to her own campaign committee.

There are exceptions, of course, and I am not suggesting that only paupers should be elected to the Senate and the House of Representatives.  But when Americans wonder why Members of Congress, at times, seem out of touch with bread-and-butter issues like jobs and housing prices, they might do well to reflect on the vast personal wealth in Congress and the deferential and preferential treatment our elected representatives receive as a matter of course.  It’s easy to downplay the effect of high gasoline prices or unsold homes in middle-class neighborhoods if you have millions of dollars in personal investments to reflect upon as a fellow Senator gives you a ride on her private jet.