Journalism????

I was doing some research today and came across a very peculiar report on the PBS website. It struck me as quite odd that this reporter, Ray Suarez, would somehow find a way to paint the situation of a town in North Dakota with an unemployment rate at 1% and a booming economy due to development of oil on private lands, in somewhat of a negative light. Pointing out that so many people are descending upon this small town there aren’t enough homes or lodging to satisfy the demand and traffic problems and the fact that there aren‘t enough people to fill all the job vacancies…

Excerpt from PBS Report: Tonight, we begin a series on the changing landscape of energy in the U.S. and the consequences of ever-increasing development. In western North Dakota, near the Montana border, there's so much oil around, it almost feels risky to say it: boom -- a 1 percent unemployment rate, heavy traffic in what was once a sleepy town of 12,000, nowhere to live, restaurants that close early because they can't find enough people to work at $15 an hour and others offering signing bonuses to dishwashers and fast food workers.

This boom has caused unforeseen growing pains and a gusher of cash surging through a town not totally ready for it. Williston's population doubled in size in two years. Suddenly, the parking lots are full with cars from all over and job-seekers coming from every direction. Joe Gunderson moved from Montana and says he is making the best money of his life.
JOE GUNDERSON: It's been good. It's really good, I mean, anything you want. Money is not really an issue. I mean, if you want it, you just buy it and make it work.

RAY SUAREZ: Another man, Tyler, is working as a cook until something opens up in the oil fields and living in his car.
Tyler: (pointing to different sections of his car) That is the food section down there. That is the kitchen. Out back, that is toiletries. Essentially, what I do is, I move everything from back to the front whenever I want to sleep and then the front to the back whenever I want to drive around or can fit a passenger in. I have my cooler. I have a lot of good camping gear, but there's nowhere to camp around here, unless I want to pay a ridiculous amount of money. Yes, welcome to my home.
RAY SUAREZ: So, for now, home is a parking place.
Why not point out the obvious fact that developing our country’s natural resources will have the same effect on our country as it did in this small town in North Dakota and create millions of jobs? Today, there is still over 80% of offshore acreage that is off limits for drilling…ANWR remains untapped… and the Keystone Pipeline’s approval still sits on the back burner. Maybe the reporter should put out there that, if our current leadership in this country would recognize the pile of new wealth and economic growth lying just below our feet, then small towns like Williston, ND wouldn’t be so overwhelmed with people desperate to find work. There would be plenty of work spread throughout the country. And… I also would like to point out that if restaurants are so busy and the job market is so competitive that they have to pay wages of $15 per hour and offer signing bonuses to dishwashers…THAT’S A GOOD THING!!! THAT’S THE FREE MARKET AT WORK!!!

Reagan VS Obama: Who inherited the worse economy?

I have been quite puzzled the last few days since hearing former President Bill Clinton proclaim that the recession that President Obama inherited could not have been corrected in four years by any President… not even him. I felt this statement needed to be looked at more closely in order to check the validity of his assertion. I was very young during the Reagan years having been born only two months before he was elected in 1980. However, I remember, as a child, hearing about how bad the economy had been…and words like “recession”, “inflation”, and “unemployment”. Now of course, at the time, these terms meant very little to me as my greatest concerns were whether or not my dad would let me watch cartoons instead of a boring rerun of Star Trek or if we were going to order pizza for dinner instead of having dad’s famous hamburger surprise.

Having closely researched the failing economy at the end of the Carter administration into the beginning of the Reagan administration, I am left to wonder if the recession of the early 80s at the beginning of Reagan’s presidency was not only comparable but, in many cases, much worse than the recession of 2008 into 2009 as Obama’s term as president began. First of all, Reagan didn’t inherit one recession…there had been three separate recessions that began in 1969 with each recession being worse than the one before. So you could say that Reagan inherited an economy that had been sputtering along for a decade and was in the midst of the worst recession yet… where as President Obama had inherited a recession which had been preceded by 54 months of job growth and economic growth of over 3% per year.

When President Reagan swore into office in January of 1981, the unemployment rate was 7.5% and the labor force as a percentage of population was 63.5% (which up until now, was the all time low in civil participation in the workforce). At the end of his first term, in January of 1985, the unemployment rate had gone down to 7.3% after having peaked at nearly 11% in 1982. You might be thinking that a .2 point drop overall from 7.5% to 7.3% isn’t really that impressive, but when you see that he lowered the unemployment rate and increased the labor force to 64.5% in the same time frame it becomes much more impressive…and by the end of his second term, in January of 1989, the unemployment rate was 5.4% with a workforce participation rate of 66.3% only about 1 point off from the all time high in workforce participation rate since the statistic began being calculated. Now, lets compare Obama’s record.

When President Obama swore into office in January of 2009, the unemployment rate was 7.8% (only slightly higher than the number Reagan inherited) and the workforce participation rate was 65.7%. In the closing month’s of President Obama’s first term, unemployment stands at 8.1% after having peaked at just over 10% (nearly a full point lower than the trajectory of the recession in the 80s which topped out at 11%) with a workforce participation rate of 63.5% (returning to the all time low at the beginning of the Reagan administration). It needs to be said that if the workforce were as large as it was when Obama took office, the unemployment rate would be a whopping 11% right now.

Furthermore, when Ronald Reagan took office America was suffering double-digit inflation, with the CPI (Consumer Price Index) registering at 11.3% in 1979 and 13.5% in 1980 (25% in two years). The Washington establishment at the time argued that this inflation was now endemic to the American economy, and could not be stopped by anyone (sounds a lot like what Mr. Clinton said), at least it couldn’t be fixed without a calamitous economic collapse (heard that one before too). However, by the end of 1983 (Reagan’s third full year as President) , inflation rates had fallen to 3.22% which is only slightly higher that the inflation rate at the end of 2011 (Obama’s third full year as President) which stood at 3.15%. However, Obama was not handed the same hand when it comes to inflation. In fact in the two years leading up to Obama’s first term, the inflation rates were 2.85% in 2007 and 3.85% in 2008. Again, Ronald Reagan was handed a much worse hand than was Barrack Obama.

Not to mention that all of the above was accompanied by double digit interest rates in the early 80s, with the rate peaking at 14.14% in 1981. The poverty rate started increasing in 1978, eventually climbing by an astounding 33%, from 11.4% to 15.2%, but by the end of his presidency Reagan had managed to stop the upward trend and lowered the poverty level back to 14%. A fall in real median family income, that began in 1978, snowballed to a decline of almost 10% by 1982, but by the end of the 1980s, median household incomes had increased by 15%. In addition, from 1968 to 1982, the Dow Jones industrial average lost 70% of its real value, reflecting an overall collapse of stocks. Now, before you go investigating my numbers, and respond by saying the actual decline of the stock market during this time period was closer to 23%…please realize that I have done my homework and factoring in the catastrophic inflation rate of the period the loss in value is equivalent to 70%. Folks back then would have been better off putting their money in mattresses than investing in the stock market.

To be fair, Obama inherited some similar numbers in some aspects. Interests rates, however, have not been above 5% since he took office. Therefore, once again, Reagan stepped into yet another worse situation than did Barrack Obama. President Obama did inherit a rising poverty level, however, at the end of his first term the level continues to rise to a rate of over 15% with a record number of Americans on food stamps. President Obama did inherit a crashing stock market which lost more than half its value between 2007 and 2009 and, to be fair, much of those losses have been recovered. However, the market has yet to return to the high it had reached in 2007. By this point in the Reagan presidency, the market had not only regained all of its losses, but had climbed by 20% over the previous high.

By all accounts, I would say that the recession of the early 80s was either as bad or worse than the recession of 2008. It feels silly comparing the two…kind of like the age old “my dad can beat up your dad” argument, but when someone argues that he inherited the worst economic crisis sense the Great Depression, and nobody could have fixed it…that argument needs to be challenged. Even if I stipulate (which I don’t), that they were equally bad on all counts or even the recession of 2008 was worse in some aspects… There is absolutely no argument that the Obama “recovery” is in any way comparable to the tremendous turnaround of the American economy during the Reagan administration.

I’ve already shown that economic indicators such as the unemployment rate, workforce participation, poverty rate, stock market, and median household income were all much better under President Reagan. However, the truest indicator of a strong American economy is the growth rate or GDP (gross domestic product) growth. In Reagan’s third year, 1983, the economy grew at a staggering rate of 7.25% and by the end of the Reagan recovery the growth rate had maintained an average of above 4% adding more than 20 million jobs. In Obama’s third year, 2011, the economy grew at a rate of 1.65% which was a slower growth than the previous year, 2010. That is a very troubling sign, since the recession officially ended in May of 2009. The Obama campaign team likes to boast about 4 million new jobs created and 30 months of straight private sector job growth. However, these numbers are misleading and underwhelming.

The 4 million jobs added don’t include the jobs that have been lost during his presidency…there has actually been a net loss of 300,000 jobs since he assumed the office in 2009. Also, the 30 months of straight job growth is not a feat never before accomplished by a president. Actually, the record for number of straight months with job growth is 92 months which began in 1982 under Ronald Reagan and continued until 1990. Hell, the 30 months that the Obama campaign is so boastful about doesn’t even come close to the 54 straight months of private sector job growth that occurred during George W. Bush’s presidency. In fact, the 30 months of straight job growth becomes even more lack luster when you realize that for the past six months our economy has added a mere 93,000 jobs per month on average. That’s about 50,000 jobs short of what we need to just break even with population growth, 100,000 jobs short of where we need to be in order to see any real progress in economic growth, and about 200,000 jobs short of the bar set by President Reagan.

So…Mr. Clinton, I feel that not only was it possible to have fixed the recession of 2008 in one term…I have conclusive proof that it HAS been done before. Hell… President Clinton, himself, inherited a pretty bad economy only a couple years removed from a recession and an unemployment rate over 7% and he turned things around as well. I’m so sick of liberals whining and crying about George Bush and the awful recession and poor pitiful President Obama who couldn’t have possibly risen to the bar that he had set for himself in 2008 with all his lofty campaign promises. Time to grow up, grow a pair and grow this economy…or get out of the way and let someone who knows what they’re doing take over.

Help Wanted? No... Help Needed!!!

I’ve spent the last day pouring over the new jobs report released by the Bureau of Labor Statistics yesterday morning. If you watch the mainstream media or read the New York Times, you probably heard or read this headline: “Unemployment rate DROPS to 8.1%”. However, this doesn’t even come close to telling the entire story. First of all, the number of new jobs added last month was an abysmal 96,000...and since the prior two months have both been revised to show that actually 20,000 fewer jobs were added in each of those two months than originally reported, the real number is probably somewhere around 75,000. This is about 75,000 jobs short of the 150,000 jobs we need each month just to break even with population growth. You may be asking “if so few jobs were added, then how did the unemployment number fall from 8.3% to 8.1%?” and the answer is simple but shocking. 368,000 people gave up looking for work and dropped out of the workforce…that means for every new job added, 4 people gave up hope in the job market.

You see, the unemployment rate is calculated based on the number of unemployed people including people who are without jobs, available to work and have actively sought work in the prior four weeks. The “actively looking for work” definition is fairly broad, including people who contacted an employer, employment agency, job center or friends; sent out resumes or filled out applications; or answered or placed ads, among other things. That number declined by 250,000 in August, but it was overwhelmed by the 368,000 drop in the size of the labor force. That suggests that many of those 250,000 stopped looking for work not because they found a job, but because they dropped out of the labor force. The unemployment rate is calculated by dividing the number of unemployed by the total number of people in the labor force.

When President Obama took office, in January 2009, the labor force participation rate was just under 66% and today it has fallen to 63.5% (the lowest levels since the labor force participation began being recorded). If the same number of people filing unemployment claims and “actively seeking work” were the same today as it was in January 2009, given the current job market, the unemployment rate would be around 11%… and if you include the 8 million Americans who are under employed (meaning working part time while actively seeking full time employment or whose jobs were cut back from full to part time) the rate would be around 14.5%. This includes 5 million long term unemployed (27 weeks or more) which makes up nearly 40% of the unemployed in America. Levels not seen since the Great Depression.

Wake up people, the economy is terrible!!! And the worst part is that there appears to be zero signs of things getting noticeably better anytime soon if we continue down the same path we are on now. Get informed…do your research…Read Read Read!!! Don’t just take some talking heads word for it…the information is out there. Go to more than one source…read both sides then dig deep into the numbers and irrefutable facts to come up with your own conclusion. Its time for Americans to quit being lead around by the nose… politicians have relied on our ignorance for far too long. Lets hold them accountable this November

Osama Dead!!! GM...alive?

I find it laughable that the Obama campaign continues to use the slogan “Osama is dead and GM is alive” as a reason to reelect President Obama. Granted, the President did order the operation (even though, its been revealed that the order gave the President plausible deniability if the operation had gone wrong), but he certainly did not accomplish this on his own. There were many patriotic Americans who contributed to the fatal capture of the world’s most wanted man. People like Donald Rumsfeld, George Tenet, Robert Gates, the brave soldiers in Seal Team Six, nameless CIA operatives, FBI agents, foreign intelligence, and of course George W. Bush who implemented many of the policies by which intelligence was gathered on Osama bin Laden (policies that then candidate Obama campaigned against in 2008).

Furthermore, while GM may in fact still be alive…many believe that another bankruptcy may be just around the corner for the auto company. Right now, the federal government owns 500,000,000 shares of GM, or about 26% of the company. It would need to get about $53.00/share for these to break even on the bailout, but the stock closed at only $22.39/share today and is listed as a bearish stock on the Wall Street Journal‘s Market Watch (not good). This has left the government holding $11 billion worth of stock, and sitting on an unrealized loss of around $15 billion. The government’s GM stock is worth about 33% less than it was on November 17, 2010, when the company went public at $33.00/share. However, during the intervening time, the Dow Jones Industrial Average has risen by almost 20%, so GM shares have lost around 45% of their value relative to the Dow. All this while analysts are saying that GM’s fall lineup falls well short of their competition as Nissan, Honda and VW continue to out innovate the one time auto giant. In the 1960s, GM averaged a 48.3% share of the U.S. car and truck market. For the first 7 months of 2012, their market share was 18.0%, down from 20.0% for the same period in 2011. With a loss of market share comes a loss of relative cost-competitiveness. There is only so much market share that GM can lose before it would no longer have the resources to attempt to recover. I’m not saying that GM is dead…and I’m certainly not hoping that GM is dead. I’m just saying that, at best, GM is on life support.

Don’t you find it odd that the slogan doesn’t say “…GM and CHRYSLER are alive” as they shamelessly pat themselves on the back? If memory serves me correctly, Chrysler was also included in the “miraculous auto bailout that save the American auto industry from complete disaster” (to quote the Obama team). They probably leave Chrysler out because Chrysler is now owned by the Italian car company, Fiat…and the once great American car company founded by Walt Chrysler, in 1925, exists in name only. I suppose they gloss over that fact seeing as how they continue to try and paint Mitt Romney as the one who sends jobs over seas. Even though, billions of dollars connected to Obama’s stimulus plan went to overseas companies.

Finally, I will close with this point… I am not a fan of the auto bailouts, let me make that crystal clear. I believe that the auto companies should have gone through structured bankruptcies just like every other business must go through when the market dictates. I do not believe in “too big to fail”. I believe in the free market and I believe in all companies suffering market discipline…otherwise, the market becomes corrupt. The funny thing is that GM and Chrysler both went through bankruptcy…the auto bailouts only succeeded in delaying the inevitable, wasting more than 20 billion dollars in the process, and giving government and unions way too much control over a private company. Another fun fact is that Barrack Obama is taking credit for something that he didn’t do. The auto bailouts stem from the TARP Act signed by George W. Bush in October of 2008...a full month before Obama was even elected president. I vehemently disagreed with President Bush’s decision to support the TARP Act. I felt it gave government way too much power and was far too broad in its language. That being said, the fact remains that TARP and by extension the auto bailouts should be credited (if one felt credit was due for such a terrible policy) to George Bush and not Barrack Obama. President Obama seems to love shifting blame and credit for just about everything to George Bush…however, somehow the blame for the auto bailouts is not one of them.