Poverty at highest rate in 15 years, business and consumer confidence plunging
posted at 1:25 pm on September 13, 2011 by Ed Morrissey
In his Rose Garden speech yesterday, Barack Obama insisted that his economic policies don’t consist of class warfare — and then insisted that Republicans raise taxes on the wealthy to fund his Porkulus II: Economic Boogaloo plan that he sent to Capitol Hill last night. The tax hikes Obama proposed were so toxic that even a Democrat-controlled Congress refused to consider them in 2009/10 for their biggest agenda item:
“It would be fair to say this tax increase on job creators is the kind of proposal both parties have opposed in the past. We remain eager to work together on ways to support job growth, but this proposal doesn’t appear to have been offered in that bipartisan spirit,” Boehner spokesman Brendan Buck said.
The biggest piece of the payment plan would raise about $400 billion by eliminating certain deductions, including on charitable contributions, that can be claimed by wealthy taxpayers. Obama has proposed that in the past — to help pay for his health care overhaul, for example — and it’s been shot down by Republican lawmakers along with some Democrats.
In essence, it’s the same kind of short-term, gimmicky proposal as the first Porkulus bill in February 2009 that did nothing to right the American economy, offered with this White House’s usually trimmings of class warfare against oil companies (whose customers will pay the higher costs of the taxes) and “corporate jet owners,” ie, the rich. In other words, it’s classic Obamanomics — the Cash for Clunkers approach that attempts to preserve and expand central control of the economy, when it’s the central control that’s causing the problems we face now.
So how are Obama’s policies working out? According to the Census Bureau, poverty hit its highest rate in 15 years in 2010:
The national poverty rate in 2010 hit 15.1 percent — the highest level since 1993, according to a report Tuesday from the Census Bureau.
The report also indicated that median household income, adjusted for inflation, was lower last year than any year since 1997.
The first full year after Obama’s first Porkulus doesn’t look very good, does it? It seems that Obama loves the poor so much that he’s going out of his way to create more of them. Much of that comes from the lack of job creation in an expanding population, which has left the US economy millions of jobs in the hole since the technical end of the recession in June 2009. Small businesses are the engine of job creation, and according to Bloomberg, they’re not terribly keen on hitting the ignition switch these days:
Confidence among U.S. small businesses dropped to a 13-month low in August as fewer companies projected better economic conditions and improving sales, a private survey found.
The National Federation of Independent Business’s optimism index decreased to 88.1, the weakest reading since July 2010 and the sixth-consecutive decline, from 89.9 in July. The number of small-business owners saying they expected the economy will improve six months from now fell to the lowest level since 1980.
“Hope for improvement in the economy faded even further through the month,” William Dunkelberg, the group’s chief economist, said in a statement accompanying the index report. “With such a dim outlook, owners are not going to do a lot of hiring or expanding.”
Small-business owners have grown less confident that conditions will improve as stagnant job growth weighs on consumer sentiment. Households “uncertain about the future” won’t “engage in the spending that would help lead us out of the recession,” Dunkelberg said.
Funny he should mention that. Yesterday, Reuters released a survey that showed consumers plan to scale back spending during the upcoming Christmas season, which is bad news for retailers:
Most than a quarter of Americans expect to spend less during the holidays this year, a survey showed on Monday in an early sign that retailers will have to try harder to win shoppers in the biggest selling season of the year.
The findings underscore the fragility of the U.S. recovery, since consumer spending accounts for almost 70 percent of the nation’s economy.
About 27 percent of people surveyed by America’s Research Group said they planned to spend less this year, while about 55 percent expects to spend only as much as last year. …
“Retailers better be worried about Christmas,” America’s Research Group President Britt Beemer said in an interview. “If half of Americans believe it is going to be worse before it gets better, they may not be too excited about buying much this Christmas season.”
Today, the CBO released its economic projections for the next two years, and says to expect 9% unemployment through the end of next year:
Incoming data and other developments since early July, as well as the latest Blue Chip consensus forecast, suggest that economic growth for the remainder of this year and next is likely to be weaker than the agency anticipated—with growth in the vicinity of 1½ percent this year and around 2½ percent next year.
With output growing at that modest rate, CBO expects employment to expand very slowly during the rest of this year and next year, leaving the unemployment rate close to 9 percent through the end of 2012. Weakness in the demand for goods and services is the principal restraint on hiring, but structural impediments in the labor market—such as a mismatch between the requirements of existing job openings and the characteristics of job seekers—appear to be hindering hiring as well.
These are the wages of class warfare. Even more basically, these are the entirely predictable outcomes of central economic planning, selective regulation, regulatory ambiguity, and mixed messages on tax rates and fiscal burdens.