Still The Economy, Stupid
By Larry Johnson on March 25, 2010 at 1:32 AM in Current Affairs
No matter how euphoric Democrats are in the White House and the Congress, their manic behavior does not alter reality. Pretending that they have done a great thing, that health care will now be affordable and that costs will be contained is completely delusional. Why?
Because the costs the bill impose are going to dampen economic activity and lead to more unemployment. Consider, for example, the tax on tanning salons. That means the price of getting bronzed skin is more expensive today than it was yesterday. If it costs more does that mean more people will want to get their melanin toasted? Hell no. This will reduce the demand for tans. Folks on tight budgets will go back to the old-fashioned way–i.e., laying out in the sun rather than laying out cash to recline in a tanning bed.
As that happens can we expect tanning salons to hire more workers? Nope. They’ll probably cut some workers.
But we’re only talking about one narrow, irrelevant sector of the economy. Right?
No!! Here are some facts that Democrats and many in the media are ignoring:
1. NEW HOME SALES FELL FOR THE FOURTH CONSECUTIVE MONTH.
Sales of new homes in the U.S. unexpectedly fell in February to a record low as blizzards, unemployment and foreclosures depressed the market.
Purchases decreased 2.2 percent to an annual pace of 308,000, figures from the Commerce Department showed today in Washington. The median sales price climbed by the most in more than two years.
The new-home market is vying with foreclosure-induced declines in prices for existing homes in an economy where unemployment is forecast to average 9.6 percent this year, close to a 26-year high. Treasury Secretary Timothy F. Geithner yesterday said it would take a “long time” to repair the housing market as the administration takes steps to overhaul real-estate financing and regulation.
“It’s going to be a long, slow slog and the lagging sector will be new home sales because they have to compete with existing sales and foreclosures,” Bill Hampel, chief economist at the Credit Union National Association in Washington, said before the report. “New home sales probably have until the fourth quarter until they start recovering.”
2. SALES OF EXISTING HOMES FELL FOR THE THIRD CONSECUTIVE MONTH.
Sales of existing homes fell for a third straight month in February, pushing sales down to the lowest level since last July. There is concern the fragile housing rebound is faltering, making it harder for the overall economy to recover.
The National Association of Realtors said Tuesday that sales of previously occupied homes dropped 0.6 percent in February to a seasonally adjusted annual rate of 5.02 million.The weakness in sales depressed prices with the median home price dropping almost 2 percent from a year ago to $165,100.
If people are not buying existing homes, if people are not buying new homes, then they are not buying new furniture, they are not buying new rugs or electronics, they are not hiring painters and plumbers and electricians. These are the kinds of activities that create new jobs.
If homes are not being built and/or re-sold than economic activity is going to limp along. Got it?
And what is Barack Obama doing? He and the Democrats have now imposed new costs on construction firms, you know, the guys who build houses and employ people. With their new costs they will be less likely, not more likely, to bring on new workers.
What about mo’ better health care coverage? Trouble on that front too.
Ed Morrissey lays out the perverse incentives put into the bill. Why perverse? A law designed to insure everyone gets healthcare is going to actually give people a poorer quality of health care and provides strong incentives for employers with more than 50 workers to downsize and to limit pay. How do you like them apples?
Will ObamaCare drive businesses out of providing health insurance?
In a word, yes, and that’s not just me talking. Last night, CBS did a perspective on how ObamaCare’s mandates and tax incentives will impact small businesses, which Democrats insist will see benefits from the ObamaCare largesse. The only problem is that the system actually incentivizes businesses to pay penalties and throw their employees into the government-run exchanges:
Let’s see how much hooting and hollering the Democrats are doing come November. I am betting they will be crying rather than cheering. It all hinges on housing and real estate and giving those folks who have the capital to put people to work and incentive to hire more workers. Simple economics, but Barack is a moron and does not understand simple things like this.


















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