Barack Obama’s Mad Max Death Bus tour through the midwest is, as I noted in an earlier piece, a brain dead photo op that highlights his cluelessness about markets and economy. When you are tooling around in three massive fuel consuming buses and a legion of black SUVs you should not begin your stump speech by attacking folks who drive trucks and SUVs. But Barky did.
Instead of staying in Washington and trying to create the pretense that he understands there is a crisis and is trying to do something about it, he is dithering. Much like Nero fiddling while Rome burned, Barack is vacationing and politicking. The clueless Chicago Kid clearly does not understand how dire the situation is. Consider these recent developments:
A large percentage of US banks say that lending standards for commercial real estate loans are the tightest they have been since 2005, highlighting a continued lack of appetite for real estate investment.
They were never going to attract outpourings of sympathy from the general public. But the job cuts that have hit whole echelons of the world’s biggest banks in recent weeks have not only attracted little compassion, they have barely been noticed at all amid the seesawing global markets and predictions of economic gloom. Yet the 60,000 redundancies unveiled in a matter of weeks by eight big banks, six of them European – an average of about 5 per cent of the headcount of each institution – are likely to be just the start of a brutal reshaping of the industry that could result in the axing of hundreds of thousands of jobs worldwide.
Britain’s unemployment rate nudged upwards in the three months to June, while the number of people claiming jobless benefits rose at the fastest monthly rate since May 2009 when the nation was still mired in recession. According to the Office for National Statistics, the UK unemployment rate rose to 7.9 per cent in the three months to the end of June, from 7.8 per cent in the January to March period. A total of 2.49m people were out of work during the period, up from 2.45m in the three months to May.
And the global stock markets are falling again in the wake of Tuesday’s news that Germany’s second quarter GDP growth has stalled.
The worse-than-expected GDP data from Germany, which had been powering euro-area growth, add to signs Europe is flirting with a renewed economic slump as the debt crisis curbs spending across the region. France’s recovery unexpectedly ground to a halt in the second quarter, Italian and Spanish expansion remained sluggish and Greece’s economy contracted.
This is no longer just about the US economy. The global economy has slowed and we are in the midst of a new recession. We’ll just have to wait a few months before the statistics catch up and confirm what most folks already sense.
So, against this back drop, we also get to watch the Democrats panic at Rick Perry getting into the race. Perry is running in part on his record of creating jobs in Texas. Democrat water carriers–Paul Krugman and Harold Meyerson in particular–are out in force attacking Perry on this front. Meyerson claims:
Rick Perry’s Texas is Ross Perot’s Mexico come north. Through a range of enticements we more commonly associate with Third World nations — low wages, no benefits, high rates of poverty, scant taxes, few regulations and generous corporate subsidies — the state has produced its own “giant sucking sound,” attracting businesses from other states to a place where workers come cheap.
Perry’s calling card in the presidential race is his state’s record of job creation at a time when the national economy floundered. Yes, Texas has created lots of jobs, though that’s partly a reflection of the surge in oil prices, which in turn created tens of thousands of jobs in the oil and gas industries. What Perry touts in his stump speech, however, isn’t the oil boom but, rather, the low-tax, low-reg, handouts-to-business climate that prevails in Texas. It’s the kind of spiel that businesses hear every day from leaders of developing nations — Mexico and, even more, China.
Nice hatchet job, but Meyerson is wrong and dishonest. The Political Math Blog tears Meyerson and Krugman a new asshole.
Here are some of the highlights:
We can see that Texas has grown the fastest, having increased jobs by 2.2% since the recession started. I want to take a moment and point out that second place is held by North Dakota. I added North Dakota to my list of states to show something very important. North Dakota currently has the lowest unemployment rate of any state at 3.2%. And yet Texas is adding jobs at a faster rate than North Dakota. How can this be? The reason is that people are flocking to Texas in massive numbers.
Since the recession started hourly wages in Texas have increased at a 6th fastest pace in the nation. As a side note, the only blue state that has faster growing wages is Hawaii. Just thought I’d get that jab in since so many people have been making snarky “Yeah, I could get a job in Texas is I wanted to flip burgers!” comments at me on Twitter.
When we finally get the data, we discover that energy isn’t really the biggest part of the Texas economy. Increases in jobs in the energy sector (or closely related to it) account for about 25% of the job increases in the last year. Since the energy sector only makes up 3% of all employment, there is some truth to this claim. However, take the energy sector completely out of the equation and Texas is still growing faster than any other state. This indicates to us that the energy sector is not a single sector saving Texas from the same economic fate as the rest of the states. It’s not hurting, but Texas would still be growing like a weed without it.
Please take time to read the whole article at Political Math blog.
Here’s the bottomline–if Rick Perry makes his campaign for President exclusively about fixing the economy and creating jobs he will be the Republican nominee and he will kick Obama’s sorry yuppie ass. If Perry decides to get down in the weeds with conservative social issues he may give Obama an out. Regardless, the US and the world economy still face some tough times. Better to recognize we have a problem and try to do something about it rather than pretend that Obama’s stimulus program has worked. It hasn’t.