STEWARD of Prosperity

NH jobs lost: As Obama takeover continues

2010-08-02T10:21:00.001-04:00

Union Leader Editorial

Sunday, Aug. 1, 2010

Don't think the Obama administration and the Democratic Congress are trying to replace privately-run enterprises at every turn? Perhaps you missed last week's news of more layoffs by the New Hampshire nonprofit that arranges and administers college loans to families.

Under the laughable claim that a federal takeover of these loans will "reduce'' their costs and rescue people from greedy lenders, Obama and friends passed and signed a law last spring that ended private origination of Federal Family Education Loans.

These loans will now be overseen by federal workers in the behemoth known as the U.S. Department of Education.

Not only is this unlikely to reduce costs, it is clearly reducing jobs in the private sector. The New Hampshire Higher Education Assistance Foundation has laid off 35 positions lover the last two months. NHHEAF is hoping it will qualify for some federal work under the new government program, but the feds haven't said when the New Hampshire group might even be able to apply.

Even the non-profit NHHEAF may have become more of a bureaucracy than was necessary in a world of constantly increasing education costs. But it at least wasn't the government, "here to help you.''

America's capitalism is being slowly immersed into what is becoming an ever-thickening stew of government socialism.

When we are in up to our necks, it will be too late to get out.

http://www.unionleader.com/article.aspx?headline=NH+jobs+lost:+As+Obama+takeover+continues&articleId=4838d7fc-265f-4ef7-b569-ce58f028c057

Fed leaders: Economic recovery slower than expected

2010-07-14T16:32:00.000-04:00

By Neil Irwin

Federal Reserve leaders marked down their expectations for growth and inflation last month, concluding that the economic recovery is proceeding more slowly than they had thought in the spring but that the slowdown did not warrant new policy actions.

But Fed leaders did agree to explore options for supporting the economy further in case conditions worsen.

"The changes to the outlook were viewed as relatively modest and as not warranting policy accommodation beyond that already in place," said minutes of the Fed's June 22-23 policy meeting, released along with revised economic forecasts. "However, members noted that in addition to continuing to develop and test instruments to exit from the period of unusually accommodative monetary policy, the Committee would need to consider whether further policy might become appropriate if the outlook were to worsen appreciably."

In forecasts made in advance of the meeting and released Wednesday, the officials expected that gross domestic product will grow 3 to 3.5 percent this year, compared with a forecast of 3.2 to 3.7 percent at their April meeting. They modestly downgraded their projection for 2011 as well. That lower growth could translate into unemployment staying higher for longer -- Fed leaders expect the jobless rate to be 9.2 to 9.5 percent in the fourth quarter of 2010, and to be 8.3 to 8.7 percent at the end of 2011, both slightly higher than in April forecasts.

But they see little threat from inflation, projecting that prices will rise 1 to 1.1 percent this year, compared with the 1.2 to 1.5 percent rate they forecast in April. The new outlook is well below the 1.7 to 2 percent inflation rate that the Fed targets over the longer term.

The forecasts are the most explicit confirmation to date that Fed officials have lowered their expectations for growth -- and since their meeting three weeks ago, more weak economic data have been released suggesting a deceleration in the economy, including a reports on June employment conditions, international trade in May and retail sales in June.

Still, the minutes make clear that Fed leaders still anticipate a continued economic recovery, suggesting that most of the policymakers would still resist any push to take new steps to support growth. Members of the policymaking committee "generally saw the incoming data and information received from business contacts as consistent with a continued, moderate recovery in economic activity," the minutes said.

The minutes did note that "financial markets had become somewhat less supportive of economic growth," mainly due to troubles in Europe, and that this was "likely to weigh to some degree on household and business spending over coming quarters."

But the officials appear to place greater weight on data suggesting strength in the business sector. They noted that investment in equipment and software was rising rapidly, and that household spending "continued to advance," even as the weak job market could weigh on consumers.

As The Post reported last week, Fed leaders are starting to discuss policies that they might use to further support growth if the economy continues to weaken, including pledging to keep interest rates low for even longer than now expected, cutting the interest rate on banks' reserves and buying some additional mortgage securities.

Supreme Court extends gun owner rights nationwide

2010-06-28T15:18:00.001-04:00

By MARK SHERMAN
The Associated Press
1 hour, 4 minutes ago

WASHINGTON – The Supreme Court ruled Monday that the Constitution's "right to keep and bear arms" applies nationwide as a restraint on the ability of the federal, state and local governments to substantially limit its reach.

In doing so, the justices, by a narrow 5-4 margin, signaled that less severe restrictions could survive legal challenges.

Justice Samuel Alito, writing for the court, said the Second Amendment right "applies equally to the federal government and the states."

The court was split along familiar ideological lines, with five conservative-moderate justices in favor of gun rights and the four liberals, opposed.

Two years ago, the court declared that the Second Amendment protects an individual's right to possess guns, at least for purposes of self-defense in the home.

That ruling applied only to federal laws. It struck down a ban on handguns and a trigger lock requirement for other guns in the District of Columbia, a federal city with a unique legal standing. At the same time, the court was careful not to cast doubt on other regulations of firearms here.

Gun rights proponents almost immediately filed a federal lawsuit challenging gun control laws in Chicago and its suburb of Oak Park, Ill, where handguns have been banned for nearly 30 years. The Brady Center to Prevent Gun Violence says those laws appear to be the last two remaining outright bans.

Lower federal courts upheld the two laws, noting that judges on those benches were bound by Supreme Court precedent and that it would be up to the high court justices to ultimately rule on the true reach of the Second Amendment.

The Supreme Court already has said that most of the guarantees in the Bill of Rights serve as a check on state and local, as well as federal, laws.

Budget illusion: Mass. does better than us

2010-06-25T16:33:00.000-04:00

Union Leader Editorial:

Quick quiz: Which state's legislators budget more responsibly: New Hampshire's or Massachusetts'? No, it's not a trick question.

Wednesday night, legislators in Massachusetts approved a state budget that included reductions in lots of state programs and services. Many of those cuts were made necessary when legislators removed $687 million in federal stimulus money from the revenue side of the budget.

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That huge sum had been included in some budget plans all year. But lawmakers decided to take it out because they realized it might never show up. Congress has not appropriated the funds and might never do so.

The money is from something called the Federal Medical Assistance Percentages, which are matching federal funds distributed to states for social and medical service programs. Congress has not decided whether to approve proposed increases for this year. Wisely, Massachusetts Democrats removed the funding from the budget.

"We are, I would suggest, under no illusion that this . . . money is coming," Rep. Charles A. Murphy, D-Burlington, chairman of the House Ways and Means Committee, told The Boston Globe.

New Hampshire Democrats, by contrast, were only too happy to accept the illusion that the money is coming. When they passed state budget fixes a few weeks ago, they included $48 million in FMAP funding even though they knew Congress had not, and might never, approve it. It was irresponsible, but, they decided, easier than cutting $48 million in spending.

Did you ever think you'd see the day when Democratic legislators in Massachusetts could legitimately claim to have budgeted more responsibly than New Hampshire? What is becoming of our once frugal state?

At G-20, Obama to push for public stimulus spending in Europe

2010-06-25T16:30:00.001-04:00

By Scott Wilson

Washington Post Staff Writer
Friday, June 25, 2010; 1:11 PM

TORONTO -- President Obama arrived for a meeting of world economic powers Friday with a number of achievements already in hand. But he will have a far more difficult time persuading European leaders to follow his wish on an issue he believes is essential to the economic recovery: the need for public stimulus spending.

In the days leading up to the meeting, Obama secured a change in China's currency policy that could benefit U.S. exports, a European commitment to improve bank transparency rules and anagreement on financial regulatory reform legislation that gives him leverage in encouraging others here to take similar steps.

But as he meets with the Group of 8 in a rural resort town north of here, Obama is appealing to European leaders not to trim back public spending in the midst of a growing debt crisis on the continent. His message has been complicated by Congress, which is blocking his own requests for new deficit spending to stimulate the economy.

Obama holds a far less optimistic view than his European counterparts over the state of the global economy, less sure that it has improved sufficiently since the group's London meeting last year to justify a broad government pullback except from those countries suffering a crush of debt.

Whether he succeeds in persuading European leaders to continue drawing on their strained public treasuries at the G-8, which will be followed over the weekend by the broader Group of 20 summit here, could help determine if the staggering recovery gains momentum in the coming months or dips back into the doldrums.

"There is a fundamental issue going into the meeting over the size and shape of the global recovery," said Edwin M. Truman, a senior fellow at the Peter G. Peterson Institute for International Economics and a former assistant Treasury secretary for international affairs. "And it's fair to say that the administration's position is not the same as those of many other countries."

Obama's message places him at odds with such allies as French President Nicolas Sarkozy and German Chancellor Angela Merkel, both of whom have announced austerity measures in recent weeks.

At home, though, Obama is having a hard time putting his money where his message is.

Facing a difficult midterm election season, Congress has approved only about a quarter of the $266 billion in "temporary recovery measures" that the president asked for in his February budget request.

"We need to act in concert for a simple reason: This crisis proved, and events continue to affirm, that our national economies are inextricably linked," Obama said Friday before departing for Canada. "I'll work with other nations not only to coordinate our financial reform efforts, but to promote global economic growth while ensuring that each nation can pursue a path that is sustainable for its own public finances."On Thursday, the Senate blocked a jobs billthat would have extended unemployment benefits and provide aid to cash-starved states, with Republicans saying the $33 billion it would have added to the deficit was too much. The White House condemned "Republican obstruction at a time of great economic challenge for our nation's families."

In his letter last week to G-20 leaders, Obama outlined his more pessimistic view of the economic recovery. He wrote that "significant weaknesses exist across G-20 economies" and warned that after working "exceptionally hard to restore growth we cannot let it falter or lose strength now."

The International Monetary Fund predicts that the U.S. economy will grow more quickly than European economies over the next few years.

But the recent debt crisis in Greece and the vulnerability of other euro-zone countries has made even fiscally secure European countries reluctant to encourage growth with additional public funds or even maintain current spending levels.

"If we don't do something to confront debt, we will be facing increased pressure in the financial markets," said a senior European diplomat in Washington, who spoke on the condition of anonymity to discuss the issue candidly. "But we also understand what President Obama is saying -- that we can't kill the slow recovery underway."

Congress's reluctance to approve Obama's spending requests, the diplomat said, shows that the United States and Europe are "facing the same problems."

"We're in a somewhat contradictory situation that we have to find our way through," the diplomat said. "In the end, it will be very much a matter of taking this country by country."

In recent weeks, Greece has slashed spending and raised taxes to qualify for an international bailout. Merkel recently proposed cutting defense and public works spending and implementing new taxes, even though Germany's deficit is a relatively safe 5 percent of its gross domestic product.

Sarkozy recently announced tens of billions of dollars in budget cuts and plans to raise the French retirement age to save money on public pensions. British Prime Minister David Cameron also moved to raise the pension age in a budget proposal this week that would also increase taxes and sharply cut government spending.

In his letter, Obama acknowledged Europe's dilemma, saying there is a "need to commit to fiscal adjustments that stabilize debt-to-GDP ratios at appropriate levels." He also warned that such "consolidation" should be done over "the medium term," citing the "consequential mistakes of the past when stimulus was too quickly withdrawn."

But senior administration officials say the United States is doing just that: stepping down quickly from its public spending over the next year. That is happening largely because the $862 billion stimulus measure passed in February 2009 is due to expire next year.

Administration officials say their efforts to encourage private-sector growth, through small-business tax breaks and other legislation, are designed to make up for the decline in stimulus spending.

The somewhat mixed U.S. message to Europeans leaders means the stimulus debate in Toronto will probably revolve around the pace of the spending retreat, European diplomats and administration officials say.

Heather Conley, director of the Europe program at the Center for Strategic and International Studies, said Obama and European leaders will seek to "differentiate those exit strategies" in the G-20's concluding statement.

"They'll come up with artful terms to suggest we're continuing to work on these issues," she said. "We haven't reached agreement."

In that way, she said, the meeting here is a prelude to the next gathering scheduled for later this year.

"This is not the summit to say, okay, we've weathered the storm," Conley said. "It's to say we're coming out of this in different places, we need to keep up the progress. And I think you're going to see the agenda developing really for the summit in South Korea in November to see if we really have weathered this European debt crisis."

Guest Post by U.S. Senate Candidate Bill Binnie

2010-03-02T11:47:00.006-05:00

As a successful businessman, I watched as the "old-guard" Washington politicians tried to fix our economy with a spending binge. I knew it wouldn’t work. And it hasn’t. The big spending “stimulus” package didn’t turn our economy around; it didn’t spur growth, it didn’t give hope to the jobless. Americans deserve policies that do work.

As someone with plenty of experience in the real-world economy, I know what does work. Our prosperity flows from certain key economic principles: fiscal responsibility, free markets and limited government. We need policies that will lower taxes, make government more efficient and eliminate wasteful spending. In short, we need common sense business policies. More importantly, we need to create jobs – good jobs, at good wages.

Fixing our economy won’t be easy. It will require a lot of hard work and a lot of tough decisions. It will also require having leaders in Washington who understand the real-world economy. And that’s why I am running for the US Senate.

As a businessman, I know how to make tough decisions; I know how to balance a budget; I know how to create jobs. And I will use my skills in the US Senate to make a difference. If you support my vision for America, please join my campaign. For more information, please visit: www.binnie2010.com.

Portsmouth, NH Refuses Stimulus Dollars

2010-02-09T23:32:00.000-05:00

Here in New Hampshire, we have a new example of a city turning down stimulus money because of the unreasonable and expensive hurdles included in the legislation as a result of special interest giveaways:

As stimulating as it might have sounded at the time, the city recently declined $2.5 million from the American Recovery and Reinvestment Act for its new water treatment plant because federal wage regulations would have forced the city to pay more for the project.
Ranked as the fifth most pressing drinking water project in the state, the state Department of Environmental Services awarded the city $5 million in March 2009 for the project — half of which would be a grant, and the other half borrowed from the state's low-interest revolving loan fund. The award required the city issue an addendum to the request for bids, which was issued a month earlier, asking bidders to include the stimulus money in their proposed budgets.
When the bids came in, the low bidder — Penta Corporation — presented final cost of $21 million with the stimulus funds and $17.3 million without.
So the city said thanks, but no thanks, to the stimulus funds.
"It just didn't make sense," said Deputy Public Works Director David Allen. "It was going to cost us more money to take the money."

Stimulus' Education Parachutes About to Fail

2010-02-08T12:28:00.000-05:00

As expected, with stimulus funds starting to peak and decline, local school systems are beginning to see trouble on the horizon:

Congress included about $100 billion for education in the stimulus law last year to cushion the recession’s impact on schools and to help fuel an economic recovery. New studies show that many states will spend all or nearly all that is left between now and the end of this school term.

With state and local tax revenues still in decline, the end of the federal money will leave big holes in education budgets from Massachusetts and Florida to California and Washington, experts said.

“States are going to face a huge problem because they’ll have to find some way to replace these billions, either with cuts to their K-12 systems or by finding alternative revenues,” said Bruce Baker, an education professor at Rutgers University.

The stimulus program was the largest one-time infusion of federal education dollars to states and districts in the nation’s history. As the program took shape last year, Education Secretary Arne Duncan and other officials repeatedly warned states and districts to avoid spending the money in ways that could lead to dislocations when the gush of federal money came to an end.

But from the start, those warnings seemed at odds with the stimulus law’s goal of jump-starting the economy, and the administration trumpeted last fall that school districts had used stimulus money to save, or create, some 250,000 education jobs.

Now the new studies point to the problems likely to beset thousands of school districts when the federal money runs out.

As localities though the nation, and here in New Hampshire, grapple with difficult budgeting choices, it will be interesting to see how this fight plays out when the federal government isn't there to cover over the underlying problem.

Spending Freeze...Literally

2010-02-02T17:17:00.002-05:00

The folks at Political Math have a new video explaining that minuscule impact Obama's proposed spending freeze will have on the federal debt.

Just as interesting, look how much money we would save by canceling the remainder of the stimulus:

Stimulus Bill Getting More Expensive

2010-01-26T20:24:00.002-05:00

Fox News is reporting that $787 billion has somehow turned out to be an underestimate of the costs associated with President Obama's stimulus bill:

The $787 billion federal stimulus package that Congress passed last year has gotten even bigger -- now expected to cost $862 billion, over the next 10 years, according to the Congressional Budget Office. ...

About $21 billion of the added costs stem from higher unemployment compensation payments, while the remainder of the increase comes from food assistance payments and interest payments from states on taxable government bonds, the Washington Times reported.

In its report on the country's dire financial straights, the CBO also cites huge budget deficits, noting that the 2010 fiscal year budget is likely to reach $1.3 trillion.

This report also serves as a continued reminder of the legislation's failure to "save or create" three million new jobs:

The nonpartisan CBO report, published Tuesday, attributes the $75 billion increase to added unemployment-related costs. More Americans are receiving unemployment benefits for lost jobs that the stimulus bill was meant to save, the report says.

Seeing the Light: 56% Now Oppose the Stimulus

2010-01-24T15:49:00.001-05:00

A new poll out today shows continued erosion of public support for President Obama's signature economic policy:

A majority of Americans oppose the economic stimulus program, according to a new national poll.

Fifty-six percent of people questioned in a CNN/Opinion Research Corporation survey released Sunday say they oppose the stimulus package, with 42 percent supporting it.

Last March, just weeks after the stimulus bill was signed into law by President Barack Obama, a CNN poll indicated that 54 percent of the public supported the program, with 44 percent opposed.

While this isn't the first poll showing more than 50% opposed to the measure, it does represents the largest favorability gap to date: -14%.

Fiscal Discipline in the State of the Union?

2010-01-23T15:04:00.001-05:00

In "we'll believe it when we hear it" news, Bloomberg is reporting that there is a "fighting chance" President Obama will propose a freeze on discretionary spending in next week's State of the Union Address:

There is a “fighting chance” President Barack Obama will propose a freeze in most discretionary spending by the federal government in his State of the Union speech next week, Senator Evan Bayh, an Indiana Democrat, said

“The president can say in this State of the Union address, ‘I’m going to include in my budget a freeze on discretionary spending, I’m drawing a line in the sand, and I’m going to use my veto pen to enforce that,’” Bayh said in an interview on Bloomberg Television’s “Political Capital with Al Hunt,” airing this weekend.

Bayh, 54, said that while he wasn’t certain the president would make such a call, “I think that there’s a fighting chance that he will.”

The senator also said he expects Obama to use the Jan. 27 nationally televised address before Congress to embrace creation of a commission that would suggest spending cuts and tax increases that Congress would be forced to vote on. Bayh met this week with Treasury Secretary Timothy F. Geithner, Vice President Joe Biden and U.S. Office of Management and Budget Director Peter Orszag to discuss such a commission.

Bayh said he doubts Congress would approve establishment of such an independent panel, and that Obama would have to set it up by executive fiat.

Getting the 60 votes likely needed for Senate passage of a bill to create the commission “will be very hard,” said Bayh, a second-term Democrat who will face voters in this fall’s midterm elections. He said that as a result, he expects Obama to “then come forward with an executive commission which is not as good, but is at least there’s a step in the right direction.”

What do you want to know?

2010-01-21T11:14:00.002-05:00

Following Scott Brown’s amazing victory in Massachusetts on Tuesday, pundits have broadened their focus to the few dozen other Senate races taking place across the country in 2010, including here in New Hampshire.

As GOP Chairman Former Governor John Sununu said yesterday, our primary process is going to be key in selecting the best candidates to represent the party in November’s contests as we work to continue spreading the fiscal conservative message that was so effective in the Bay State.

STEWARD knows that Granite State voters are experts at asking tough questions of the men and women who seek their votes and this is why we have organized the first question and answer forum with each of the declared Republican Senate Candidates. The forum will be take place at our Grassroots Communications Conference on January 30 and will be moderated by Governor Sununu himself.

We understand that not everyone will be able to attend the conference but wanted to give all STEWARD members an opportunity to ask questions of the candidates.

Please visit STEWARDofProsperity.com/forum to submit your question. We look forward to hearing from you!

Get Out the VOTE!

2010-01-19T12:11:00.002-05:00

As you know, today is Election Day in Massachusetts. While Granite Staters don't have a vote in this race, we certainly do have a stake.

As such, STEWARD encourages you to contact any and all family, friends, and colleagues you may have south of the border and urge them to get to the polls in support of Scott Brown.

In State, the NH GOP and others have come together to assist those who want to aid in the effort. Anyone with some free time today should contact BJ Perry for details (bj@nhgop.org) Also, the State Party is encouraging anyone interested to join them at a Victory Party tonight at The Draft in Concord starting at 7pm.

Scott has run a great race and could use your help to put him over the top!

Last Day to Register!

2010-01-15T10:30:00.003-05:00

Registration for STEWARD's free "Grassroots Communication in the 21st Century" conference is set to close today - Friday, January 15. If you haven't already let us know you'll attend, please click here to register now.

As you may have heard, we've arranged for a series of high-profile presenters - including former House Speaker Newt Gingrich - to share new media expertise at our day-long January 30 conference in Manchester. We promise: "Grassroots Communication in the 21st Century" will be the pre-eminent New Hampshire organizing event of 2010.

Speaker Gingrich, a conservative who needs no introduction, will be joined by presenters Andrew Breitbart (publisher of the news portals Breitbart.com and Breitbart.tv) and Stephen Gillett (a Senior Vice President, Chief Information Officer and General Manager of Digital Ventures at Starbucks).

STEWARD has also arranged to host the very first GOP Senate candidates' forum of the 2010 election cycle. Governor John H. Sununu, the Republican Party Chairman, will facilitate questions for a panel featuring Kelly Ayotte, Bill Binnie, Jim Bender and Ovide Lamontagne.

Space for this free conference is limited. Because we're now in the process of making final arrangements, we're closing registration tonight, Friday, January 15.

We look forward to seeing you in Manchester on January 30!

EVENT INFORMATION

WHAT: NH Steward's "Grassroots Communication in the 21st Century" conference

WHEN: Saturday, January 30, 2010 - daylong event kicks-off at 8:30 a.m.

WHERE: Southern New Hampshire University

2500 North River Road

Manchester, NH 03106

REGSITER: www.stewardofprosperity.org/conference

LLC Tax Update

2010-01-13T16:29:00.000-05:00

David Health, of the Nashua Chamber of Commerce which has been pushing back hard against the new LLC tax, has an informative write up detailing the tax's impact on small business in today's Union Leader:

Until recently, I have been confident in recommending New Hampshire as the lowest-tax state for small businesses because these businesses pay only the business enterprise tax (BET) at 0.75 percent on compensation paid to owners and employees, and the owners pay no personal income tax. Compare this result to Massachusetts, where the unincorporated business pays no business tax, but the owner pays 5.3 percent personal income tax on his compensation income. New Hampshire wins!

In recent years, however, this winning status has been eroded by increasingly frequent DRA audits challenging deductions of "reasonable compensation." In these audits, DRA asserts that small business owner compensation is actually "profit" subject to the 8.5 percent business profits tax (BPT). When DRA audits convert "compensation" into "profit," the small business owner's aggregate tax burden dramatically increases from the .75 percent BET rate to the 8.5 percent BPT rate.

Add the 2009 tax law and small businesses face a "tax double whammy" that will kill small business growth. Prior to the 2009 tax law, when DRA audits of partnerships and LLCs converted deductible "compensation" into taxable "profit," the tax rate increased from .75 percent to 8.5 percent. But now, the amount recharacterized as "profit" will also be treated as a "dividend" subject to the 5 percent income and dividends tax. Taxing the audited "profit" at the 8.5 percent BPT rate and again as a "dividend" at the 5 percent income and dividends tax rate means a combined tax rate of 13.5 percent.

So, after the 2009 tax law, tax advisers can no longer recommend New Hampshire as a good tax home for small business because the new law imposes burdensome record-keeping and an unprecedented "debt tax." Moreover, due to vague standards and increasingly frequent DRA audits of "reasonable compensation," no one can provide precise guidance on the "combined" New Hampshire tax rate on small business income. One can only say that the combined rate would be somewhere between .75 percent (the BET rate) and 13.5 percent (the combined tax on compensation converted to "profit"). Rightfully, entrepreneurs must reject such uncertainty.

Thankfully, it is starting to appear as though elected officials in Concord are picking up on the outrage:

In passing a law expanding the state's interest and dividends tax to all partnerships and limited liability companies, mistakes were made, Senate Majority Leader Maggie Hassan, D-Exeter, told the Exeter Rotary Club on Monday. Because mistakes were made, changes might be necessary, she hinted.

"Our biggest mistake is not communicating what we did. We had a July 1 deadline, we had $11 million bearing down on us," Seacoastonline.com reported her saying. "If we need to change it, we can."

That is the first hint we have seen from Democratic leadership in Concord that this burdensome tax could be revisited. That's a good sign.

Stimulus Supporters Seeking Cover Under Fuzzy Math and Word Play

2010-01-12T17:38:00.004-05:00

There appears to be some rearranging of the deck chairs on the USS Stimulus. First this, yesterday, from ABC News:

The Obama administration has taken some heat and mockery for using the nebulous and non-economic term of jobs being “saved or created” by the $787 billion stimulus program.

So it’s gotten rid of it.

In a little-noticed December 18, 2009 memo from Office of Management and Budget director Peter Orszag the Obama administration is changing the way stimulus jobs are counted.

The memo, first noted by ProPublica, says that those receiving stimulus funds no longer have to say whether a job has been saved or created.

“Instead, recipients will more easily and objectively report on jobs funded with Recovery Act dollars,” Orszag wrote.

In other words, if the project is being funded with stimulus dollars – even if the person worked at that company or organization before and will work the same place afterwards – that’s a stimulus job.

And today this, as reported by the Wall Street Journal:

Assuming that Barack Obama holds another White House press conference—his last was back in July—here's a question worth asking: If the stimulus is truly the success you and your team claim, why are you so reluctant to use the word?

It's a timely question, with Congress returning to Washington this week after a year of record spending. Right now the spotlight is on the effort by the Democratic leadership to ram through a health-care bill—any health-care bill—in time for the president to declare victory in his State of the Union. But a second stimulus may not be far behind, with the House having already passed a version before members left for Christmas.

The House approved its $154 billion second stimulus package in its last vote of 2009, little more than a week after a policy address Mr. Obama delivered at the Brookings Institution. In that Dec. 8 speech, he reviewed the progress of the earlier stimulus—the $787 billion American Recovery and Reinvestment Act of 2009—and used the occasion to call for additional congressional spending. The headlines rightly described what he was proposing as a "second stimulus."

Yet perhaps the most intriguing part of that speech is what the president did not say.

Not once did he use the word "stimulus." If you search under "speeches and remarks" on the White House Web site, it will tell you that the last time the president used the word "stimulus" in public remarks was in an offhand reference in a speech about clean energy in October. A month before that he used the term once in a speech that was about the stimulus. ...

Why the reticence? In itself, "stimulus" ought to be a political positive. After all, describing a bill as a stimulus assumes it will stimulate. Certainly that's the sense that Paul Krugman—a Nobel-winning economist and New York Times columnist—uses it when he complains that the first stimulus was too small.

Perhaps the reluctance to call the new package a second stimulus has something to do with the extravagant promises Mr. Obama made to sell the first. Less than a month into Mr. Obama's presidency, the first stimulus was pushed through partly on the promise that doing so would keep unemployment south of 8%. With Friday's jobs numbers, the same people who sold us that one now have to explain why keeping unemployment at 10% is progress.

The Journal article goes on, "It's classic Beltway. In Washington when your policies don't work, you don't change them. You change the name and hope nobody notices."

Thankfully, taxpayers can see through the smokescreens.

"Spend a lot or spend nothing at all, it didn't matter..."

2010-01-11T16:39:00.003-05:00

An AP story today dispels the myths behind the most visible part of the Democrat's stimulus bill/jobless recovery:

Ten months into President Barack Obama's first economic stimulus plan, a surge in spending on roads and bridges has had no effect on local unemployment and only barely helped the beleaguered construction industry, an Associated Press analysis has found.

Spend a lot or spend nothing at all, it didn't matter, the AP analysis showed: Local unemployment rates rose and fell regardless of how much stimulus money Washington poured out for transportation, raising questions about Obama's argument that more road money would address an "urgent need to accelerate job growth."

Obama wants a second stimulus bill from Congress that relies in part on more road and bridge spending, projects the president said are "at the heart of our effort to accelerate job growth."

Construction spending would be a key part of the Jobs for Main Street Act, a $75 billion second stimulus to revive the nation's lethargic unemployment rate and improve the dismal job market for construction workers. The House approved the bill 217-212 last month after House Speaker Nancy Pelosi, D-Calif., worked the floor for an hour; the Senate is expected to consider it later in January.

AP's analysis, which was reviewed by independent economists at five universities, showed that strategy hasn't affected unemployment rates so far. And there's concern it won't work the second time. ...
There was no difference in unemployment trends between the group of counties that received the most stimulus money and the group that received none, the analysis found.

Despite the disconnect, Congress is moving quickly to give Obama the road money he requested. The Senate will soon consider a proposal that would direct nearly $28 billion more on roads and bridges, programs that are popular with politicians, lobbyists and voters. The overall price tag on the bill, which also would pay for water projects, school repairs and jobs for teachers, firefighters and police officers, would be $75 billion.

Job Losses Continue, Unemployment Holds Steady...Sort Of

2010-01-08T11:27:00.003-05:00

The New York Times reports:

The United States economy lost more jobs than expected in December, tempering hopes for a swift and sustained recovery from the Great Recession.

The Labor Department said Friday that the economy shed another 85,000 jobs last month, but that the unemployment rate held steady at 10 percent.

In a surprise that highlighted the erratic nature of economic renewal, the government reported that 4,000 jobs were actually created in November — rather than a loss of 11,000 the government had originally projected — the first gain in nearly two years.

Though jobs were lost in December, the unemployment rate did not rise, an indication that more jobless workers had given up their search for work.

For more on the real unemployment number, the percentage of Americans out of work who for one reason or another have given up on the job hunt, Yahoo News:

Beyond Friday's lackluster headline payroll figures, the "real" unemployment rate rose to 17.3% and the average hourly work week remained near record lows at 33.2. In addition, the average duration of unemployment rose to 29.1 weeks as the ranks of the long-term (or "permanently") unemployed continue to swell. Furthermore, the household survey showed a decline of 589,000 employed persons to the lowest level since 2003, according to Miller Tabak.

In sum, fewer people are working, more Americans are dropping out of the labor pool and those who are working are working fewer hours: Average hourly earnings up just 2.2% vs. a year ago in December, lowest rate since 2004 and vs. an average gain of 3.3% over the prior decade, according to Miller Tabak.

State Democrats Draining Rainy Day Fund

2010-01-07T15:16:00.004-05:00

Via Grant Bosse and NH Watchdog:

The Legislative Fiscal Committee will be asked tomorrow to drain nearly $80 million from the state’s Rainy Day Fund to cover the remaining deficit from Fiscal Year 2009.

State Comptroller Edgar Carter and Commissioner Linda Hodgden have submitted a late request to the Fiscal Committee to transfer $79,733,939 from the Revenue Stabilization Reserve Account, commonly known as the Rainy Day Fund, into the state’s General Fund. The Fiscal Committee will take up the request tomorrow morning.

The two-year budget approved in June planned to draw down $37.8 million from the Rainy Day Fund in order to pay for state spending. Comptroller Edgar Carter tells the Josiah Bartlett Center that the state’s loss in the JUA Lawsuit has forced him to transfer $40 million more than planned.

“This is a larger than expected draw down, principally related to the fact that the Superior Court ruled against our ability to use $65 million from the JUA,” Carter explained.

On October 1, 2009, the state issued its Surplus Statement for FY09, showing that the Rainy Day Fund would have $76.1 million remaining. Tomorrow’s transfer would leave the fund with less than $40 million.

The $80 million deficit for FY09 does not include an additional $45 million in JUA funds budgeted for FY10, nor the fact that current year revenues are already more than $30 million below projections. Josiah Bartlett Center President Charlie Arlinghaus projects that the total budget hole, including the $110 million JUA Lawsuit, could reach $300 million by the end of June 2011.

Health Care Overhaul Becomes More Secretive

2010-01-06T16:26:00.005-05:00

Throughout the 2008 campaign, President Obama promised the American people that the negotiations over his signature health care reform would be widely broadcast. Today, Democrats in Congress, with the blessing of the President, made it clear they have no intention of going that route:

President Barack Obama and congressional Democratic leaders agreed Tuesday to forgo a formal conference committee for reconciling the Senate and House health care bills, according to three Democratic congressional aides.

The decision means that the White House, Senate Majority Harry Reid and House Speaker Nancy Pelosi will attempt to reach an agreement through private negotiations with key lawmakers. Once a deal is struck, the bill will go back to the House for passage, then to the Senate and on to the president’s desk — a legislative path that has been described as “ping pong.”

The decision to bypass the conference committee, which the aides said came during an Oval Office meeting Tuesday, formalized what many Democrats had long known: If they have any hope of passing the health care bill quickly, they would need to circumvent the normal order of business.

But the move — though not unusual in the increasingly gridlocked Congress — has drawn sharp criticism from Republicans and even some Democrats, who say Obama is not living up to his promise of a transparent process.

If you were curious, here are a few examples of the President promising transparency throughout the campaign, via Breitbart TV:

Newt Gingrich to Headline STEWARD Event

2010-01-05T17:06:00.002-05:00

STEWARD today announced former Speaker of the House Newt Gingrich will headline our upcoming Grassroots Communications Conference.

The event is scheduled for January 30th at Southern New Hampshire University. Free and open to NH residents, visit stewardofprosperity.org/conference for more information and to register.

Here is John DiStaso's Union Leader coverage of the breaking news:

With his profile and penchant for controversy as high as ever, Newt Gingrich will return to New Hampshire for the first time in nearly three years at the end of the month.

The Granite Status has learned that Gingrich, the former U.S. House speaker and author of the mid-1990s ‘Contract with America,’ will keynote a ‘Grassroots Communications Conference’ sponsored by businessman Fred Tauch's…STEWARD watchdog organization on Jan. 30. The daylong event is scheduled to be held at Southern New Hampshire University in Manchester. …

He last visited New Hampshire in the spring of 2007 for a book signing and to organize workshops for a nationwide ‘Solutions Day’ that his 527-group, American Solutions for Winning the Future, held in September of that year. Gingrich can been seen almost nightly on one news network talk show or another commenting on health care, the war on terrorism, the Obama administration and the state of the GOP.

In New Hampshire, he'll join other speakers at the conference in talking about "emerging methods of communications to reach voters, constituents and activists," according to STEWARD.

In a release to be issued later this week, STEWARD, an acronym for Save The Economy Without Accumulating Record Debt, says the conference "will empower participants to disseminate a conservative message, organize and mobilize online."

Gingrich noted in a statement released to the Granite Status that in the summer of 2008, American Solutions ‘gathered the signatures of 1.5 million Americans who supported our “Drill Here, Drill Now, Pay Less”’ campaign in support of offshore drilling, an online grassroots achievement that created the momentum that led to the repeal of the executive and legislative branch bans.

"I look forward to discussing with New Hampshire conservatives how to utilize new media to drive our message of safety, prosperity and freedom and spur people to demand real change from their government," Gingrich said.

Other speakers so far scheduled for the conference are Andrew Breitbart, publisher of Breitbart.com and Breitbart.tv, and Stephen Gillett, Starbucks' Digital Ventures senior vice president, chief information officer and general manager.

Concord political strategist Michael Dennehy, a consultant for STEWARD and Tausch, called Gingrich "the pre-eminent creative thinker in the Republican Party. We could not ask for a better national figure to help underscore the importance of new media communications in campaigns and public advocacy today."

States and the Stimulus: The Gift that Keeps on Giving

2010-01-04T10:29:00.002-05:00

The Weekend Edition of the Wall Street Journal had an interesting read detailing one of the stimulus concerns that opponents have been warning of since the beginning: States will be unable to continue the excessive spending in the new year.

Read it all if you have a chance, but here is the meat:

First, in most state capitals the stimulus enticed state lawmakers to spend on new programs rather than adjusting to lean times. They added health and welfare benefits and child care programs. Now they have to pay for those additions with their own state's money.

For example, the stimulus offered $80 billion for Medicaid to cover health-care costs for unemployed workers and single workers without kids. But in 2011 most of that extra federal Medicaid money vanishes. Then states will have one million more people on Medicaid with no money to pay for it.

A few governors, such as Mitch Daniels of Indiana and Rick Perry of Texas, had the foresight to turn down their share of the $7 billion for unemployment insurance, realizing that once the federal funds run out, benefits would be unpayable. "One of the smartest decisions we made," says Mr. Daniels. Many governors now probably wish they had done the same.

Second, stimulus dollars came with strings attached that are now causing enormous budget headaches. Many environmental grants have matching requirements, so to get a federal dollar, states and cities had to spend a dollar even when they were facing huge deficits. The new construction projects built with federal funds also have federal Davis-Bacon wage requirements that raise state building costs to pay inflated union salaries.

Worst of all, at the behest of the public employee unions, Congress imposed "maintenance of effort" spending requirements on states. These federal laws prohibit state legislatures from cutting spending on 15 programs, from road building to welfare, if the state took even a dollar of stimulus cash for these purposes.

One provision prohibits states from cutting Medicaid benefits or eligibility below levels in effect on July 1, 2008. That date, not coincidentally, was the peak of the last economic cycle when states were awash in revenue. State spending soared at a nearly 8% annual rate from 2004-2008, far faster than inflation and population growth, and liberals want to keep funding at that level.

Slew of New Year's Taxes

2010-01-01T14:30:00.002-05:00

As 2010 begins, New Hampshire Watchdog has put together a couple of lists detailing about a dozen likely or re-instituted state and federal taxes we will face in the new year.

First, in addition to the 30-plus new or increased taxes and fees already instituted, here are 5 other increases Democrats in Concord are likely to consider at the suggestion of Department of Revenue Commissioner Kevin Clougherty:

1) Real Estate Transfer Tax: The Real Estate Transfer Tax, or RETT, is among the most cyclical of New Hampshire’s business taxes. It booms when the real estate market is hot, and craters when real estate slows. Currently, home buyers and commercial real estate buyers pay a 0.75% tax when real property is transferred. Clougherty outlines three possible expansions of the RETT. The DRA Memo charts projected revenues for Fiscal Years 2010 and 2011 based on the current rate, and on increasing the rate to 1%, 1.15%, 1.25%, and 1.5%. It also calculates how much revenue would be generated if the tax included an exemption on the first $25,000, $50,000, $75,000, or $100,000 in property value. According to the DRA memo, the RETT would have generated anywhere between $69 million to $200 million over the next two years based on the tax rate and exemption levels chosen. However, the most controversial change suggested by the DRA Memo as an extension of the RETT to cover refinancing as well as property transfers. According to Clougherty, taxing real estate refinancing would generate revenue as the real estate market and interest rates decline, cushioning the cyclical nature of real estate tax collections. Governor John Lynch originally supported this expansion of real estate taxes, which met with thunderous protests from the real estate community, who argued that the new tax would target homeowners attempting to refinance their mortgages in order to stay in their homes. Lynch and the Legislature eventually shelved the Refi Tax

2) BET Credits against the BPT: As the Business Enterprise Tax was designed as a way to spread New Hampshire’s business tax burden away from its largest firms and over a broader base, the new tax was written so that no business would pay twice. All firms pay the BET, but only businesses making a profit in a given year pay the Business Profits Tax. However, tax payments under the BET are fully credited against BPT liability. Effectively, businesses pay either the BET or the BPT, which is higher, but not both. The DRA Memo cites 2208 statistics in which 18,154 tax filers applied for $121,506,595 in BET credits against the BPT, of which $41 million was from the top 100 business taxpayers. Clougherty says that since the business tax base shrinks during a recession, lawmakers can’t count on that large an increase in revenues if the credit were removed this year. He also warns that the tax increase would have a disproportionate impact on the largest taxpayers, and hit the banking community especially hard due to the way that interest in treated under the tax.

3) BET Thresholds: The Business Enterprise Tax requires businesses large and small to pay the state based not on their profits, but on their total receipts. The tax was put in place in 1993 to broaden the state’s business tax base, which had concentrated to a few large, profitable businesses paying the Business Profits Tax. But the BET only kicks in after a business has reached a threshold of $150,000 in gross receipts or $75,000 in enterprise value. Once a business grows to that level, it pays 0.75% in taxes on every dollar that comes in the door, regardless of expenses. The DRA Memo suggests lowering those thresholds to their original levels of $100,000 and $50,000, and estimates that the lower threshold would generate an additional $2 million annually.

4) Net Operating Losses: Under current law, businesses are allowed to carryover net operating losses into future tax years in order to offset future tax liability. The carry forward amount for NOL’s generated after July 1, 2005 is $1 million each year. The DRA Memo mentions that the original carry forward amount was limited to $250,000 annually back in 1988, and was NOL’s could only be carried over for five years. The DRA Memo does not estimate how much additional revenue would be generated by reverting to the lower limits.

5) Online Booking of Room Rentals: According to the DRA Memo, online travel companies charge customers for hotel occupancy taxes when they book their rooms, but pay only a portion of those taxes to local and state governments. Clougherty argues that the issue in current under litigation, but recommended that New Hampshire create a new category of “wholesaler” to apply to online travel companies. However, administering this tax, and collecting it from out-of-state businesses with no link to New Hampshire could be difficult. Clougherty explains that his office is working with the Federation of Tax Administrators to draft federal legislation to enable states to collect taxes charged by online travel companies.

Federally, a number of tax increases kicked in at the stroke of midnight due to inaction by Democrats in Washington (via the Heritage Foundation):

The House has passed legislation (H.R. 4213) that would have extended 63 current tax provisions, but the Senate failed to bring this bill to a vote. Thus, all of these provisions expired at midnight last night. Notable provisions as reported today by Tax Notes include:

Deduction of state and local general sales taxes (section 164) (Personal Tax Incentives)

Additional standard deduction, up to $500 for individuals and $1,000 for couples, for state and local property taxes (section 63) (Personal Tax Incentives)

Research tax credit and alternative simplified credit (section 41) (General Business Tax Incentives)

New markets tax credit (section 45D) (Community Assistance Provisions)

Empowerment zone incentives (sections 1391 and 1202) (Community Assistance Provisions)

Renewal community tax incentives (sections 1400E, 1400F, 1400I, and 1400J) (Community Assistance Provisions)

District of Columbia Investment Incentives (sections 1400, 1400A, 1400B, and 1400C) (Community Assistance Provisions)

Net disaster loss designation and $500 limit per casualty for personal casualty losses attributed to federally declared natural disasters (section 165) (General Disaster Relief Provisions)

Expensing for qualified disaster expenses (section 198A) (General Disaster Relief Provisions)

Biodiesel and renewable diesel incentives (section 40A) (Energy Incentives)

Alternative motor vehicle credit for heavy hybrids (section 30B) (Energy Incentives)

Cash for Caulkers Boondoggle in Texas

2009-12-29T10:39:00.000-05:00

By now, most of us have heard of the Cash for Caulkers scheme (if not, you can read more about it here).

Turns out, like much of the stimulus cash, these funds are being wasted on mostly administrative costs. The latest example out of Texas has that state spending $2 million to weatherize 7 homes. An average cost of $285,000 per home!

For more, check out this video from Fox News' "Cashin In."

More on the Willy-Nilly Stimulus Bill(y)

2009-12-22T16:25:00.000-05:00

The Washington Examiner asks:

Has the American Recovery and Reinvestment Act -- known more commonly as the stimulus -- been a well-intentioned failure as a jobs-creation bill, or is it a huge porky slush fund that was created without much thought?

and answers:

President Obama promised that his stimulus package would be, among other things, "targeted." Our own Mark Hemingway reported recently a study of stimulus spending that demonstrated there is no rhyme or reason to stimulus spending in terms of local unemployment. ...

Nothing in the data suggests that higher-unemployment states are more likely to get larger amounts of money per capita. It appears that very little thought went into directing funds toward the states most in need of jobs during the first round of stimulus funding, which ended September 30.

Here is the graph Hemingway constructed to demonstrate his point:

("Each square represents a state (or D.C.), and each state sits along the two axes based on its unemployment rate and its amount of stimulus spending per congressional representative. (Congressional Districts contain roughly the same number of people nationwide).")

"Senate Plan will Cost NH"

2009-12-22T14:17:00.002-05:00

That is the headline to a quick story in today's Union Leader as well as the simple message from the president and general manager of Anthem Blue Cross Blue Shield to NH's health insurance customers:

[E]xcise taxes on expensive health plans and a tax hitched to the ranks of those covered by not-for-profit insurers in each state both will add costs to local consumers and employers.

The tax on so-called Cadillac health plans will hit the state because health care costs in the area are high, a fact reflected both in medical bills and insurance premiums.

[President and general manager Doug] Wenners said disproportionately large numbers of both small and bigger businesses offer plans that will exceed the thresholds at which the excise tax begins to apply -- $23,000 per family, and $8,500 per individual.

The state will also be hit by a higher than average share of a national tax that raises a total $6.7 billion, but exempts those covered by not-for-profit plans. A higher percentage of people are insured by for-profits in New Hampshire than in any other state, Wenners said.

$4 Billion More in Earmarks

2009-12-21T17:17:00.001-05:00

Remember that?

President Obama again broke that pledge today by signing a defense appropriations bill chock full of pet projects and pork barrel spending, much of which has nothing to do with national defense.

The Wall Street Journal reports:

But the earmarks in the defense-spending bill could point to a longer-term clash between lawmakers and Mr. Obama, who campaigned on a pledge of changing the way Congress allocates earmarks. Mr. Obama has said that earmarks can be a waste of government funds and wants more public information about how they are awarded by Congress.

Member of Congress in both parties defend the use of earmarks and say that they are often for worthy projects.

Among the earmarks in the Defense bill: $18.9 million for the Edward M. Kennedy Institute for the Senate sponsored by Sen. John Kerry (D., Mass.); a $23 million item for the Hawaii Healthcare Network, sponsored by Senate appropriations Chairman Daniel Inouye (D., Hawaii); a $20 million appropriation for the National World War II museum in New Orleans, by Democratic Sen. Mary Landrieu and Republican Sen. David Vitter of Louisiana; and $5 million for a Heritage Center at San Francisco's historic Presidio, an item included by House Speaker Nancy Pelosi in her "community funding requests." ...

As usual, many of the top recipients of earmarks in the defense bill were high-ranking appropriators: Mr. Inouye got 37 earmarks totaling $198.2 million, while ranking Republican Thad Cochran (R., Miss.) got 45 totaling $167 million. Mr. Inouye also is chairman of the defense subcommittee, and Mr. Cochran is the ranking member.

On the House side, defense subcommittee chairman John Murtha (D., Pa.) sponsored 23 earmarks totaling $76.5 million, while ranking Republican C.W. "Bill" Young got 36 totaling $83.7 million, according to Taxpayers for Common Sense.

Line by line, huh? Maybe next year, but not holding our breath.

Chat With Governor Lynch Today

2009-12-21T07:30:00.001-05:00

This morning (Monday December 21, 2009) at 10am Governor Lynch will take part in an online chat hosted by the Live Free or Die Alliance. This is your chance to question the Governor directly with regards to the overspending in Concord and the 38 new taxes and fees (including the new LLC tax) instituted to pay for it all.

Here is how the LFDA describes the chat:

The LFDA will host its inaugural online chat event with Governor John Lynch on December 21st at 10:00am. Former Governor Steve Merrill will participate as Moderator in what is sure to be an informative session on the issues facing the state.

Anyone can participate in this live chat event. Once you are logged in, you'll be able to email your questions in to Governor Lynch directly about state and community issues that affect you, and listen live as he answers.

Visit the LFDA now to register and take part in today’s chat!

More Data Suggests Politicalization of the Stimulus

2009-12-18T16:24:00.003-05:00

A report released by the Mercatus Center at George Mason University suggests stimulus dollars thus far have been doled out without regard to the levels of unemployment in a particular area. Instead, the report found, "Democratic districts received 1.6 times more awards than Republican ones" and "Democratic districts also received 1.89 times more stimulus dollars than Republican districts."

It had been reported from the beginning that the stimulus was crafted to reward favored industries. This news that distribution is also favoring a particular party is yet another strike against the increasingly unpopular bill. Fox News reports:

"You would think, right, that if the administration believes in its theory that government money can create jobs, they would spend a lot of money in districts that have high unemployment," study co-author Veronique de Rugy said. "We found absolutely no relationship. It just kind of shows that the money is spent kind of randomly."

Rather, the study found that Democratic congressional districts received 1.89 times more money than GOP districts. The average award for Democratic districts was $439 million, while the average award for Republican ones was $232 million.

On average, Democratic districts also got 152 awards, while Republican ones got 94.
The data is sure to fuel skepticism about the $787 billion stimulus bill passed in February that only garnered three Republican votes. While the administration claims it has created 640,000 jobs, critics point to the still-soaring 10 percent unemployment rate in arguing that the stimulus has had a nominal effect.

Oddly, the Mercatus study found far more stimulus money went to higher-income areas than lower-income areas.

"We found no correlation between economic indicators and stimulus funding. Preliminary results find no effect of unemployment, median income, or mean income on stimulus funds allocation," the report said.

Hate to Say We Told You So

2009-12-15T17:36:00.001-05:00

Ten months since passage of the federal stimulus bill, the concerns expressed by many that the funds were simply an expensive, short-term fix are coming to fruition (emphasis ours):

The summer of 2009 was a boom time for Pike Industries and other paving firms in the state as $130 million in federal stimulus funds poured into the state, the equivalent of a full year of spending for the state Department of Transportation's typical highway and bridge program.

But with $110 million of the highway stimulus already spent or committed under the American Recovery and Reinvestment Act, prospects are not as bright for the coming construction season.

"We had a good year and I'm a big fan of what the stimulus did for us. The state Department of Transportation did a great job of getting the stimulus money out in a timely manner so it could have an immediate impact. But next year looks pretty bleak with only $20 million left," says Christian Zimmermann, Pike's CEO.

Democrats' LLC Tax

2009-12-14T17:22:00.002-05:00

The New Hampshire chapter of Americans for Prosperity has a solid write up on the proposed LLC tax and an important call to action for anyone concerned with preserving small businesses in New Hampshire:

Mark your calendar for December 16, 2009 and promise yourself that you and others will take the time to testify at the only public hearing for the 5% Tax on LLC’s and Partnerships which the Department of Revenue Administration (DRA) plans to hold at 10:00am at their Concord office on 109 Pleasant Street.

This past June, when the NH Legislature was voting on HB2, the state budget, some powerful Democrats decided to slip into the bill a 5 % interest and dividends tax on individuals for any distributions they receive from a Limited Liability Corporation (LLC) and Partnerships, this is an Income Tax!

Because this was slipped into HB 2 at the eleventh hour, there was no ability for our taxpayers to testify on this issue. Now, the DRA has written the rules for this 5% tax on all LLC’s and Partnerships throughout New Hampshire.

There are well over 10,000 LLC’s and Partnerships in New Hampshire made up of small business men and women who are about to get a wakeup call from big brother; “You owe us more money!” ...

This is a game that different state agencies play with public hearings on rule making; if you wrap the hearing around holidays no one will show up and the proposed rules will slide under the radar screen and be approved, which will carry the same impact as law. The state is not serving our taxpayers by allowing mischief like this to happen, it is wrong and must stop.

Wednesday's hearing will be held at 10am at the Department of Revenue Administration's Concord office at 109 Pleasant Street. Please attend if you can.

Also, consider signing this petition started by two New Hampshire small businessmen concerned with the impact of the new LLC tax.

$1.8 Trillion in New Debt

2009-12-10T16:38:00.002-05:00

Hoping to somehow avoid an election year backlash over the ballooning federal debt, Democrats in Congress plan to lift the debt ceiling by $1.8 trillion before the end of the year.

Yes, you read that sentence correctly. Only in Washington:

In a bold but risky year-end strategy, Democrats are preparing to raise the federal debt ceiling by as much as $1.8 trillion before New Year’s rather than have to face the issue again prior to the 2010 elections.

“We’ve incurred this debt. We have to pay our bills,” House Majority Leader Steny Hoyer told POLITICO Wednesday. And the Maryland Democrat confirmed that the anticipated increase could be as high as $1.8 trillion — nearly twice what had been assumed in last spring’s budget resolution for the 2010 fiscal year.

The leadership is betting that it’s better for the party to take its lumps now rather than risk further votes over the coming year. But the enormity of the number could create its own dynamic, much as another debt ceiling fight in 1985 gave rise to the Gramm-Rudman deficit reduction act mandating across-the-board spending cuts nearly 25 years ago.

The one positive that may come of this debt allowance may be Senator Gregg's intention to attach his deficit reduction task force legislation to any bill containing a ceiling increase.

Stimulus Investigations

2009-12-09T17:39:00.002-05:00

Elected officials in both Houses of Congress are calling for investigations into how millions in stimulus dollars have been spent.

In the Senate:

Sens. John McCain and Tom Coburn are singling out 100 examples of stimulus spending they call unnecessary and unlikely to create many jobs.

In a report released today, the two Republicans take aim at grants for the arts and academic research projects, spending to boost tourism and leisure facilities, and administration and advertising costs associated with the $787 billion stimulus package. Water taxis, “little-used” bridges and “low-priority” renovations to roads, buildings and airports also come under fire.

A research project to study young adults’ use of malt liquor and marijuana as well as a National Institutes of Health grant looking at the connection between female college students’ alcohol consumption and casual sex both score highly on McCain and Coburn’s list of dubious spending. …

The duo, who have railed against “wasteful spending” in recent years, put out their “stimulus checkup” shortly before President Barack Obama made a speech at the Brookings Institution outlining new job-creation proposals.

McCain, from Arizona, and Coburn, from Oklahoma, say the projects they’ve identified “raise questions about how stimulus money has been used so far.”

And in the House of Representatives:

Four Republican lawmakers demanded an audit of President Obama's $787 billion stimulus program on Wednesday following reports of exaggerated or inaccurate accounts of the number of jobs created.

Reps. Joe Wilson of South Carolina, Jack Kingston of Georgia, Mark Souder of Indiana and Jeff Miller of Florida called for the creation of a bipartisan commission to investigate the effects of the stimulus bill.

"It's time for Congress to demand answers on behalf of the hardworking taxpayers that we represent," Wilson said. "The misnamed stimulus is one of the largest spending bills in our nation's history and it is critical that American taxpayers receive adequate answers as to the whereabouts of stimulus funds."

Wilson's bill would create a 10-member panel appointed by the president and congressional leaders that would determine how many jobs have been created and the effectiveness of measures taken to prevent improper payments. Then the commission would recommend what changes could be made to save or create more jobs and prevent mismanagement of the funds.

The call for an audit came as news broke that a public relations firm headed by Mark Penn, Hillary Clinton's former campaign strategist, received nearly $6 million in stimulus funds to save three jobs -- a report Penn's company called "fundamentally inaccurate."

Try as they might...

2009-12-09T15:21:00.000-05:00

Although Democrats in Congress and President Obama continue to stress the supposed need for and importance of a second stimulus, it seems the public remains unconvinced:

[A] new Rasmussen Reports national telephone survey finds that just 22% of Americans favor providing federal bailout funds to states with serious financial problems. Fifty-eight percent (58%) oppose giving bailout money to financially troubled states.

On top of that, 56% of Americans oppose the passage of another economic stimulus package this year. While House Speaker Nancy Pelosi and other congressional Democrats are hoping to spend more to combat unemployment, just 33% favor another stimulus plan.

Thirty-six percent (36%) of voters believe the first stimulus plan passed in February has helped the U.S. economy, but 34% say it has hurt the economy.

Most Americans (53%) believe the U.S. economy will be helped more by decisions made by business leaders to help their own businesses grow rather than by decisions made by government officials. Just 29% say decisions made by government officials to help the economy grow will do more.

By a 59% to 24% margin, voters believe that an increase in government spending will hurt the economy.

Obama on the Second Stimulus

2009-12-08T17:37:00.001-05:00

Speaking today before the liberal think tank Brookings Institute, President Obama issued his strongest call yet for a second stimulus bill.

In response, Senator Gregg had this quip to offer, "At least the president's proposal will result in one new job — he'll need to hire a magician to make this new deficit spending appear fiscally responsible."

STEWARD will be keeping an eye out for other statements from state officials signaling their support, or lack thereof, for this next round of federal spending.

Despite Republican criticism concerning record federal deficits, Obama said the U.S. must continue to "spend our way out of this recession" as long as so many people are out of work. More than 7 million Americans have lost their jobs since the recession began two years ago, and the jobless rate stands at 10 percent, a statistic Obama called "staggering."

Congressional approval would be required for the new spending, the amount unspecified but sure to be at least tens of billions of dollars.

"We avoided the depression many feared," Obama said in a speech at the Brookings Institution, a Washington think tank. But, he added, "Our work is far from done."

It was the third time in a week the president had presided over a high-profile event on jobs, responding to rising pleas in Congress that he spend more time discussing unemployment as midterm election season draws near.

Obama proposed new spending for highway and bridge construction, for small business tax cuts and for retrofitting millions of homes to make them more energy-efficient. He said he wanted to extendeconomic stimulus programs to keep unemployment insurance from expiring for millions of out-of-work Americans and to help laid-off workers keep their health insurance. He proposed an additional $250 apiece in stimulus spending for seniors and veterans and aid to state and local governments to discourage them from laying off teachers, police officers and firefighters.

He did not give a price tag for the new package but said he would work with Congress on deciding how to pay for it.

Proposals in Congress being advanced by Democratic leaders that cover much the same ground would add up to $170 billion or more. Administration aides suggested the infrastructure proposals alone being weighed by the president could cost about $50 billion.

That's Some Return on Investment

2009-12-07T17:37:00.002-05:00

A new, quick, analysis of the stimulus' job production numbers has shown one heck of an ROI thus far:

The Obama Administration is touting that their stimulus program has saved or created 640,329 jobs since it was enacted back in February through the end of October. This number is updated and posted on the Administration’s recovery.gov web site. That amounts to $246,436 per job based on the $157.8bn that has been awarded so far! Total compensation earned by the average payroll employee during October, on an annualized basis, was $59,867. If the government had simply used the funds awarded so far to pay for a year’s worth of labor, that would have paid for 2.6mn jobs!

It will be interesting to see what the Democrats do to improve that statistic in the next stimulus package they push.

Policy U-Turn

2009-12-05T16:45:00.002-05:00

Former Congressman Charlie Bass had an op-ed in yesterday's Roll Call, co-authored with Grover Norquist, the founder of the DC based think tank Americans for Tax Reform. Certainly worth a read:

Earlier this year, in the effort to turn our economy around and spur job growth, our leaders in Washington, D.C., were faced with two very different policy paths. Down one path was a return to the old-school big-government, big-spending, anti-corporate policies of the late 1970s — a path once thought to be relegated to the ash heap of history. The other path was one that has been blazed by most of the industrialized world at this point — a path that recognizes that lower corporate taxes are essential to competitiveness in this global economy, and that lower taxes create jobs. Unfortunately, President Barack Obama and Congressional Democrats chose the big-government, big-spending, anti-corporate path — and the results have been disastrous.

The approach of Obama and the Democrats has failed to turn the economy around, and, in fact, has resulted in an unemployment rate of at least 10 percent — a 26-year high. Indeed, despite administration claims about jobs saved or created, 2.8 million jobs have been lost since the stimulus became law. While the trillion-dollar “stimulus” has failed to deliver the jobs the administration promised, it has, unfortunately, succeeded in ballooning our nation’s deficit and piling on to a sky-rocketing national debt.

If we want an economic turn-around, then it is time for a policy U-turn.

Anti-corporate populism is certainly en vogue today. Some of the ire is well-deserved — the greed of a handful of corporate leaders is, in part, responsible for the economic troubles we face today. Unfortunately, however, much of this anti-corporate populism is the product of opportunistic politicians desperate to find someone to blame.

The truth is we cannot have meaningful job creation without policies that create an environment in which companies can grow and prosper, and a critical component of such an environment is a reduction in the corporate tax rate.

The United States was once the global leader in creating a tax environment that encouraged economic growth and created jobs. Indeed, it was the U.S. under Ronald Reagan in 1986, joined by the Margaret Thatcher-led Great Britain, which started the global wave of corporate tax cuts. The 1986 cuts, which lowered the top rate from 46 percent to 34 percent, marked the largest cut in the corporate rate since the tax was created in 1909.

As recently as 1980, the top corporate tax rates in industrial countries averaged 50 percent. Where Reagan and Thatcher led, however, the rest of the world followed. In fact today, the average top corporate tax rate for countries in the European Union is now 24 percent.

Cutting the corporate tax rate has proven to be a powerful force in spurring economic growth and development. According to Daniel Mitchell at the Cato Institute, the reason is simple. “Thanks to globalization,” he wrote, “it is much easier for capital to cross national borders, and investors naturally prefer lower-tax jurisdictions.”

Unfortunately, the U.S. has fallen far behind our global competitors in this critical economic trend that we once spearheaded. The top corporate rate in the U.S. has actually ticked up from 34 percent in 1986 to 35 percent today. In fact, our top corporate rate is now the second highest among countries in the Organization for Economic Cooperation and Development. Ireland, by contrast, has a top corporate rate of just 12.5 percent.

Cutting the corporate tax rate does not necessarily mean a drop in the revenue generated by the tax, just as raising the rate does not necessarily result in an increase in revenue. According to the nonpartisan Tax Foundation, “Many people would expect high tax rates to yield high tax revenues, but the reverse is often the case. Collection data from 2002 (most recent) demonstrate that many countries with high corporate tax rates — such as the U.S., Germany, and France — have lower-than-average corporate tax collections as a percentage of total tax collections. In fact, of the 13 states with above-average corporate tax rates, nine of them have below-average collections.

The converse is also true: Of the 15 states with below-average corporate tax rates, six of them (including Ireland, which has the lowest corporate tax rate in the OECD) collect higher-than-average revenue. In fact, only 13 of the 30 OECD countries meet traditional expectations by matching their high corporate rates with high corporate revenue or their low corporate rates with low corporate collections.

Democratic opposition to reductions in the corporate tax code and protectionist economic policies that they advocate simply ignore global economic realities. These positions may sell well to their liberal base, but the implementation of these policies is stunting economic growth and putting American businesses at a strategic disadvantage in the international marketplace.

Indeed, almost every economist agrees that the anti-trade, anti-corporate policies currently advocated by the Democrats costs jobs.

To grow the economy and create jobs, we need policies that encourage the growth of private business — not the growth of federal government. Cutting the corporate tax rate will spur economic investment and allow businesses to grow and add new jobs. The road back to a strong economy is a long one, but we won’t ever get there if we continue policies that keep us headed in the wrong direction.

Investor's Business Daily Slams "Job Summit"

2009-12-03T13:51:00.002-05:00

IBD isn't expecting much from today's White House job summit and they weren't afraid to say so in a column posted last night. Certainly worth a quick read.

The White House will hold its jobs summit Thursday. Don't expect this administration, so deeply devoted to government, to actually do anything that will create jobs for a country so in need of them.

Earlier this week, we published a chart showing the percentage of each president's Cabinet appointments with prior private sector experience going back to the first Roosevelt administration.

It was no surprise that not a single White House in more than a century has had a smaller ratio than the current administration. Only the Kennedy — less than 30% — and Carter — just over 30% — administrations were close to the Obama mark of less than 10%.

It is the height of hubris for an administration in which fewer than one in 10 Cabinet appointments have private-sector experience to hold a meeting with the goal of creating jobs.
The government, from lawmakers to bureaucrats, does not create jobs. It can move jobs from the private sector to the public through tax-and-spend wealth redistribution policies. But because government spending crowds out private investment, it is not a wealth creator and therefore cannot be a job creator.

Government is often a job killer. Economist Richard Rahn noted during the last Bush presidency that "government spending reduces more jobs in the private sector than it can create in the government sector."

"Countries with large government sectors," such as France and Germany, Rahn said, "tend to have much higher unemployment rates than countries with smaller government sectors."
Economic reality won't matter at the summit, though. What matters are appearances.

The White House wants to make a show of doing something, especially after its policies have done nothing to boost growth or stop the job losses. It would like to erase from public memory the utter failure of the $787 billion stimulus legislation approved just after Barack Obama took office. The administration knows its claim that thousands of jobs have been created or saved by the stimulus is bunk. And it knows the public knows.

But the stench of failed government solutions will remain.

Thursday's summit will be too heavy with union executives and eggheads whose experiences don't go beyond the academy. Neither group has a shining record of creating jobs, and their presence virtually ensures that little worthwhile will be considered.

Organized labor, for instance, contributes to unemployment. Its demands for above-market wages and lavish benefits mean that companies often can't afford to hire as many workers as they want.

Fed’s ‘Backdoor Bailout’ Benefits Wall Street, not Main Street

2009-12-01T15:09:00.000-05:00

A great read from STEWARD's Penny Wise:

Democrats in Congress have been more than happy to faithfully vote for President Obama’s massive bailouts and federal spending spree, which has mostly enriched bankers, financiers and shareholders, but not helped small businesses and Main Street America. This is especially true in New Hampshire, where taxpayers are on the hook for far more than their fair share of the spending, and businesses are still looking for credit to create new jobs.

Healthy New Hampshire banks have received close to $41 million from the federal Capital Purchase Program (CPP) to support the economy in the state. Based on New Hampshire’s size and the $204 billion spent on the CPP portion of the Troubled Asset Relief Program (TARP), New Hampshire’s share should have been almost $983 million. That’s a difference of $942 million that taxpayers in New Hampshire are covering to support economic recovery in other states.

This all gets worse, as a report from the Special Inspector General for the Troubled Asset Relief Program (SIGTARP) details the handling of the bailout of insurance company AIG. The report states:

* Questions have been raised as to whether the Federal Reserve intentionally structured the AIG counterparty payments to benefit AIG’s counterparties — in other words, that the AIG assistance was in effect a “backdoor bailout” of AIG’s counterparties.

* Then-Federal Reserve Bank of New York (FRBNY) President Timothy Geithner and FRBNY’s general counsel deny that this was a relevant consideration for the AIG transactions. Irrespective of their stated intent, however, there is no question that the effect of FRBNY’s decisions — indeed, the very design of the federal assistance to AIG — was that tens of billions of dollars of government money was funneled inexorably and directly to AIG’s counterparties.

* FRBNY’s decision to treat all counterparties equally (which FRBNY officials described as a “core value” of their organization), for example, gave each of the major counterparties (including the foreign banks) effective veto power over the possibility of a concession from any other party. This approach left FRBNY with few options, even after one of the counterparties indicated a willingness to negotiate concessions.

Simply put, FRBNY refused to negotiate with financial institutions willing to take less than full value on credit default swaps with AIG and instead paid all institutions 100 cents on the dollar, costing taxpayers “tens of billions.”

Republican Congressman Darrell Issa detailed the extent of the give-away by stating, “Behind closed doors and with no approval from Congress, the FRBNY added an additional $13 billion of debt on the backs of taxpayers to give a backdoor bailout to AIG’s creditors, including Goldman Sachs, Merrill Lynch, Société Générale and Deutsche Bank. The lack of transparency and accountability in this transaction is disturbing enough. However, there is evidence that this $13 billion expenditure was entirely unnecessary. All of this begs the question why the FRBNY would not drive a better bargain for the American taxpayer.”

Even more amazing is that the Treasury Department recently held a forum on small business financing. In prepared remarks for the forum, Secretary Geithner said the purpose of the forum was “to make sure we are doing everything possible to get credit flowing to small businesses that are seeking to expand and create more jobs.”

The problem for businesses in New Hampshire is that nearly $1 billion of credit that could be used in the state went to banks in other states ($942 million) – all on the heels of egregious taxpayer sell-outs like the “backdoor bailout” for AIG’s clients.

The Treasury Department took tax dollars from Granite Staters and gave it to reckless Wall Street financiers. In less than a year, that took a firm like Goldman Sachs from the endangered species list to paying out billions in bonuses. So while TARP and “backdoor bailouts” may be credited with boosting the stock market and making shareholders richer, small businesses continue to twist in the wind. Hard-working New Hampshire residents are stuck with the bill — and far too many remain unemployed.

Pelosi/Dean: "More Stimulus Equals More Jobs." Huh?

2009-11-30T15:40:00.002-05:00

Democrat leaders are continuing to prime the pump for another stimulus bill sometime early next year. Over the weekend, both Nancy Pelosi and Howard Dean chimed in with the most recent talking point: More Stimulus equals More Jobs:

Pelosi via The New American:

Speaker of the House Nancy Pelosi (D-Calif.) figures that most Americans wouldn’t mind “absorbing” more "stimulus"-spawned government indebtedness if the additional government spending means increasing employment. “So if somebody has the idea that the percentage of GDP of what our national debt is will go up a bit, but they will now — and their neighbors and their children will — have jobs, I think they could absorb that,” Pelosi told bloggers during a conference call on November 24.

Speaker Pelosi thinks that it's a “false choice” to make Americans or their representatives choose between jobs and higher deficits, but when pressed to choose, she believes Americans would rather have jobs.

Of course, Pelosi's analysis overlooks the fact that the money spent by government to "create" jobs must be siphoned out of the economy, destroying jobs. This is true even when the "stimulus" money is created out of thin air through the Federal Reserve, since the infusion of this new money into the economy dilutes the value of already existing money, causing prices to rise. Pelosi may claim that choosing between higher deficits and jobs is a false choice, but in reality government spending (including stimulus spending) and debt are destroying jobs that Pelosi claims need to be created through more government spending and debt.

And Dean via PoliJam and Fox News:

Seeming to be oblivious to the recent media reports that showed that the stimulus job numbers that had been touted by the White House have been grossly inaccurate, former Democratic National Committee Chairman Howard Dean lauded the stimulus package while appearing on Fox News Sunday.

Dean slammed Republicans for attacking a program that he claims has been “unbelievably successful in saving jobs” and added that he is “more optimistic” that small businesses will be helped by the Democratic health care reform bill.

Of course, statistics show that the stimulus has created little by way of jobs. But the package can certainly be found to have added to the nation’s growing deficit, as well as be seen as burdening the future of our country as they are left with a huge debt that must be tackled.

Boomerang Kids

2009-11-24T11:30:00.003-05:00

The last few months have seen a number of stories on the nonexistent job market for teens and recent college grads. A recent Pew study has quantified the effect of the poor economy which, for many young adults, is meaning a shorter Thanksgiving commute:

"The journey home for Thanksgiving won't be quite so far this year for many adults," said researchers Wendy Wang and Rich Morin, who wrote the report. "Instead of traveling across country or across town, many grown sons or daughters will be coming to dinner from their old bedroom down the hall."

Pew's survey and analysis of government data found that the share of adults 18 to 29 who lived alone declined from 7.9 percent in 2007 to 7.3 percent this year. Drops of that magnitude were also seen during or immediately after the recessions of 1982 and 2001.

Roughly one-third, or 35 percent, of boomerang kids said they had lived independently at some point in their lives but had to move back in with their parents. About half of the grown children worked full- or part-time, while 25 percent were unemployed and 20 percent were full-time students. ...

According to the latest Pew survey and census data:

About 20 million people ages 18 to 34 live at home with their parents — roughly 30 percent of that age group. That's up from about 18 million, or 27 percent, in 2005.

About 12 percent of young adults ages 18 to 34 said they were forced to move in with a roommate because of the poor economy.

Fifteen percent of adults 18 to 34 said they had postponed getting married due to the recession. That share increases to 21 percent for adults ages 25 to 34, when many people tend to get married.

Fourteen percent of adults 18 to 34 say they delayed having a baby.

Health Care Overhall Will Cause Rate Hikes in NH

2009-11-23T12:06:00.002-05:00

Anyone who follows this blog, or with a modicum of common sense, probably already knew what today's Portsmouth Herald is reporting but here it is anyways (emphasis ours):

In a new internal study, New Hampshire's largest health insurer says that reform proposals under consideration in Congress will lead to premium increases for a majority of its individual and small business customers in the state.

"We support reform because the current (health-care spending) trajectory as a nation and state is unsustainable," said Douglas Wenners, the president and general manager of Anthem Blue Cross and Blue Shield. "But we believe you have to get to the root causes of medical cost increases and this (reform legislation) does that." ...

Anthem NH is the for-profit subsidiary of Well Point, the nation's largest private health insurer. According to 2008 state figures, Anthem has almost 55 percent of the health insurance market with more than 320,000 members. Anthem officials said the report was prepared in response to inquiries about how reform might impact premiums in the state.

The impact of reform, Wenners explained in an interview with the Herald, depends partly on demographics, premium group size, and health status of premium payers. Some young and healthy individual market members will see major premium increases of up to 93 percent — while other members who belong in a group plan and have average health could, with government subsidies, see a decrease in premiums as much as 9 percent.

The report says "purchasers of average age and average health are expected to face higher premiums post-reform, and we specifically expect a majority of small employer purchasers to face higher premiums post-reform."

Anthem, which insures 5,000 groups with fewer than 10 employees, said that more than 50 percent of New Hampshire small businesses would see significant premium increases under reform.

WMUR's Coverage of STEWARD's Talk Turkey Lunch

2009-11-21T21:58:00.001-05:00

John Stephen at STEWARD's Talk Turkey Lunch

2009-11-21T21:51:00.002-05:00

Bill Binnie at STEWARD's Talk Turkey Lunch

2009-11-21T17:11:00.006-05:00

Jim Bender at STEWARD's Talk Turkey Lunch

2009-11-21T17:11:00.005-05:00

Ovide Lamontagne at STEWARD's Talk Turkey Lunch

2009-11-21T17:10:00.005-05:00

Kelly Ayotte at STEWARD's Talk Turkey Lunch

2009-11-21T17:10:00.004-05:00

Straightening out the mess

2009-11-19T20:49:00.002-05:00

Following the revelations of phantom Congressional Districts receiving federal stimulus dollars, the Administration and the Recovery.gov team have rushed to correct the glaring errors. Today's Foster's Daily Democrat provides some background on New Hampshire's 4th, 6th, and 22nd Districts:

The errors also explain why Recovery.gov listed New Hampshire as having congressional districts "4" and "27." In both cases, there was a mix-up between the location of the actual work and the home state of the company doing it.

In the case of district "4," the contractor is Keene-based Environmental Alternatives Inc., a subcontractor of CH2M Hill Plateau Remediation Company, which was directly contracted by the Department of Energy for nuclear material stabilization and disposition in Richland, Wash. The report should have indicated Washington State's 4th Congressional District, Fitch said.

Recovery.gov listed the project as saving or creating no jobs but receiving $1,033,809.

In the case of district "27," the contractor is Litchfield-based Big Land Properties, LLC, which was directly contracted by the Department of Housing and Urban Development for Section 8 housing assistance at 1490 Meadows Apartments in Albany, N.Y., in the state's 27th Congressional District, Fitch said.

The website had the project saving or creating 2 jobs and receiving $124,774.

There was another error, but this time the work reported being done in New Hampshire's "6th" district actually happened in the Granite State. The project contractor, Metcalf & Eddy of Wakefield, Mass., incorrectly listed the project happening in the district where the company is located in the Bay State. The report should indicate New Hampshire's 1st Congressional District as the company was contracted by the Environmental Protection Agency to perform remediation using in-site chemical oxidation services at the Ottati & Goss site in Kingston.

Second Stimulus

2009-11-18T11:13:00.002-05:00

More evidence today that Congressional Democrats plan to push another massive stimulus bill as they start pulling out all the stops ahead of next year's elections.

As the first $787 billion continues to fail to stimulate job growth, all while generating pages of negative press for the Administration and supportive Democrats, this today from the AP:

House Democrats are looking at swelling deficits further, at least temporarily, on a jobs-producing bill in response to double-digit unemployment and a sense within their ranks that the party needs to do more to put people back to work.

But many of the ideas on the table so far are extensions of last February's $787 billion economic stimulus package — such as unemployment benefits and subsidies to help the jobless pay for health insurance. They maintain the social safety net for the 15.7 million Americans out of work but they don't directly create new jobs.

Aware that the February stimulus bill has not prevented unemployment from reaching 10.2 percent and of public opinion polls showing the free spending measure is losing popularity with voters, Democrats are wary of putting a stimulus label on their new package."

I wouldn't characterize it as a second stimulus," House Majority Leader Steny Hoyer said Tuesday. "I don't want to be as broad as that, I want it to be very targeted on jobs."

Interesting argument there from the Majority Leader. If this second stimulus is supposed to targeted on jobs, what was the first trillion dollars targeted on? You know, the one the was supposed to keep unemployment below 10%?

More Jobs Confusion

2009-11-17T09:08:00.003-05:00

Despite claims of honesty, transparency, and good government from the Administration, this first round of stimulus job numbers has been nothing close.

Just yesterday, the Administration cut 60,000 jobs from their original guesstimate. ABC reports:

The Obama administration, under fire for inflating job growth from the $787 billion stimulus plan, slashed over 60,000 jobs from its most recent report on the program because the reporting outlets had submitted "unrealistic data," according to a document obtained by ABC News. ...

One recipient – Talladega County of Alabama – claimed that 5,000 jobs had been saved or created from only $42,000 in stimulus funds.

"The administration committed from the start to be upfront with the American people about the impact of the Recovery Act. Overall, the recipients provided good information on the impact of the Recovery Act across the country," Rob Nabors, deputy director at OMB, told ABC News Monday. "The test that we used when examining the data for accuracy was, 'Is that reasonable?' When the answer was no, we acted accordingly."

And now this gem from the Recovery website, check out how many jobs were saved in New Hampshire's nonexistent 00th, 4th, 6th, and 22nd districts.

h/t to Grant Bosse for catching this first.

YOU'RE INVITED: Talk Turkey About Spending Luncheon

2009-11-16T11:34:00.005-05:00

This Saturday (November 21st) STEWARD will host the FIRST forum featuring all five Republican candidates for US Senate.

A follow up to last month's wildly successful Chowderfest, the "Talk Turkey About Spending" Luncheon will take place at VFW Post 1698 (26 Peabody Pl) in Franklin, NH from 11 to 1.

The event is free to attend and will include a Thanksgiving style lunch as well as some great conversation with fellow conservatives from around the state.

Space is limited so please visit stewardofprosperity.org/turkey or call 603-415-2600 to RSVP!

We look forward to seeing you this Saturday!

A New Record!

2009-11-13T11:03:00.002-05:00

Though not one we should be celebrating. From the Boston Globe:

The US government deficit hit a record for October as the new budget year began where the old one ended: with the government awash in red ink.

Economists worry that if such a deficit continues it could push up interest rates, further dragging on the fragile economic recovery.

The Treasury Department said yesterday that the deficit for October totaled $176.4 billion, the fifth-largest monthly deficit ever and the 13th straight month to show a deficit - another record.

The deficit for the 2009 budget year set an all-time record in dollar terms of $1.42 trillion. That was $958 billion above the 2008 deficit, the previous record.

More Stimulus (Debt) Equals More Unemployment

2009-11-12T13:33:00.001-05:00

Real Clear Markets provides a look at the three-month moving average (TMMA) of changes in total employment in relation to stimulus spending and the debt incurred:

As the financial crisis gathered momentum in late 2008, the TMMA fell continuously, reaching a bottom of 853,000 jobs lost per month in January 2009. Then this indicator began improving. By June 2009, when stories about "green shoots" were common in the financial press, the TMMA was "only" 230,000. However, it then began falling again. The October BLS numbers pushed the TMMA down to 589,000 jobs lost per month.

Economic growth is supposed to create jobs. However, the U.S. economy shed twice as many jobs (1,332,000) in the third quarter of 2009, when GDP grew at a robust 3.5% annual rate, than it did in the second quarter (691,000), when the economy contracted at a 0.7% rate.

How can this be? To paraphrase the 1992 Clinton campaign, "It's the bonds, stupid!"

The massive sales of U.S. Treasury bonds to finance "stimulus", bailouts, and other government spending is sucking capital out of the private sector and destroying jobs. Once again, the October 6th BLS report tells the tale.

The BLS "household survey" showed job losses of 589,000, while their "establishment survey" showed a reduction of payrolls of only 190,000. This shows that most of the damage is being done in small business, "under the radar screen" of the BLS.

Small businesses-especially new small businesses-account for essentially all net job growth. However, business creation and expansion requires capital, and more and more of the nation's capital is being commandeered by the U.S. Treasury in the name of "stimulus".

The FY2009 Federal deficit was $1.4 trillion. This was almost a trillion dollars higher than FY2008. The capital to buy this additional debt had to come from somewhere, and much of it was squeezed out of business. Here are some indicators, both statistical and anecdotal:

• During FY2009, "Gross Domestic Private Investment" fell by 25% (almost $500 billion/year). It would have needed to grow by 5% to keep the unemployment rate from rising from an already-too-high 6.2%.

• Many venture capital firms are informing entrepreneurs that there is no money available for new startups. The firms say that they must husband their capital to meet the needs of their existing portfolio companies.

• The 500 largest U.S. non-financial companies now hold more than $1 trillion in Treasury bills, amounting to more than 10% of their total assets. Corporate cash flows are rising, but the money is being invested in government bonds, rather than growth.

• Banks have cut credit card credit lines by 25%, or $1.25 trillion. Because small businesses are often financed with personal credit cards, this has a direct impact on small business survival and growth.

A Funny (Sad?) Explanation for Incorrect Stimulus Numbers

2009-11-11T13:26:00.000-05:00

As we discussed earlier, the recent round of stimulus job numbers appears to have included a number of mistakes that hyper-inflated the supposed number of jobs created by the package. It turns out part of that mistake was due to an employees inability to calculate percentages and failure to catch a pretty obvious mistake.

The AP reported the story originally:

President Barack Obama's economic recovery program saved 935 jobs at the Southwest Georgia Community Action Council, an impressive success story for the stimulus plan. Trouble is, only 508 people work there.

The Georgia nonprofit's inflated job count is among persisting errors in the government's latest effort to measure the effect of the $787 billion stimulus plan despite White House promises last week that the new data would undergo an "extensive review" to root out errors discovered in an earlier report.

And the folks at Political Math broke down the error:

This is pretty funny. Or horrifying. Depends on how you want to look at it.

Several days ago, I noted on Twitter that there were a lot of “saved” jobs that weren’t saved at all but actually cost of living increases. About 24 hours after I noted this, there was an Associated Press article about that very phenomena.

Coincidence? Almost certainly. But I’ll flatter myself anyway.

But the laugh riot comes several paragraphs into the article as they look into why Southwest Georgia Community Action Council was able to save 935 jobs with a cost of living increase for only 508 people. The director of the action council said:

“she followed the guidelines the Obama administration provided. She said she multiplied the 508 employees by 1.84 — the percentage pay raise they received — and came up with 935 jobs saved.

“I would say it’s confusing at best,” she said. “But we followed the instructions we were given.”

“Confusing at best”? The multiplication of percentages is “confusing at best”? It seems obvious to me she should have multiplied 508 people by the amount the increase (.0184) and gotten 9.3. But she forgot that you have to divide the percentage by 100 before you multiply.

The fact that she had “saved” more jobs than there were people in the organization should have been a tip-off. But this is a pretty common problem with people who don’t have a very good grasp on mathematics… they don’t recognize obvious mathematical errors, they just plug in the numbers and go with whatever comes out.

And this, children, is why you pay attention at school. So you don’t get in the national news for doing something really stupid and then blame it on the instruction manual.

The New Hampshire Eagle Times

2009-11-10T14:03:00.000-05:00

Despite significant economic and budgetary issues, the State of New Hampshire has decided to join the newspaper business, reports today's Nashua Telegraph:

The state of New Hampshire last week agreed to guarantee 75 percent of a $250,000 loan from an Upper Valley bank to the new owner of the Eagle Times, an unusual deal because it involves a daily newspaper and the government it covers.

The Executive Council on Wednesday unanimously approved without debate the “working capital loan guarantee,” which would be administered by the New Hampshire Business Finance Authority.

Under the deal, the BFA and the state would be liable to pay up to $187,500 to Connecticut River Bank if Eagle Printing & Publishing LLC defaulted on the $250,000 line of credit it would receive from the bank.

Eagle Printing is the entity created by a small Pennsylvania-based newspaper chain which bought the Eagle and a handful of weekly papers out of bankruptcy in September.

Some Strings Attached

2009-11-10T08:29:00.002-05:00

The AP reports that the next round of education stimulus spending will have significant strings attached. Specifically, schools will be required to adhere to President Obama's imposed educational goals:

The Obama administration is ready to hand out more stimulus dollars for schools, but this time, strings are attached. ...

Now [Secretary of Education] Duncan is making it tougher to get the rest of the dollars because the administration wants states to adopt President Barack Obama's vision of reform.

States will have to fill out a far more detailed application that demands information on Obama's broad goals — tougher academic standards, better ways to recruit and keep effective teachers, a method of tracking student performance and a plan of action to turn around failing schools.

For example, states will be required to identify their lowest-achieving schools by name and tell the department how, or whether, officials have tried to turn the schools around. ...

Similar strings are attached to a separate $5 million competitive grant program in the stimulus, nicknamed the "Race to the Top" fund, that Obama was promoting in Wisconsin last week.Obama has already coaxed several states to rewrite education laws and cut deals with unions as they compete for the grants.
And states can't even apply for them yet; those applications are expected later this week.

A New Look at the Same Bad News

2009-11-09T08:23:00.000-05:00

Here is a new look at the failed promise of Obama's stimulus bill, courtesy of the Independent Institute:

Unemployment tops 10%

2009-11-06T15:28:00.001-05:00

It was announced this morning that the Nation Unemployment rate had reached 10.2%. Steward founder Fred Tausch had this to say on the new:

“Paul Hodes and Carol Shea-Porter sold us a false bill of goods. They promised the stimulus would put Americans back to work, but instead the unemployment rate has climbed to its highest level in a generation. The joblessness situation is a tragedy for those who continue to look for steady employment, and it’s a tragedy for taxpayers who will now have to pay for the failed $787 billion ‘jobs’ program.”

The Associated Press provides a look at the then and now of this recession:

Here, by the numbers, are some other ways the work force has changed since September 1982.
___

MORE PEOPLE, MORE WORKERS

110.7 million: Size of the work force in September 1982

154 million: Size of the work force in October 2009
___

THE "HE-CESSION"

10.7 percent: Adult male unemployment rate in October 2009

8.1 percent: Adult female unemployment rate in October 2009

9.5 percent: Adult male unemployment rate in September 1982

8.4 percent: Female unemployment rate in September 1982

ANALYSIS: The greater disparity between men and women in this recession reflects the heavy impact of layoffs in male-dominated fields, such as construction and manufacturing. Industries with higher female employment, namely education and health care, have actually added jobs during the recession.
___

EDUCATION MATTERS ...

15.5 percent: Unemployment rate in October 2009 for those without a high school diploma

11.2 percent: Rate for high school graduates

4.7 percent: Rate for college graduates

3 percent: Unemployment rate in March 1982 for college graduates (at the time, figure was reported once a year)
___

... BUT IS NO GUARANTEE

6.8 percent: Proportion of unemployed with college degree in September 1982

14.7 percent: Proportion in October 2009

ANALYSIS: College graduates still have much lower jobless rates than those with less education, but they are more likely to be unemployed than in 1982. Job cuts in the financial industry and in high-skilled manufacturing, such as the aerospace industry, have caught up with them, according to Gary Burtless, an economist at the Brookings Institution. And companies in all sectors are more willing to cut middle managers than in previous recessions, he added, which also affects college graduates.
___

LONGER JOBLESSNESS

16.6 weeks: Average length of unemployment in September 1982

26.9 weeks: Average length in October 2009, a record

ANALYSIS: More than a third of the jobless in October were unemployed for 6 months or more, compared with less than 18 percent in September 1982. One reason is that layoffs were more likely to be temporary back then, as manufacturers furloughed workers until demand returned. But last month only 10.9 percent of the unemployed were on temporary layoff, compared with 22.2 percent in 1982.
___

AFRICAN-AMERICAN UNEMPLOYMENT DOWN

15.7 percent: Black unemployment in October 2009

19.7 percent: The rate in September 1982

ANALYSIS: While unemployment among African-Americans is higher than the nationwide rate, it is much lower than in 1982. That reflects both good and bad trends, according to Roderick Harrison, a senior research scientist at Howard University. On the positive side, there is a much larger black professional middle class that is less subject to layoffs than was the case 26 years ago, he said. But on the negative side, more African-American men have dropped out of the labor force after giving up looking for work, Harrison said — that means they aren't reflected in the unemployment statistics.
___

HIGHEST UNEMPLOYMENT STATES, September 1982

Michigan: 15.8 percent

West Virginia: 15.6 percent

Alabama: 13.8 percent

Ohio: 13.1 percent

Illinois: 12.2 percent
___

HIGHEST UNEMPLOYMENT STATES, September 2009

Michigan: 15.3 percent

Nevada: 13.3 percent

Rhode Island: 13 percent

California: 12.2 percent

South Carolina: 11.6 percent

ANALYSIS: Manufacturers in the rust belt were hit particularly hard in the early 1980s, putting Midwestern states such as Michigan, Ohio and Illinois in the top 5. While Michigan again has the nation's highest unemployment today, states like Nevada and California are suffering from the housing bubble.
___

GRAYER WORKPLACE

4 percent: Teenagers' proportion of the labor force in October 2009

7.7 percent: Proportion in September 1982

Crist Walks Back Stimulus Support

2009-11-05T15:33:00.000-05:00

As the stimulus bill's popularity continues to slip, particularly in light of the fabricated claims related to its effectiveness, at least one high profile Republican is walking back earlier support for the legislation. Given Tuesday's election results and the emergence of a vocal, fiscally conservative wing of the Republican Party, this will be an interesting story to watch as Gov. Crist seeks the Senate nomination.

Charlie Crist on CNN yesterday said he didn't endorse the stimulus package. A snippet:

WOLF BLITZER: Let me interrupt for a second, governor. For a second, do you have any regrets about endorsing the economic stimulus package?

CHARLIE CRIST: Well, I didn't endorse it. I — you know, I didn't even have a vote on the darned thing. But I understood that it was going to pass and I wanted to be able to utilize it for the benefit of my fellow Floridians.

Didn't endorse. Got it? No siree. Yet here's that what Crist said Feb. 10 in Fort Myers when he introduced Barack Obama amid chants of "Yes, we can!":
CRIST: "We've had to cut about $7 billion the past two years and we haven't raised taxes and we're still in balance. But to be candid, it's getting harder every day. It's getting harder every day and we know that it's important that we pass this stimulus package. It is important that we do so to help education, to help our infrastructure, and to help health care for those who need it the most — the most vulnerable among us. And let me finish by saying, Mr. President, we need to do it in a bipartisan way. This issue of helping our country is about helping our country. This is not about partisan politics. This is about rising above that, helping America and reigniting our economy."

When the New York Times...

2009-11-04T22:11:00.002-05:00

begins to question the Administration, you know something must be up. Today's paper contains another interesting look at the questionable stimulus job numbers from a source that isn't commonly heard questioning President Obama:

In June, the federal government spent $1,047 in stimulus money to buy a rider mower from the Toro Company to cut the grass at the Fayetteville National Cemetery in Arkansas. Now, a report on the government’s stimulus Web site improbably claims that that single lawn mower sale helped save or create 50 jobs.

Earlier that same month, when Chrysler got a $52.9 million stimulus order for new cars for the government, the struggling automaker claimed that the money did not save a single job.
Those two extremes illustrate the difficulties in trying to figure out just how many jobs can be attributed to the $787 billion stimulus program. Last week the Obama administration released reports from more than 130,000 recipients of stimulus money in which they claimed to have saved or created more than 640,000 jobs, but a review of those reports shows that some are simply wrong, while others contain apparently subjective estimates.
A spokesman for Toro said the 50-job figure was not accurate, making it one of a number of reports with apparent errors. In many other cases, though, claims of jobs created are simply judgment calls, often by recipients trying to follow complex federal guidelines.

Manchester Voters Say Stop the Spending

2009-11-04T10:16:00.000-05:00

Tired of watching local and state budgets increase at a time when everyday Americans are struggling to make ends meet, voters in Manchester voted to stop the spending by supporting a tax cap in the state's largest city. The Union Leader reports:

"The people of Manchester have spoken," said Mike Biundo, a former Republican state representative who led the push to put the proposal on the ballot.

The proposed amendment to Manchester's City Charter passed with a solid 54.4 percent of the vote, according to unofficial results. The tally was 9,433 in favor and 7,906 opposed. ...

Proponents describe the cap as a "fail safe" that will stop the aldermen from forcing taxpayers to keep digging deeper every year. The cap would keep Manchester's tax rate from growing faster than the rate of inflation, as determined by the National Consumer Price Index-Urban. City spending would be similarly limited.

It would be possible to get around the cap, if 10 aldermen vote to override it. Many aldermen have noted, though, that getting 10 votes is not an easy thing to do.

Mayor Frank Guinta said the cap's passage, combined with a Republican victory in the mayor's race, represented a "strong statement in support of fiscal responsibility."

That, ultimately, is exactly what many voters said they were looking for.

"I do see a lot of wasteful spending," said Michael Biron, a Republican voter in Ward 8. "They should learn how to spend the money better."

Not all of the cap's supporters were Republicans. Heidi Jones, a Democrat who picked Alderman Mark Roy for mayor, said the proposal just felt right.

"Taxes are going up so much," said Jones, who voted in Ward 3, "and we don't see any benefit from it."

NH Revenues Continue to Come in Low

2009-11-03T15:46:00.002-05:00

For the fourth straight month, New Hampshire tax revenues have come in significantly below the rosy projections of Democrats in Concord. The AP reports:

The state received almost $12 million less in October than projected.

Administrative Services Commissioner Linda Hodgdon said there was one bright spot. She said taxes on property sales came in right on target for the first time in many months. The tax is an indicator of home sales.

The state received $204 million during the month. Since July, the state's tax receipts have come in almost $38 million below projections, but Hodgdon said the total does not reflect $6 million the state expects to receive soon.

Hodgdon did not elaborate on this phantom $6 million. Nor did she comment on the ongoing JUA legal battle which is likely to blow another $110 million hole in the budget.

NHGOP Chairman former Governor John H. Sununu released this statement on the news:

The huge shortfall in October’s revenue collections is another indication of the deception built into Governor Lynch’s disastrous budget. The Democrats’ bloated revenue estimates and reckless spending have forced New Hampshire into a fiscal crisis.

The Democrats have spent the last few months trying to cover up their budget disaster and distract from their fiscal mismanagement. However these repeated monthly revenue shortfalls, coupled with the irresponsible use one time money and attempted theft of $110 million from the JUA fund, confirm that their budget was one of the most irresponsible budgets in New Hampshire’s history.

"Featherbedding"

2009-11-02T11:55:00.000-05:00

The Washington Examiner has some choice words to describe the Administration's stimulus job numbers:

When Vice President Biden greeted a group of labor leaders two weeks after President Obama took office, he said, “Welcome back to the White House” — a not-so-oblique reference to their lack of access during the previous eight years under the Bush administration. Judging by the White House’s claims of having “created or saved 650,000 jobs” with the $787 billion economic stimulus program, it appears those labor leaders taught the administration a thing or two during their visit. How else to explain the obvious featherbedding by White House officials in tallying the job numbers released Friday?

Featherbedding occurs when paychecks are issued for nonexistent employees and the money goes directly into union coffers. Thousands of the jobs Obama officials say were saved or created by the stimulus program are no more real than those invisible positions invented by unions to bulk up their treasuries. We know this to be the case because as Obama’s chief economist, Christina Romer, admitted several weeks ago, “It’s very hard to say exactly because you don’t know what the baseline is, right, because you don’t know what the economy would have done without [the economic stimulus program].”

Even if we take at face value the White House claim that it created or saved all these jobs with approximately $150 billion of the economic stimulus money, a little simple math shows the taxpayers aren’t getting any bargains here: $150 billion divided by 650,000 jobs equals $230,000 per job saved or created. Instead of taking all that time required to write the 1,588-page stimulus bill, Congress could have passed a one-pager saying the first 650,000 jobless persons to report for work at the White House will receive a voucher worth $230,000 redeemable at the university, community college or trade school of their choice. That would have been enough for a degree plus a hefty down payment on a mortgage.

Actually, taxpayers would be better off with such a deal, too, compared with the reality of the Obama stimulus program. Among the top 10 stimulus contracts awarded, there is the one for nearly $339 million that allegedly created or saved 41.19 jobs, or about $8.3 million per position. It was even worse with the $258 million contract to Brookhaven Science Associates in New York, where 25 jobs were saved or created, at a cost of $10.3 million per position. Rep. Kevin Brady, R-Texas, the ranking House minority member of the Joint Economic Committee, said it best: “What we know for certain is that 2.7 million payroll jobs have been lost since the Obama stimulus was signed into law, hundreds of thousands of more jobs are being lost each month, and America is so deep in debt, China and France are lecturing us to get our financial house in order.”

Secretary LaHood Visits NH

2009-10-30T17:29:00.004-04:00

As you may know, Transportation Secretary Ray LaHood was in New Hampshire today attempting to defend the stimulus to a state growing more and more skeptical of its impact.

STEWARD put out the following release, lampooning the visit and laying out the real facts:

In the spirit of Halloween, Secretary Ray LaHood and local Democrats gathered today to “dress up” the stimulus package as a New Hampshire success story. It’s not. And for the 53,330 out-of-work Granite Staters, the disguise is more “trick” than “treat.”

With the Democrats talking about the stimulus today, it’s important to recap some key numbers:

· The White House promised 16,000 New Hampshire jobs when it announced the stimulus package back in February. The Administration also said that more than 90% of “American Recovery and Reinvestment Act” (ARRA) positions would be in the private-sector. (The White House, “American Recovery and Reinvestment Act: State-by-state jobs impact,” 2/13/09)

· Last week, the state’s Office of Economic Stimulus disclosed that at least 2,786 of the 3,007 Granite State jobs – or almost 93% – created or “retained” by ARRA were firmly public-sector. (State of New Hampshire, American Recovery and Reinvestment Act Progress Report – Data through September 30, 2009, Office of Economic Stimulus, 10/20/09)

· Although the Obama Administration and local Democrats may point to the Manchester Airport Access Road as a stimulus success, the state’s overall numbers tell a different story. According to the state’s stimulus progress report, a mere 116 ARRA-driven jobs have been in Highway Infrastructure Investment – and winter is nearly upon us. It’s a figure so under-whelming that even Congresswoman Carol Shea-Porter recently acknowledged that the program hasn’t delivered on what Democrats promised.

· In September 2008, New Hampshire’s unemployment rate stood at 3.9%. When the stimulus passed in February, it was 5.7%. Unemployment in the state hit 7.2% in September. (U.S. Department of Labor, Bureau of Labor Statistics)

· 53,330 Granite State residents were unemployed last month. That’s 24,540 more than last year at the same time. (New Hampshire Employment Security, Unemployment Rates, 10/12/09)

· The state has approved more than $407 million in ARRA-backed projects. That figure divided by the 3,007 jobs created or “retained” works out to roughly $135,350 per position.

These numbers are delivering this year’s real Halloween fright. Unfortunately, it seems as though our grandchildren will be taking their children “trick or treating” before the $787 billion stimulus tab is paid.

Stimulus Job Numbers Inflated - Big Time

2009-10-29T12:26:00.002-04:00

A closer look at the White House's stimulus job numbers shows that the administration padded the actual number of jobs saved or created by up $5,000 positions. The Associated Press reports:

The AP review found some counts were more than 10 times as high as the actual number of jobs; some jobs credited to the stimulus program were counted two and sometimes more than four times; and other jobs were credited to stimulus spending when none was produced.
For example:
_ A company working with the Federal Communications Commission reported that stimulus money paid for 4,231 jobs, when about 1,000 were produced.
_ A Georgia community college reported creating 280 jobs with recovery money, but none was created from stimulus spending.
_ A Florida child care center said its stimulus money saved 129 jobs but used the money on raises for existing employees.
There's no evidence the White House sought to inflate job numbers in the report. But administration officials seized on the 30,000 figure as evidence that the stimulus program was on its way toward fulfilling the president's promise of creating or saving 3.5 million jobs by the end of next year.
The reporting problem could be magnified Friday when a much larger round of reports is expected to show hundreds of thousands of jobs repairing public housing, building schools, repaving highways and keeping teachers on local payrolls.

Coverage of the Spending Summit

2009-10-28T18:16:00.002-04:00

From the Union Leader:

The spending summit, attended by about 100, came just a week after a two-day discussion of state tax policy that the House Ways and Means Committee held. Republicans said taxes are only half the discussion, and that spending has to be talked about too.

Timing for state spending controls is off a bit, since a new two-year budget just took effect in July. But speakers yesterday said this is actually the ideal time to start examining what state government should be expected to provide, and how to best organize and pay for it.

Arlinghaus warned that Republicans and Democrats have to work together on the difficult task of reshaping budget priorities.

"If all you want to do is snipe at the other side, you're not going to get anything done," he said. Arlinghaus cautioned that it may take more than one election to turn the ship of state spending "It's a big problem and you can't fix it if the election is first and foremost in your mind," he said. "It's going to take a long time to fix this." ...

Over the past 20 years, spending of state revenues has increased by an average of 9 percent for every biennium Budget increases vary from a 30 percent jump in 1994-95 to a 1.9 percent decline in 1996-97, according to data from the New Hampshire Center for Public Policy Studies.

Lieberman Connects

2009-10-28T13:55:00.003-04:00

Sen. Joe Lieberman (ID-CT) has connected with the concerns of the majority of Americans by saying he will oppose the President's government option health plan because Washington is simply doing and spending too much. This is an excerpt from a Wall Street Journal editorial:

The health-care debate isn't over, notwithstanding the White House-Nancy Pelosi attempt to make it seem inevitable. Majority Leader Harry Reid had barely announced his plan to include a public insurance option when Connecticut Independent Joe Lieberman declared yesterday that he'd join a filibuster against such a Senate bill.

"We're trying to do too much at once," Mr. Lieberman said. "To put this government-created insurance company on top of everything else is just asking for trouble for the taxpayers, for the premium payers and for the national debt. I don't think we need it now."

Bravo, Joe. It's a relief to see at least someone standing up to the Washington rush to rearrange 18% of the U.S. economy without carefully inspecting the cost and the consequences.

Mr. Lieberman added that he'd also oppose a bill that includes Mr. Reid's provision for states to "opt-out" of the public program "because it still creates a whole new government entitlement program for which taxpayers will be on the line." Exactly right again.

Are there jobs to count?

2009-10-27T16:10:00.003-04:00

How to count and classify the jobs created by the federal stimulus remains a nagging question for policymakers and watchdog groups as the money from the package continues to roll out. But still, much of the evidence, no matter the metric, points to lower than expected returns. In the Granite State:

New Hampshire has assigned at least half of its economic stimulus money to various projects or programs, but job totals remain at just 19 percent of initial White House projections.

The equivalent of 3,007 full-time jobs was created or saved with stimulus money through September, according to a report released last week by Orville “Bud” Fitch, director of the governor’s Office of Economic Stimulus.

That’s a big increase from the last quarterly report, when 796 jobs were linked to the program through June. But it remains unclear whether New Hampshire will reach the 16,000-job benchmark touted by the White House

And nationally:

As the government implements the $787 billion stimulus program, the effect of the spending and tax cuts are proving difficult to measure.

Part of the challenge is that assessments of the impact often rely on imagining how the economy would have fared if the stimulus money were spent differently, or not at all. Debates continue today about the effects of the 2001 stimulus program that sent rebate checks to taxpayers.

Complicating matters further: Many spending projects might end up being short-term jolts that fizzle out, raising questions about their effectiveness. The $3 billion cash for clunkers program, funded partially by stimulus money, pulled consumers into auto dealerships nationwide. Auto sales soared in August, then slumped in September. Similar concerns surround the $8,000 tax credit for first-time home buyers that ends next month. ...

As stimulus money slowly is disbursed, the continued troubles in the job market are renewing the fierce political battle about the giant program's performance. If the program is stimulating the economy, why is unemployment rising?

These WSJ graphs add more fuel to the skeptics' fire.

Money Well Spent?

2009-10-26T13:50:00.001-04:00

USA Today reports on the release of some $30 million in stimulus funds to shady defense contractors:

The Department of Defense has awarded nearly $30 million in stimulus contracts to six companies while they were under federal criminal investigation on suspicion of fraud.

The companies claimed to be small, minority-owned businesses, giving them preference in bidding for government contracts, Air Force documents allege. But government investigators found they were part of a larger minority-owned firm and not eligible for small-business contracts.

The Air Force and Army awarded the companies 112 stimulus projects, federal contract records show. It wasn't until Sept. 23 — more than a year after the investigation started — that the Air Force suspended the firms from new federal contracts.

Scott Amey of the non-partisan Project on Government Oversight said the case exposes an oversight gap under the $787 billion stimulus plan and federal contracting in general. "Was there any disclosure of the contractors' missteps prior to them receiving the stimulus money?" he asked.

Air Force Lt. Col. Ann Stefanek said the stimulus projects were awarded independently by officers at military bases who wouldn't have spotted problems unless a contractor was suspended or debarred.

Federal rules let agencies terminate contracts if it's in the government's interest. Stefanek and Army Maj. Jimmie Cummings said the companies' work has been satisfactory and neither branch plans to cancel the stimulus contracts that were awarded before the firms were suspended.

Shea-Porter Stimulus Flip-Flop

2009-10-22T10:18:00.002-04:00

Congresswoman Shea-Porter appears to be walking back her strong support of the floundering stimulus bill. As you may recall, Shea-Porter had this to say after voting in favor of the $787 taxpayer giveaway:

After seven years of mismanagement and no oversight from the Administration, the housing market is in a crisis, the economy is struggling, and families are paying more for everything from groceries to heating oil,” said Congresswoman Shea-Porter. “I’m pleased that we came together in a bipartisan manner to pass this stimulus package. It will put money in the pockets of hard-working American families and help to restore the strength of our economy.

But now, given the stimulus' dismal performance coupled with a tough campaign ahead, local and national media outlets are picking up on Shea-Porter's reversal:

More Stimulus Job Numbers

2009-10-21T15:01:00.002-04:00

Today's Union Leader provides another example of the government growing power of the stimulus bill. Despite a somewhat rosy headline ("State's stimulus benefit put at 3,007 jobs") the devil was in the details:

[Stimulus Czar Bud Fitch] said he favors a method that shows closer to 1,862 jobs were created or saved, based on an assumption that the jobs being counted are full-time and run for a full year. Fitch calculated that ARRA funds have paid for nearly 3.9 million hours of work since money began flowing in the spring.

So far, New Hampshire has taken in grants and contracts worth $407 million from a total of $965 million that has been authorized to date. The funds include money used in state government, aid to local school districts and nearly $20 million in a $25 weekly add-on to unemployment benefits. ...

Fitch's report shows that the bulk of jobs affected by ARRA funding are in education, with 2,041 jobs created or saved under the OMB formula.

Another 745 are in government agencies.Despite the hectic pace of road construction around the state, the formula shows only 116 jobs saved or created under stimulus funding.

At best, then, the numbers show that we are averaging $135,000 per each job saved or created, much worse if we base the math off of Fitch's more conservative estimate.

Even worse, NowHampshire.com reports:

President Barack Obama’s American Recovery and Reinvestment Act (ARRA), commonly known as the stimulus act, created or saved only 221 private sector jobs between February 17th and September 30th NowHampshire.com has learned. ...

According to a report issued on Tuesday by Orville “Bud” Fitch, Governor John Lynch’s designated “stimulus czar,” the stimulus has financed 3,872,686 hours of work in the Granite State. However, the huge majority of the “Full-Time Equivalent” jobs appended to those hours – around 93% of all stimulus jobs, in fact — are government jobs through the State Fiscal Stabilization Fund.

The Geography of Job Losses

2009-10-20T12:09:00.003-04:00

A really interesting, and concerning, look at employment trends over the last five-plus years. Click here for the full animation.

Banks, Wall Street, & President Obama

2009-10-20T09:26:00.002-04:00

Today's Washington Post today examines further instances of big bank executives receiving perks and bonuses funded by taxpayer bailouts:

Even as the nation's biggest financial firms were struggling and the federal government was spending hundreds of billions of dollars to save many of them, the companies as a group were boosting the perks and benefits they pay their chief executives.

The firms, accounting for more $350 billion in federal bailout funds, increased these perks and benefits 4 percent on average last year, according to an analysis of corporate disclosures filed in recent months.

Some chief executives, such as Kenneth D. Lewis of Bank of America and Jeffrey M. Peek of CIT Group, the major small-business lender now on the brink of bankruptcy, each received about $100,000 more than a year earlier for personal use of corporate jets. Others saw an increase in the value of chauffeured services, parking or personal security.

Ralph W. Babb Jr., chief executive of Dallas-based lender Comerica, was compensated for a new country club membership, with an initiation fee and dues of more than $200,000. GMAC Financial Services chief executive Alvaro de Molina benefited from a $2.5 million payment from his company to help cover his personal tax bill.

And despite consistently railing against these practices, President Obama is headed to New York tonight to get some of that money back, in the form of a check made out to the Democrat's campaign committee (emphasis ours):

At separate events in New York City, the president will raise money both for Bill Owens, a Democrat trying to win a special election in an upstate New York congressional district, and for the Democratic National Committee. The national party fundraising event alone is expected to generate between $2 million to $3 million.

Beyond a $30,400-per-couple dinner for the DNC, Obama will attend a health care rally with tickets starting at $100. His comments at that event will be pumped live via webcast to house parties around the nation, where supporters plan to call voters and ask them to lobby Congress to pass a health care reform bill.

The scale of the DNC fund-raiser has raised some eyebrows, given that executives from firms who benefited from the administration's bailout may be attending the event.

Last weekend, top administration officials criticized the size of Wall Street bonuses. Chief of Staff Rahm Emanuel told CNN that "Wall Street is back doing what Wall Street did."

The New York Times reported Tuesday that about half-dozen bankers from financial giants like Goldman Sachs, JPMorgan Chase and Citigroup that received federal money are expected to attend the fundraiser.

Former House Speaker Newt Gingrich told NBC's TODAY show on Tuesday that Obama's attendance is "one more example of the gap between his rhetoric and what happens in reality."

Ovide Lamontagne Speaks at the STEWARD Chowderfest

2009-10-19T16:39:00.003-04:00

Former GOP Gubernatorial Nominee and attorney Ovide Lamontagne speaking at the STEWARD Chowderfest.

Kelly Ayotte Speaking at the STEWARD Chowderfest

2009-10-19T16:36:00.005-04:00

Former Attorney General Kelly Ayotte speaking at the STEWARD Chowderfest (h/t Granite Grok).

Sean Mahoney Speaking at STEWARD Chowderfest

2009-10-19T16:35:00.003-04:00

Businessman Sean Mahoney speaking at the STEWARD Chowderfest (h/t: Granite Grok)

Jim Bender Speaking at the STEWARD Chowderfest

2009-10-19T15:59:00.002-04:00

Businessman Jim Bender addressing the crowd at the STEWARD Chowderfest.

STEWARD Chowderfest Tomorrow

2009-10-16T13:15:00.002-04:00

Don't forget about the STEWARD Stop the Spending Chowderfest tomorrow. We will be inside at the Portsmouth Brewary, so any weather won't be a concern. Here is the Portsmouth Herald's write up on the event, look forward to seeing you tomorrow!

While the chowder at the Steward of Prosperity's "Stop the Spending Chowderfest" may be the traditional white recipe, there will certainly be something of the red variety.
A host of potential Republican candidates for U.S. Senate will speak at Saturday's rally, including Kelly Ayotte, Jim Bender, Ovide Lamontagne and Portsmouth's Sean Mahoney.
Former New Hampshire House Speaker Doug Scamman, of Stratham, will deliver remarks about state spending.
It is no coincidence the group chose Portsmouth to hold its event, said spokesman Jeff Grappone. The Steward of Prosperity, a group committed to holding politicians in Concord and Washington accountable to the taxpayers, wanted to make sure current House Speaker Terie Norelli, D-Portsmouth, could hear their call for lower taxes.
"With the Democrats planning a tax summit in Concord next week, the timing and location of this event — in Speaker Norelli's hometown — is not coincidental," said Grappone. "We're making sure Democrat legislative leaders know that too much spending is what's busting the budget, not too few taxes. Saturday's Chowderfest provides a timely opportunity for fiscal conservatives to send a clear message: low taxes are the result of low spending."
The Chowderfest will take place from 1 to 3 p.m. Saturday at Redhook Ale Brewery, at Pease International Tradeport.
The event is billed by Steward founder Fred Tausch as a "golden opportunity" for fiscal conservatives to gather in opposition of wasteful spending.
"As we move closer to Election Day 2010, it's critical for Republicans to continue building enthusiasm and momentum," said Tausch. "There's no better way to do so than by rallying for fiscal conservatism — and enjoying some great chowder."

Official Stimulus Data Released

2009-10-15T20:52:00.002-04:00

After months of speculation on the effectiveness of the stimulus, today the Administration released some of the first hard data related to the $787 billion spending package. CNN reports:

So far, 30,383 jobs have been created by companies that have gotten $2.2 billion worth of stimulus contracts directly from the federal government. That equates to $71,500 per job based on just the funds that have been distributed.

These firms have been awarded a total of $16 billion.

Stimulus-fueled job creation has become a very controversial issue. The White House has faced blistering attacks by Republicans, who contend that the recovery act has failed to live up to its promise to put Americans back to work.

The Obama administration downplayed the reports released Thursday, saying they represent just a small sliver of the stimulus that's been spent, since the massive recovery act was enacted in February. The first reports detailing the number of stimulus jobs created or saved were submitted last weekend by recipients of stimulus-funded contracts, grants and loans.

New STEWARD Health Care Study Released

2009-10-14T13:13:00.003-04:00

STEWARD has released a new study detailing the disastrous impact ObamaCare will have on New Hampshire's businesses. The Union Leader reports:

New Hampshire's business community would pay $215 million to $229 million to comply with a Democratic-sponsored health care reform bill that has advanced in the House of Representatives, a new study by two conservative economists says.

J. Scott Moody and Dr. Wendy P. Warcholik, writing for Republican activist Fred Tausch's grassroots STEWARD group, conclude that H.R. 3200 contains "hidden penalties for New Hampshire businesses" that will hurt their ability to compete for jobs in an international market.

They criticize the bill's so-called "play-or-pay" mandate and its provision to impose three new marginal brackets to the federal income tax to partially pay for health care reform.

"In the long run," say the authors, "this will discourage job creation in New Hampshire and reduce access to quality health care."

Among the study's key findings:

The "play-or-pay" health insurance mandate would cost Granite State businesses $215 million to $229 million.
New Hampshire businesses that file through the individual tax code would face a combined income tax rate of 47.25%
State business owners would face a higher income tax burden than Canada, France and Italy.

Here is the full text of the study:

STEWARD Health Care Study

NH Jobs News Gets Worse

2009-10-13T12:17:00.002-04:00

The Union Leader reports this morning:

New Hampshire's unemployment rate climbed to 7.2 percent in September and few industries escaped the undertow of dour economic trends.

The number of people out of work increased by 1,430 to 53,330, an estimated 24,540 more unemployed than in September 2008, the state reported yesterday.

The nation's unemployment rate crept to nearly 10 percent in September. The state's unemployment rate was 6.9 in August. It is now nearly double what it was a year ago at this time, according to New Hampshire Employment Security.

At the same time, Governor Lynch is dealing with the impact of the vague budget cuts imposed by the legislature a few months back:

State employees have rejected a tentative contract agreement with the state, by a vote of 2,708-1,875, opening the door for mass layoffs as early as this week.

"I am deeply disappointed the state employees union has rejected a contract that would have implemented furloughs and preserved jobs," Gov. John Lynch said in a written statement released last night.

Lynch said he will meet with department heads this morning to begin implementing plans for layoffs. Employees could be notified this week, with layoffs completed by the end of the month. …

Since the contract was voted down, the old contract will remain in effect until a new one is negotiated. Lynch will have to find another way to save the $25 million in personnel costs mandated by the Legislature.

In the meantime, the State’s unemployment compensation fund is going broke, reports the New Hampshire Business review:

The state’s unemployment compensation trust fund is going broke faster than anticipated, causing the state to borrow more, and possibly earlier, than expected from the federal government in order to continue to pay benefits to the jobless.

There is even a remote chance that unemployment-related payroll taxes on business – which are already scheduled to more than double over the next three years – might have to increase even higher.

The fund, which stood at $240 million at the beginning of last year, is projected to sink to $11 million at the end of this year. And since the fund is some $16 million lower than the last projection, “we will be lucky to be at more than zero” on Dec. 31, said Department of Employment Security Deputy Commissioner Darrell Gates.

The state had planned to borrow at least $100 million in any case from the federal government, but finishing in the black on New Year’s Eve is more than just a symbolic cause for celebration. If the state is forced to borrow before the end of the year, it has to pay interest on that loan, and pay it back a year earlier. And that, combined with some actions – or inactions – on the part of the federal government might force another tax increase.

It would appear the Governor and the Democratic majority in Concord need to start cleaning up their mess.

Democrats Preparing Second Stimulus...

2009-10-09T07:58:00.002-04:00

...they just aren't calling it that.

USA Today reports this morning:

Confronted with big job losses and no sign the U.S. economy is ready to stand on its own, Democrats are working on a growing list of relief efforts, leaving for later how to pay for them, or whether even to bother.

Proposals include extending and perhaps expanding a popular tax credit for first-time home buyers, and creating a new credit for companies that add jobs. Taken together, the proposals look a lot like another economic stimulus package, though congressional leaders don't want to call it that.

Democratic leaders in Congress and the White House say they have no appetite for another big spending package that adds to the federal budget deficit, which hit a record $1.4 trillion for the budget year that ended last week.

But with unemployment reaching nearly 10%, many lawmakers are feeling pressure to act. Some of the proposals come from the Republicans' playbook and focus on tax cuts, even though they, too, would swell the deficit.

Interestingly, many of the proposals currently under consideration are those that could have effectively been included in the original stimulus prior to Congress and the Administration selling out to political cronies and special interests.

Reaction to CBO Health Care Score

2009-10-08T14:20:00.001-04:00

The Congressional Budget Office recently released the newest cost estimate for the health care reform bill moving through Sen. Max Baucus’ Finance Committee. The estimated 10-year cost of $829 billion is lower than previous estimates, but that has yet to convince two of New Hampshire’s most high profile politicians.

Senator Gregg released the following statement:

The cost estimate from CBO shows that the Democratic proposal on health care that came out of the Finance Committee -- and is considered the most reasonable of the Democratic proposals -- will increase the size of the government by almost a trillion dollars.

This huge increase in government spending is allegedly paid for by cutting Medicare by approximately $500 billion dollars and raising taxes. On top of that, the cost of premiums paid for by all Americans with private insurance will increase significantly. This is extraordinarily expensive and means that resources that should be used to shore up a soon-to-be insolvent Medicare system for seniors is being diverted to create a massive new entitlement, while pushing the country down the road toward a Washington Beltway-controlled system with millions losing their private insurance.

Considering that 25 million individuals will remain uninsured under this proposal, it does not solve our health care issues but does concentrate more power in Washington over every American’s health care and how it is delivered, while radically growing the size of the federal government.

Governor Lynch made more news by what he did not do; James Pindell reports:

Gov. John Lynch is one of six Democratic governors refusing to sign a letter urging their Washington colleagues to pass meaningful health care legislation this year.

The letter, drafted and circulated by the Democratic Governors Association, avoided controversial issues like the public option and was meant to show unity and apply pressure to Democratic lawmakers in Washington.

Of the 28 Democratic governors, 22 signed the letter. Lynch did not along with Missouri's Jay Nixon, North Carolina's Bev Purdue, Arkansas's Mike Beebe, Wyoming's Dave Freudenthal, and Oklahoma's Brad Henry.

The news was first reported by the website Talking Points Memo.

Lynch spokesman Colin Manning said Lynch is concerned about costs to states under some of the proposed plans. When asked by NHPoliticalReport.com whether Lynch supported the public option Manning simply replied, "Governor Lynch believes in the goals of health care reform and applauds the President and Congress for making reform a priority. But the Governor is concerned about cost shifting to the states, and that is a concerned shared by other governors."

It is a thorny issue for Lynch. His Democratic base passionately wants health care reform and favors the public option. Yet Lynch has branded himself as a fiscal conservative and the potential for new health care costs to shift to states is very real.

Chowdaah!

2009-10-07T19:36:00.006-04:00

Come join STEWARD of Prosperity for our "Stop the Spending" Chowderfest on Saturday the 17th in Portsmouth.

As we move closer to Election Day 2010, it’s critical for Republicans to continue building
enthusiasm and momentum. There’s no better way to do so than by rallying for fiscal conservatism – and enjoying some great chowder!

STEWARD’s “Stop the Spending Chowderfest” will provide a golden opportunity for fiscal conservatives to gather in opposition to the reckless spendathon at the Statehouse and in Washington. We’ll have several special guest speakers that day, including Kelly Ayotte, Jim Bender and Sean Mahoney – Republicans who are all looking at the race for U.S. Senate next year.

Here are all the important details, we look forward to seeing you next weekend!

WHAT: STEWARD of Prosperity’s “Stop the Spending Chowderfest”

WHO: New Hampshire Fiscal Conservatives

WHERE: Redhook Brewery, 35 Corporate Drive, Portsmouth, NH

WHEN: Saturday, October 17, 2009, from 1 to 3 p.m., rain or shine

ADMISSION: Free

RSVP: Required - cick here, or call STEWARD at 603-415-2601

Wall Street Journal Predicts Midterm Difficulties for Congressional Dems

2009-10-06T16:40:00.001-04:00

As President Obama's stimulus package continues to flounder, Congressional Democrats who bought the program hook, line and sinker as the only way to save jobs and revive the economy will be tied to its success or failure come the mid term elections, reports the Wall Street Journal:

Congressional Democrats and the Obama White House have plenty to fret about as they eye the 2010 elections: rising deficits, the Afghan war, public fears over expanding government, the fate of the health-care brawl.

But one item may prove key: the national unemployment rate, which hit a 26-year high last month at 9.8%. On that front, economists and political pundits say, the majority party looks increasingly wobbly.

The incumbent Democrats are facing an uphill climb in the 2010 elections. With the jobless rate nearing 10%, President Obama could lose more than 20 seats in the House. WSJ's Neil King explains.

"Unemployment is the leading economic indicator when it comes to politics," said Democratic pollster Peter Hart. "Anytime unemployment hits double digits, it's hard to see the party in control having a good election year."

Economists generally predict that the number of people out of work will continue to inch up next year, even if the economy begins to rebound. Most see the jobless rate peaking at around 10.5% in the summer. Former Fed Chairman Alan Greenspan said Sunday that his own hunch was that the economy would turn around over coming months, but that unemployment would "penetrate the 10% barrier and stay there for a while before we start down." ...
President Barack Obama and the Democrats are all the more exposed on the jobs front because they touted the $787 billion economic-stimulus bill as a way to curb job losses. The Obama team asserted in January that the recovery plan would keep unemployment below 8% and push it down to nearly 7% by the end of 2010. Obama aides have since said that they didn't grasp how sour the economy was at the time.

Economists now generally believe that the stimulus package has cushioned the economic fall. But Republicans argue that it was a waste of money, and it isn't clear whether the Democratic argument -- that things would be worse without the stimulus -- will sway many voters.

The Minimum Wage and Teen Unemployment

2009-10-05T16:07:00.001-04:00

We remarked last week on the record high unemployment levels among the nation's teenagers and young workers. Today's Wall Street Journal examines the impact the mandatory increase in the minimum wage, as pushed by Congressional Democrats in 2007, has had on the problem:

The September teen unemployment rate hit 25.9%, the highest rate since World War II and up from 23.8% in July. Some 330,000 teen jobs have vanished in two months. Hardest hit of all: black male teens, whose unemployment rate shot up to a catastrophic 50.4%. It was merely a terrible 39.2% in July.

The biggest explanation is of course the bad economy. But it's precisely when the economy is down and businesses are slashing costs that raising the minimum wage is so destructive to job creation. Congress began raising the minimum wage from $5.15 an hour in July 2007, and there are now 691,000 fewer teens working.

As the minimum wage has risen, the gap between the overall unemployment rate and the teen rate has widened, as it did again last month. The current Congress has spent billions of dollars—including $1.5 billion in the stimulus bill—on summer youth employment programs and job training. Yet the jobless numbers suggest that the minimum wage destroyed far more jobs than the government programs helped to create.

Congress and the Obama Administration simply ignore the economic consensus that has long linked higher minimum wages with higher unemployment. Two years ago Mr. Neumark and William Wascher, a Federal Reserve economist, reviewed more than 100 academic studies on the impact of the minimum wage. They found "overwhelming" evidence that the least skilled and the young suffer a loss of employment when the minimum wage is increased. Whatever happened to President Obama's pledge to follow the science? Democrats prefer to cite a few outlier studies known to be methodologically flawed.

(Thanks for Don Surber for the graphic)

UNH Prof, Other Experts, Reinforce What We Already Knew...

2009-10-05T13:29:00.000-04:00

The recovery is not yet underway.

Fosters Daily Democrat reported yesterday:

Economic experts and business leaders say there are few signs that any kind of recovery from one of the worst recessions in U.S. history will occur anytime soon.

And when New Hampshire's recovery does finally start, it will be a slow process, they add.

"I think we're going to crawl out of the hole, not jump out of it," said Russ Thibeault, president of Applied Economic Research in Laconia. "The impact of this recession has been very, very broad."

New Hampshire's unemployment rate is 6.8 percent, 3 points higher than in July 2008, according to the state Economic Labor Market Information Bureau. The bureau reports that 18,900 people have been out of work since December 2007.

Meanwhile, Maine's unemployment rate is 8.4 percent, New England's second highest behind Massachusetts' 8.8 percent rate.

According to the New Hampshire bureau, the state has 755,100 workers in the civilian workforce, and nearly 50,000 of them were unemployed as of July.

The bureau reported that 15,600 jobs were shed in the past year. Manufacturing lost 7,400 jobs, construction lost 4,700, retail trade lost 900 and leisure and hospitality lost 1,500. Only education and health care gained, with 900 more employed people in 2009, the bureau reported. ...

Ross Gittell, a professor at the Whittemore School of Business and Economics at the University of New Hampshire, said he doesn't see anything that suggests the recession will end soon.

"There are not many strong signs of recovery," he wrote in an e-mail to the newspaper.

The Veep Backtracks, Sort Of...

2009-10-02T15:24:00.000-04:00

After Joe Biden’s widely reported endorsement of the stimulus’ success late last week, one would assume the Administration was expecting some good news from today’s employment numbers.

Unfortunately for 263,000 Americans, and now 9.8% of the workforce, that was not the case. The AP reports:

If the recession really is ending, someone forgot to tell the nation's employers. A net total of 263,000 jobs vanished from the economy last month — much worse than economists' expectation of 180,000 job losses.

The Labor Department figures set the stage for a scenario that labor analysts expect: that joblessness will continue to rise for several months or more after the economy starts to rebound.
The unemployment rate stands at 9.8 percent, a 26-year high. The rate would have been higher if 571,000 people hadn't dropped out of the labor force, which many did in frustration over failing to find jobs.

That leaves 15.1 million Americans out of work, a huge pool of people. Many discouraged workers are likely to re-enter the labor market and compete for jobs that will eventually be created.

And VP Biden’s response, as reported by Fox News:

Vice President Joe Biden, speaking glumly from the White House from note cards, could barely hide his disappointment at today's unemployment report showing 263,000 jobs lost in September and a jobless rate rising to 9.8 percent.

"We knew all along the recovery was going to take a long time," said Biden, sitting in the Roosevelt room with top economic advisers Christina Romer, Larry Summers and budget director Peter Orszag. "We inherited an awful lot of baggage and we knew the recovery would come in fits and starts and job creation would be the last element to come into place. Those are the realities we live with."

Biden said quarterly job loses have fallen from an average of 700,000 in the 1st quarter to 250,000 in the third quarter.

"But less bad is not our measure of success," Biden said. "One job loss is one job to many. There's still too much pain."

Biden said the stimulus has, "by some estimates, saved or created 1 million jobs."

In fact, the economy has lost 2.7 million jobs since the stimulus passed. Moreover, this number doesn’t accurately account for the folks who have given up the job hunt and are thus no longer counted in the typical measure of the unemployed - meaning even more people are out of work than these already dismal numbers represent.

The Administration has yet to explain this four million job disparity.

And now, the newest version of the chart the must haunt the Administration at the start of each month:

Who Pays?

2009-10-01T15:43:00.002-04:00

CNN reports that in 2009, 47% of Americans, or roughly 71 million people, won’t pay a dime in federal income taxes. In fact, some of these folks will actually be owed money by the government because of various social safety net programs.

At first glance, this might seem like welcome news. Maybe the summer tea parties really had an effect.

Unfortunately, however, all it really means is a smaller and smaller pool of taxpayers are responsible for financing the growing largess of the federal government.

And although every American aged 18 and older has the right to vote for our representatives in Washington, it turns out that only about 50% of them will actually pay for effects of those votes.

And the result, as a number of folks have pointed out, is this:

It is much easier to be complacent to massive increases in government spending, and vote for those who support it, if the dollars aren’t coming out of your pocket.

House Democrats Voting to NOT Read the Bills

2009-09-30T21:47:00.002-04:00

Despite polls saying that over 80% of voters would like Congress to post legislation for review prior to votes, Senate Democrats earlier this week voted to do the exact opposite.

In fact, Democrats on the Senate Finance Committee (the Committee currently most responsible for shaping health care reform legislation) voted to continue advancing legislation to the Senate floor that is neither in its final form (as in even they haven’t read the bill) nor been scored by the Congressional Budget Office (no one knows what it will really cost).

You see, at least according to Democrats on the Finance Committee, ordinary Americans would think the legislation too complex and showing it to them ahead of time would only confuse us all.

As such, Finance Democrats claim “tradition” to keep the text of this massive policy overhaul away form the American public for as long as possible.

The Heritage Foundation has an informative post on the whole situation and the vote here. This is their conclusion:

Right now, the media that is covering every twist and turn of the committee’s “mark up” has ignored this quaint Senate tradition and what it means. Weren’t we taught after all, in our high school civics classes that lawmakers work on laws, not vague concepts? And where is all the analysis of the implications of this tradition on the calls for transparency? And what of the growing demands from citizens that lawmakers read the bill before voting for it? What if there is no bill to read?

The Journal Takes a Fresh Swipe at the Stimulus

2009-09-30T15:10:00.000-04:00

In a paper being prepared for the National Bureau of Economic Research, two Harvard affiliated scholars, one a professor the other a recent grad, tested the theory that stimulus spending boosts economic growth "exponentially." In other words, for every dollar of government spending (or in this case increased debt) do we actually reap a dollar or more of benefit?

As can be expected, the WSJ adaptation isn't an excessively easy read however, the eventual conclusion punches a few more holes in the rescue scenario being pushed by the Obama Administration:

The bottom line is this: The available empirical evidence does not support the idea that spending multipliers typically exceed one, and thus spending stimulus programs will likely raise GDP by less than the increase in government spending. Defense-spending multipliers exceeding one likely apply only at very high unemployment rates, and nondefense multipliers are probably smaller. However, there is empirical support for the proposition that tax rate reductions will increase real GDP.

Cash for Clunkers: Part Duex

2009-09-29T17:00:00.002-04:00

Cash for Clunkers is back, though this time the wildly successful program will be focused on household appliances. From today's Eagle Tribune:

Now that you've traded in your 1989 junker, it's time to trade in the old refrigerator for a new, energy-efficient model.

The Department of Energy has made about $7 million available for New Hampshire and Massachusetts residents to purchase new, energy-efficient appliances in a program that will operate similar to the Cash for Clunkers program for automobiles.

Almost $300 million will be available nationwide, with $1.2 million allocated for New Hampshire and $6 million for Massachusetts.

But states are still working out the details of the program, which will operate differently in each state. Final applications aren't due to the federal energy department until Oct. 15.

Lisa Capone, spokeswoman for the Massachusetts Office of Energy and Environmental Affairs, said after the application is filed, the federal government still has to approve each state's plan.

Unsurprisingly, retailers aren't sold on this new government gimmick:

Rick Dube, president of Dick's TV and Appliance in Methuen, said he just hopes this program operates smoother than the first Cash for Clunkers.

"I hope they do better with appliances than the cars," Dube said. Until he hears what appliances will be covered under the program, Dube said, he's not making any guesses as to how it will affect his business.

Jamie Paquet, a sales consultant with Baron's Major Brands Appliances, with stores in Plaistow and Salem, said their store is also waiting for more information from the state before they get excited.

"It's a very cloudy picture," Paquet said.

Even with a lot of unanswered questions, Paquet said he's not convinced this program will be as beneficial to the customer.

More Unemployed Seeking Fewer Jobs

2009-09-28T17:26:00.001-04:00

Despite claims by the main stream media and the stimulus czar himself, VP Joe Biden, that the economy is getting better, signs continue to point to a sustained downturn not at all allevaited by the stimulus package.

The New York Times reports today:

Job seekers now outnumber openings six to one, the worst ratio since the government began tracking open positions in 2000. According to the Labor Department’s latest numbers, from July, only 2.4 million full-time permanent jobs were open, with 14.5 million people officially unemployed. ...

During the last recession, in 2001, the number of jobless people reached little more than double the number of full-time job openings, according to the Labor Department data. By the beginning of this year, job seekers outnumbered jobs four-to-one, with the ratio growing ever more lopsided in recent months.

As you can see from this NYT chart, the gap has only grown since early 2009 when the stimulus was enacted.

Stimulus "Success" Impresses Biden, Rest of America? Not so much.

2009-09-25T16:43:00.003-04:00

Vice-President Biden recently told a collection of the nation's governors that in his "wildest dreams" he never though the stimulus would work as well as it has.

Unsure what Biden offered as evidence for this resounding success, but in typical fashion he talked enough to avoid having to answer many questions regarding the subject. "The session lasted 45 minutes," reports the Wall Street Journal, "but there was time for only four questions from governors."

Despite Biden's review, the American people remain unconvinced. In a recent CBS poll, less than 40% of respondents believe the $800 pork package has impacted the economy in any meaningful way.

Stimulus Bloats the Federal Government

2009-09-24T18:29:00.001-04:00

USA Today is reporting:

The $787 billion economic recovery package also is stimulating growth in the federal government as agencies hire thousands of workers and spend millions of dollars to oversee and implement the package, according to government records and spokesmen.

Fourteen of the top federal agencies responsible for spending under the American Recovery and Reinvestment Act say they've hired about 3,000 workers with stimulus money. That's helped fuel the continued growth of the federal government, which increased by more than 25,000 employees, or 1.3%, since December 2008, according to the latest quarterly report. During that time, the ranks of the nation's unemployed increased by nearly 4 million, Labor Department statistics show.

Overall, there are about 2 million federal workers, the data show.

Thirteen agencies that report stimulus-related administrative expenses separately on their weekly spending reports say they've spent $186.8 million so far on salaries and other overhead. Those agencies have reported spending $46.1 billion in stimulus funds overall.

This helps to explain another stimulus problem that has begun manifesting itself, the bureaucracy responsible for transparency is crushing any hope of it, according to Reuters:

U.S. President Barack Obama's pledge to flood Americans with information about economic stimulus spending could misfire, the independent Congressional auditor said on Wednesday.

The volume of information required for a report due next month may be creating problems with the quality of data, the Government Accountability Office said in a special report.

"This unprecedented level of detailed information to be reported by a large number of recipients into a new centralized reporting system raises possible risk for the quality and reliability of these data," said the report. …

Other problems identified by the GAO include states, which provide a large portion of the data, not being reimbursed by the federal government at a rate that covers the costs of collecting and reporting it.

"These additional costs can exacerbate states' existing fiscal stress," said the report.

Stimlus Fails Nation's Young Workers

2009-09-23T16:37:00.003-04:00

Over the last few months the Associated Press has published a number of stories critical of various aspects of President Obama's stimulus package. Today, they address the lack of teen jobs created by the bill, despite Administration claims:

More than $1.2 billion in federal stimulus money was supposed to help teenagers find jobs this summer, but the effort barely made a dent in one of the bleakest job markets young workers have faced in more than 60 years.

Despite the program's admirable goals, experts and government watchdogs say it yielded few new opportunities for teens seeking work, as more and more adults are vying for the same low-wage positions at hamburger stands and community pools. ...

Now, as congressional investigators scrutinize the program for potential waste, experts are wondering why it couldn't prevent youth unemployment rates from soaring to 18.5 percent in July, the highest rate measured among 16- to 24-year-olds in that month since just after World War II.

"The summer program was basically half-disaster," said Andrew Sum, director of the Center for Labor Market Studies at Northeastern University in Boston. "It was too little, too late and too poorly constructed to have any lasting effect on our youngest workers."

Expanding on those unemployment figures, the New York Times reported at the beginning of the month:

This August, the teenage unemployment rate — that is, the percentage of teenagers who wanted a job who could not find one — was 25.5 percent, its highest level since the government began keeping track of such statistics in 1948. Likewise, the percentage of teenagers over all who were working was at its lowest level in recorded history.

“There are an amazing number of kids out there looking for work,” said Andrew M. Sum, an economics professor at Northeastern University. “And given that unemployment is a lagging indicator, and young people’s unemployment even lags behind the rest of unemployment, we’re going to see a lot of kids of out work for a long, long, long, long time.”

Continued Budget Concerns in Concord

2009-09-22T14:01:00.002-04:00

The Portsmouth Herald reports:

Over the first two months of the fiscal year, the state reported revenue for the General and Education Funds at $187.5 million, which was $17.6 million below the revenue plan passed by lawmakers in June and $5.5 million below 2009 collections for the same period. The rooms and meals tax, which was raised by lawmakers, came in $3.7 million below estimates. The state's two business taxes came in $2 million below estimates while tobacco taxes also came in $2 million below estimates.

House Speaker Terri Norelli assured readers, however, "July and August normally don't provide us solid indicators. I think we will have a better idea of how things are going in this highly volatile economic environment with the September numbers."

Of course, just a few weeks ago in response to poor July revenues, Norelli told us not to worry as August would be better. If not? The she would be "concerned" she said.

Maybe "assured" wasn't the right word.

Meanwhile, talks have broken down with the state's union leadership as Governor Lynch attempts to squeeze out $25 million in mandated cuts needed to balance the budget. The eventual contract will cover over 10,000 state workers and must be finalized by October 12.

On top of that, as the Herald reminds us, there is still the pending matter of the $110 million JUA lawsuit. The JUA of course won the first few rounds of the fight and the matter awaits action by the State Supreme Court (most expect the court will concur with the JUA and subsequently carve a huge hole in the state budget).

"Doing nothing, which appears to be the case right now, is a very dangerous and irresponsible decision," said Senate Minority Leader Peter Bragdon of Milford. "With revenues down 15 percent from their rosy estimates and an adverse ruling from the Supreme Court, a lack of a Plan B could only mean hasty decisions will be made. Hasty decisions are what put us in this mess; more hasty decisions will only further burden our citizens."

Some Stimulus Spending Details

2009-09-21T12:06:00.002-04:00

Today's Concord Monitor offers some details on the distribution and use of almost $21 million in federal stimulus funds.

The funding will impact a litany of state and private entities throughout the Granite State, though the focus of much of the Monitor's piece was on Concord specific awards. Here are some of the details:

"The [Concord] police department received $207,000 to hire a new officer for three years - the city had to agree to pay for the position for one year after that[.]"
"[T]he department was awarded more than $180,000 ... about $125,000 of which has been used to retain two officers, ... the rest to buy two police cruisers later this year."
"[T]he Belknap-Merrimack Community Action Program has [received] ... more than $3.6 million for weatherization projects."
"The [Concord school] district will get nearly $1.3 million more this year in money for disadvantaged students."
"[T]he state's community colleges have been awarded money mostly for financial aid. ... NHTI in Concord will get more than $825,000 in awards related to federal Pell grants [and] $17,000 toward a federal work-study program."

What do you think? Good uses of taxpayer cash or simply redistribution minus the federal government's cut?