Sarah Palin, same old words, two different styles on the same day

Sarah Palin did three interviews yesterday.

Between 9 and 11 am (Alaska time) she talked to Megyn Kelly on America Live, where she bashed feminists in general and Gloria Steinem in particular:

America Live, with Megyn Kelly

Then she changed into a more fetching outfit (???) to appear on Lou Dobbs Tonight (around 3 pm in Alaska), to talk about the economy:

Lou Dobbs Tonight

I think she got tired of sitting in front of the fireplace and moved to the window for the Greta show (5 to 7 pm Alaska time), where she indulged in her favourite activity. Yes, bashing President Obama:

On the Record with Greta Van Susteren

She more or less said how dare Obama go on a ten-day vacation, in Martha Vineyard of all places, yadda yadda (too elitist).

That's rich, coming from a woman who's been on a very well paid vacation for over two years!

I don't understand why, having been fairly well dressed in the morning, with a grown-up hairstyle, she then decided to change into a last frontier jacket, bad hair and completed the look with a big crucifix for the later interviews.

The inanity and vitriol of her words are consistent, but her choice of clothes, hair and accessories is very weird.

Remember this one?

[In the process of watching the videos frame-by-frame I noticed that she was doing the tongue thing very quickly, as if she had remembered NOT to do it and then checking herself. Maybe she caught my tongue videos on youtube and decided not to give me further opportunities to expand my collection of tongue shots? I'm sure she'll indulge again when she goes on Hannity, that's when she can't control the thing... Ha ha!]

Sarah Palin - the economist strikes again - UPDATE

Sarah Palin solves the problems of the economy:



Good solution, Sarah. It would mean a few extra trillion dollars in loss revenue. I would love to see you balance the books!

UPDATE

Warren Buffet (mega-rich) wrote an op-ed for the New York Times. Here are some excerpts:

OUR leaders have asked for “shared sacrifice.” But when they did the asking, they spared me. I checked with my mega-rich friends to learn what pain they were expecting. They, too, were left untouched.

While the poor and middle class fight for us in Afghanistan, and while most Americans struggle to make ends meet, we mega-rich continue to get our extraordinary tax breaks.

Back in the 1980s and 1990s, tax rates for the rich were far higher, and my percentage rate was in the middle of the pack. According to a theory I sometimes hear, I should have thrown a fit and refused to invest because of the elevated tax rates on capital gains and dividends.

I didn’t refuse, nor did others. I have worked with investors for 60 years and I have yet to see anyone — not even when capital gains rates were 39.9 percent in 1976-77 — shy away from a sensible investment because of the tax rate on the potential gain. People invest to make money, and potential taxes have never scared them off. And to those who argue that higher rates hurt job creation, I would note that a net of nearly 40 million jobs were added between 1980 and 2000. You know what’s happened since then: lower tax rates and far lower job creation.

My friends and I have been coddled long enough by a billionaire-friendly Congress. It’s time for our government to get serious about shared sacrifice.


Please read the rest of the op-ed, it's quite good.

[H/T to Emily Peacock]

Dishonesty medals for GOP, teabaggers and Sarah Palin

The GOP and the teabaggers created a scenario where President Obama takes the blame for the credit rating downgrade (and anything else that looks bad). He has been accused of overspending, among other things.

Let's take a trip down memory lane:

2009 (MSNBC)

The $3 trillion Bush's proposes spending in 2009 would be the first time that milestone has been reached. Bush also presided over the first budget to hit $2 trillion, in 2002. It took the government nearly 200 years to reach the first $1 trillion budget, which occurred in 1987 during the Reagan administration.


2009 (LA Times)

President Bush on Monday submitted a $3.1-trillion budget for the next fiscal year that reflected his strategy for dealing with a costly war and a troubled economy: substantially boost military expenditures, rein in domestic spending -- including for Medicare -- and more than double the deficit.


The proposal calls for making permanent Bush's 2001 and 2003 tax cuts, which have been widely criticized as skewed to the rich and which would begin expiring next year. Doing so would cost Washington more than a half-trillion dollars in forgone revenue over the next five years and more than $2 trillion over the next decade, but the president has argued that they play an important role in stimulating economic growth.

This video was posted yesterday, but it should be seen again, in the context of this post:



The first 5 years

Federal spending under the Bush administration has grown five times larger than that during the second term of the Clinton administration, charges a conservative Republican activist in a new book that paints the president as a traitor to his party.

In "Conservatives Betrayed," Richard Viguerie, credited with being one of the architects of the Reagan Revolution, says George W. Bush has set the stage for the punishment of his party by voters.

Viguerie compares spending by the federal government, adjusted for inflation, during the Clinton years vs. the Bush years. In Clinton's first term, federal expenditures rose 4.7 percent. In his second term, they rose 3.7 percent. In the first term of the Bush administration, however, spending rose 19.2 percent.

"During President Bush's first five years in office, the federal government increased by $616 billion," Viguerie writes. "That's a mammoth 33 percent jump in the size of the federal government in just his first five years! To put this in perspective, this increase of $616 billion is more than the entire federal budget in Jimmy Carter's last years in office. And conservatives were complaining about Big Government back then!


President Obama signed a stimulus package of $800 billion to counter the recession he inherited, preventing further job losses and to encourage the creation of new ones.

Obama was forced to increase the budget because of Bush's war expenditure, his largesse when it came to the rich and the mess that was passed down to him.

How is any president expected to keep recession at bay without spending or to balance the books when revenue haemorrhages through tax cuts for the wealthy? If these tax cuts were so important for stimulating economic growth, how come job creation under Bush looks so appalling?

President Obama managed to create more jobs than Bush, even in a recession. He's also having to fight the obstacles the GOP places ahead of him every step of the way.

The GOP, now aided by the teabaggers, is very good at shirking responsibility and misplacing blame. Bush was bad enough, but these clowns in Congress should win a medal for their dishonesty.

A special medal should go to "It's the spending, stupid!" Sarah Palin.

Immoral Minority has an excellent post, with further comparisons and information about the economy under Bush and other administrations.

Raising Sarah Palin's ignorance ceiling

This nincompoop doesn't want the debt ceiling raised. (The video only lasts seven seconds, to spare your ears and prevent brain freeze.)

[If raising Sarah Palin's ignorance ceiling had to be voted by Congress each time she opens her mouth, they wouldn't find time for anything else!]


Republican presidents had the debt ceiling raised several times, including her hero, Ronald Reagan...

Bush

During Bush Presidency, current GOP leaders voted to increase debt limit by $4 trillion, without tying it to spending cuts.

... in May of 2003, the GOP was not only willing to raise the debt ceiling in the absence of debt reduction measures, but it did so on the same evening that it blew a brand new hole in the federal budget by approving a giant tax cut for the wealthy:

Without comment or ceremony, President Bush on Tuesday signed a bill allowing a record $984 billion increase in the amount the federal government can borrow, to a record $7.4 trillion. The increased federal borrowing will enable the government to pay for the $350 billion economic stimulus package that the GOP-led Congress passed last week at Mr. Bush’s behest.

That “stimulus package” was the 2003 Bush tax cut.

As the Center on Budget and Policy Priorities pointed out, the Bush tax cuts will add $3.4 trillion in deficits by 2019, as well as an additional $1.7 trillion in interest on the federal debt.

Reagan

There were 18 increases in the debt limit when Ronald Reagan was president. The icon of tax-cut Republicans, Reagan argued the case for debt ceiling increases in terms cited by the Obama administration throughout the 2011 dispute.

"The full consequences of a default — or even the serious prospect of default — by the United States are impossible to predict and awesome to contemplate," he said in a 1983 letter urging the Senate to get the limit increased.

Seeking another increase in the fall of 1987, Reagan honed in on the habits of Congress.

"Unfortunately, Congress consistently brings the government to the edge of default before facing its responsibility," Reagan said. "This brinksmanship threatens the holders of government bonds and those who rely on Social Security and veterans benefits. Interest markets would skyrocket, instability would occur in financial markets, the federal deficit would soar."

With Sarah Palin's Tea Party thrown into the mix, brinkmanship has moved to a whole new level. As a consequence, the global markets are being hit and the effects of the idiocy of the teabaggers felt beyond US borders. There's something very wrong with this picture.

Perhaps instead of offering compromises, President Obama should use the 14th amendment, raise the debt ceiling and tell the teabaggers where to shove their brinkmanship once and for all.

Ugly, toxic Sarah Palin

I'm having a serious bout of Palin fatigue. I feel uninspired, with a knot in my stomach at the mere mention of her name.

It's a sad state of affairs when a person who can't string a couple of sentences together, misuses and invents words, gets her facts wrong, makes a ridiculous reality show and prostitutes her family for fame and money becomes a loud and influential voice in American politics.

How could this woman, who gave us the classic Charlie Gibson and Katie Couric episodes be taken seriously? How could a woman so easily pranked by a couple of comedians (who compared her to Britney Spears) have her every burp and fart reported by the media as if they had any relevance?

Sarah Palin herself is a myth. Somebody banked on her sex appeal to get their warped message out. She's being paid handsomely by her puppet masters to poison American politics and she's doing a very good job.

The media can't have enough of her, even though she avoids them like the plague. This elaborate cat-and-mouse game led the media to follow her One Nation bus tour like dogs chasing a bitch in heat.

Sarah Palin derailed the healthcare debate with her death panels, brought out the ugly with her crosshairs and now she has posted veiled threats to the teabaggers in Congress, urging them to sabotage any attempt to solve the debt ceiling crisis.

Her poisonous voice is given a lot of undeserved weight by the media she so despises.

Perhaps we're all to blame for keeping this toxic flame alive. I wish I could stop writing about Sarah Palin. The bloggers find themselves in a kind of catch-22: Article upon article appear in the media without any fact checking, so it falls to the bloggers to set the record straight. We have to keep writing about her. It's a vicious circle.

And the political landscape in America continues to get uglier by the minute...

Sarah Palin is on a roll

Judge Judy said it before: "Beauty Fades, Dumb Is Forever."



There's another dose of stupid from another show...



A British minister had a nice expression to describe the likes of Sarah Palin:

Vince Cable, the business secretary for the UK government, says "Rightwing Nutters" in the US pose a a bigger threat to the global economy than the eurozone crisis.


We have known for a long time that Sarah Palin is a dumb rightwing nutter...

Good for Palin, bad for Obama?

How come Sarah Palin proudly took on the largest corporations in the state of Alaska, taxing them in a way she thought was fair, raising billions of dollars in revenue for her state, but President Obama can't do the same for the country?

The Alaska Legislature adopted a plan proposed by Palin in 2007 (Alaska’s Clear and Equitable Share) that raised the tax that oil companies have to pay on their profits from a base rate of 22.5 percent to 25 percent. Oil companies, including ExxonMobil, opposed the tax hike, claiming it would affect their project investments. The revenue generated from the tax increase, which significantly added to the state’s budget surplus, allowed Palin’s administration to issue a one time "resource rebate" of $1,200 to eligible state residents in 2008 to help with increasing energy prices. The rebate came in addition to the annual dividend check ($2,069 in 2008) that residents receive as their part of the state’s oil wealth.

The state of Alaska wasn't going through a major financial crisis, and yet she counts ACES as one of her achievements as governor.

Now she's writing Facebook notes encouraging the GOP in Congress to thwart Obama's plans for solving the debt crisis through his proposal of a tax hike for the corporations, something similar to what she implemented in Alaska, but not to butter up the electorate, all he wants is to save the economy and prevent defaulting on the debt.

Visit msnbc.com for breaking news, world news, and news about the economy

Obama is not planning to send every American a $1,200 check, he just wants to balance the books and preserve vital services for the needy. Sarah Palin wishes to protect the profits of the least needy.

What was clear and equitable for Alaskans is not clear and equitable for her precious real Americans?

Sarah Palin, the economist

If I'm not completely mistaken, Sarah Palin's last appearance on Fox News was in mid June. She spoke to Judge Napolitano about her e-mails and said Rep Anthony Weiner was rendered impotent by the Twitter scandal, among the usual soundbites.

After that, she interrupted jury duty (hmmm...) to attend the premiere of The Undefeated in Pella, Iowa, and to sign books with Bristol in Minnesota.

Her ghostwriter has been busy on Facebook: "The Sugar Daddy Has Run Out of Sugar; Now We Need New Leaders," writing about the national debt, usual soundbites included:

"But let me tell you where real hope lies. It’s not the hopey-changey stuff we heard about in 2008. Real hope comes from realizing how God has blessed our exceptional nation, and then doing something about it. We have been blessed with natural resources, hardworking entrepreneurs, and a Constitution that preserves the greatest form of government ever devised by man. If we develop those natural resources, allow our entrepreneurs to keep and invest more of what they earn, and adhere to the time-tested truths of our Constitution, we will prosper and endure."

Of course, some things are back to front:

"The same “experts” who got us into this mess are now telling us that the only way out of our debt crisis is to “increase revenue,” but not by creating more jobs and therefore a larger tax base; no, they want to “increase revenue” by raising taxes on job creators who are taxed enough already!"

The big corporations pay very little tax, due to many loopholes and tax shelters. They shell out a lower percentage than individual taxpayers. Some paid no taxes at all. Her wonderful entrepreneurs had these tax breaks for many years, so where are the jobs? They may keep and invest more of what they earn on themselves, but they're not creating jobs.

Sarah Palin also blows her own trumpet as governor: "As a governor, I had to deal with facts, even unpleasant ones. I dealt with the world as it is, not as I wished it to be."

Democrats are pushing to collect more revenues by ending tax breaks for oil companies, hedge fund managers and corporate jet owners.

Didn't Sarah Palin raise taxes for the oil industry in Alaska to unprecedented levels?

If she took on the oil giants as governor, why can't President Obama do the same?

This fallacy about job "creators" is wearing thin. The big corporations want to take but don't want to give. In this global economy, they find dispositives that allow them to post some losses elsewhere and get tax credits in the US and to transfer profits to lower taxes countries. They have created jobs... but not for Americans. Many thousands of jobs have disappeared in the US and reappeared abroad, where labour costs are much lower. Yes, outsourcing jobs abroad: Larger profits, more money in their pockets.

The quitter governor, with a "D" in macroeconomics, wants to lecture the president on how to lower the national debt. That should work a treat.

Her own sugar daddy has run into some trouble. It may be time for her to sit down and shut up...

***

Commenter NSG posted a video and I've embeded it here. Bill Maher explains the whole thing about the "jobs creators."




Some interesting articles:

Problem? Blame it on Obama

The Paradox of Corporate Taxes

Corporate giants find ample shelter

Contrary To GOP Claims, U.S. Has Second Lowest Corporate Taxes In The Developed World (H/T to Lani)

Can you read a simple graph, Sarah Palin?

Sarah Palin likes to attack President Obama on his handling of the economy and the public debt:



Let's look at that graph again:


(Please click on the image to enlarge)

I hope this is not too difficult for Sarah to understand...

[H/T to Grasshopper for the graph]

Sarah Palin Strikes Again - VIDEO

Sarah Palin went on Judge Jeanine Pirro's show last night and spouted her usual tried and tested common sense catchphrases: "The left wants to make us sit down and shut up," "We have to draw a line in the sand," and a few others...

She was particularly aggressive when talking about the president, accusing him of using the troops as political pawns.

Other highlights:

Rep Ryan's proposals are a good start but don't go far enough.


Social Security is a Ponzi scheme and entitlement programs like Medicaid and Medicare can and should be on the table when considering budget cuts.


Iraq and other countries that counted on any assistance from the US should compensate the US if they have the resources. In the case of Iraq, their oil.

President Obama is insulting Americans by shoving stuff down their throats.


Republicans and the Tea Party have to be more aggressive.

Sarah Palin talking about the president's birth certificate

The best bit was about president Obama's birth certificate. She thinks it's wonderful that Donald Trump is using his resources to get to the bottom of it because there are so many people interested in this. Sarah Palin believes that Obama was born in Hawaii because there was a birth announcement in a newspaper, but thinks he's hiding something because he spent 2 million dollars to prevent it from being made public. "There must be something in that birth certificate he doesn't want people to see."

Well, well.. there must be something in Trig's birth certificate that Sarah Palin doesn't want the world to see. Is there a Donald Trump out there prepared to spend some money to get to the bottom of it? It would interest the American public just as much as Obama's "secrets."

Trig Palin, official birth date: April 18, 2008.
Seen here hours after arriving 5 weeks prematurely,
weighing 6 lb 2 oz

I have changed the photo of Trig because I had mistakenly used a picture taken at a later date. (H/T to minnesotamud)

Sarah Palin's petulant tweets

"We don't see thing as they are, we see them as we are." ~ Anaïs Nin

President Obama sees things as leader who puts people first:





Sarah Palin sees them as a 12-year-old bully:


Alternet offers a sensible solution to the impasse:

Before any government shutdown–or drastic state and federal budget cuts – we should reverse huge tax cuts for the wealthy and deadbeat corporations.

When you hear politicians lament that “we’re broke,” consider this fact: If corporations and households with $1 million income paid at the same levels they did in 1961, the Treasury would collect an additional $716 billion a year – or $7 trillion over a decade.

Our communities are facing mammoth state and federal budget cuts because Congress has, in large part, failed to sufficiently tax America's millionaires and billionaires or prevent aggressive tax avoidance by multinational companies. The rest of us are paying to pick up the slack in budget cuts and future taxes.

Of course, Sarah Palin doesn't like the idea of taxing the rich. Perish the thought!

If, as Alternet suggests, the rich and the corporations were properly and fairly taxed, there would be plenty of peanuts to help balance the books and Sarah Palin would have to shut up her petulant mouth.

Alaska (and more)

I would like to address some issues about Alaska and dispel some misconceptions that are expressed from time to time.

Alaska has unique conditions that don't compare well to the states in the Lower 48. Several factors come into this, such as the size of the state, the climate and also the size, composition and distribution of the population, etc.

I had a good look at the statistics for employment in Alaska and studied the sources of revenue for the state. Here's a chart showing employment percentages, industry by industry, in Alaska and the rest of the country.

(Please click on the image to enlarge)

The largest employer in Alaska is the government, followed by retail and a combination of service industries, healthcare and social assistance, construction, some manufacturing, forestry & fishing, then oil and mining combined (under "mining").

Here's a map showing the concentration and distribution of jobs by sector in Alaska. Unfortunately, the colours for the farming and service industries don't appear on the map. Either they are too spread out to be pinpointed on a map (services), irrelevant (the farming industry is almost non-existent) or somebody missed them out when designing the map.

In 2000 Native Americans accounted for 15.6% of Alaska's population—the highest percentage of any state. Alaska Natives were estimated in 2000 to number about 98,043, up from 86,000 (16%) in 1996.

Although the Alaska Native population is well distributed around the state, the income and poverty maps below show interesting percentages in Western Alaska (where a big crisis hit in January 2009) compared to the rest of the state.

The size of the Alaska Native population excludes great numbers from most employement sectors and affects the size of the workforce overall, which is important, considering that the total population of Alaska is very small for the size of the state.

Employment alone doesn't reflect the health of the state in financial terms. We have to look at the sources of revenue. Many industries that provide employment are not self-sustaining and don't generate revenue (quite the contrary) and don't generate wealth. The sector which generates most of the self-sustaining wealth - manufacturing - is quite inexpressive in Alaska. The sector generating by far the most revenue is the one dedicated to the exploration and exploitation of some natural resources - oil and other minerals. 87% of Alaska's revenue come from this sector. The remaining 13% come from taxation, federal dollars and other bits and bobs.

As big oil companies contribute so much to the state's revenue, they feel entitled to set the political agenda and Alaskan politicians in general seem only too happy to do their bidding. Prominent Alaskan politicians fight to open up federal lands, as in the case of ANWR, they sue the federal government over the listing of some species as endangered, turn a blind eye to the pollution that devastates the environment, not to mention the many corruption scandals that involved a number of them.

Oil has been very good for the Alaskan economy, but it's a resource which is dwindling and other factors make it an unpopular source of energy these days. When oil becomes a thing of the past, what will happen to Alaska? Perhaps the people who have the power to make decisions should start planning for the future and looking into alternatives. The future has the habit of arriving, you can't stop the clock. Without some planning and some diversification, Alaska's future could be very bleak indeed.

What are the main priorities of the average Alaskan? They're exactly the same as anybody else's anywhere in the world: Food, clothing and shelter for themselves and their families. Once these three priorities are met, people start desiring other things, such as healthcare, education and leisure. The more people satisfy their priorities, the bigger their desire for material things becomes, as does their desire for power.

In a state like Alaska, where job opportunities appear to be limited or largely concentrated in a couple of sectors, it comes as no surprise that Alaskans are sometimes defensive about criticism of the oil industry or are reluctant to challenge and expose the largest employer in the state, the government.

Alaskans are not the culprits in any political or economical mess in their state any more than the citizens of any state are responsible for theirs. They vote and they hope, just like everybody else. I'm sure they would like to find long term solutions for their problems in the same way as the people in other states and countries would like to find for their own. I believe the way to change things is to talk to people and encourage them to go out and vote when the time comes. Apathy doesn't change anything, anywhere.

What role do Sarah Palin and the other politicians play (or played) in the state of the economy and the quality of life of the people of Alaska?

They make laws, formulate policies and approve budgets. Since Alaska became a state there have been several administrations with their own priorities. In the history of Alaska, before and after statehood, there have been major events that influenced many factors. The gold rush brought many people from out of state, as did the discovery of vast reserves of oil. These events changed the composition of the population, their desires and aspirations and also changed the behaviour and priorities of those in power.

Sarah Palin is no more to blame for any of the ills affecting Alaska than any other politician who came before her short stint in the top job. As a matter of fact, her record is inexpressive and mediocre when compared to others. The only difference is that she drew attention to Alaska and outsiders started asking questions about a state that didn't interest them before Sarah Palin, apart from being an interesting destination for adventurous vacations...

Why does any state (or country) raise revenue? Is it to stuff their coffers and say: "Look! We have a lot of money!" I don't think so. The role of government is very complex, but I like to believe that revenue is raised to provide services to the people living in the state and improve the quality of their lives. Defending the people and the assets of the state are important as well. Sarah Palin believes the role of government is to stay out of everything. OK, she makes concessions regarding defense. Is that it? Her record shows that providing services was not one of her priorities. Education? Healthcare? Preserving the environment and wildlife? The welfare and preservation of Alaska Natives and their way of life? No, none of the above.

Sarah Palin's record as governor and her Facebook notes, op-eds, speeches and interviews since going rogue point to a different priority: To carry the water for the big corporations. Spudnut and sputnik were added to her repertoire so she could pretend to be on the side of the little guys (and bash the Soviet Union). Small businesses make a difference to the economy when considered in the context of the economy as a whole, but it's the behaviour of the big guys that makes the most difference in the US. The marriage of the big corporations and the Supreme Court combined with various powerful lobbies for special interests in Washington, DC paint a pretty picture, eh? Sarah Palin plays a minor role in all this, albeit performed in a very loud and penetrating voice.

From Alaska to the US to the world, I tried to look at people's needs and priorities, the role of government and the priorities of the people in power, be it economical or political. I looked at Sarah Palin's role in Alaska and in the more recent big picture. My analysis and opinions are based on the new buzzword Sarah Palin loves so much: Common sense. Without any first hand knowledge of Alaska or any profound expertise in economics or politics, I looked at some facts, studied the records, put two and two together and now I'd like to encourage you to weigh in with your own insights and opinions.

Here are all the links to the sources used in the research involved in preparing this post, listed and clearly identified for ease of reference. Links to older posts on Palingates, other blogs and Palin's Facebook note are dotted around the text.

Demographic and Economic Profile - Alaska

Revenue Sources Book - Alaska Department of Revenue - Tax Division

State Government Employment Data - Alaska - 2009

Alaska Ethnic Groups

Population, Income, Education, Employment, and Federal Funds

Alaska Oil & Gas Association - State Revenue

ADN article - Oil Industry Employment

The News Tribune article - Alaska Unemployment Rate

Sarah Palin's commonsense solutions to mend the economy

By Regina

Sarah Palin is very fond of talking about "time tested truths," "commonsense solutions" and "work ethic." Just as her Founding Fathers are a thing of the past, so are her simplistic views of the economy. I'm not saying the American Constitution is a thing of the past, but the way she talks about it and the people who wrote it are completely out of any historical context and amount to nothing more than a few soundbites.

Palin's views of the economy fall in the same category. The days when hard work meant good rewards are in the past. In the good old days, there was a strong manufacturing industry, not only in America, but in most other western countries. People produced stuff, earned money and consumed stuff. That was straightforward capitalism and it was simple. But the world has changed a lot. We now have a global economy. The pursuit of the mighty dollar and the desire to escape the rules and regulations that exist to protect workers, consumers and the environment, drove the big fat cats to China and India. In these countries, their main commodity is a vast, growing population that will work for next to nothing and won't dare ask for any guarantess or decent working conditions. These poor people fall over each other to work like slaves in factories that are free to pollute as they please. And we in the West give them a pass because they are emerging economies and could do with a bit of help in order to grow. This paternalistic approach has nothing to do with helping emerging economies and everything to do with maximizing profits.


The West outsourced a lot of manufacturing and other jobs because we all want to pay less at the checkout. For a start, that's not necessarily true. Sneakers that cost pennies to produce are still sold as status symbols and don't come cheap. The question is: What are we going to use for money? The same monopoly money the big financial corporations play with? Millions of jobs went to India and China, so how are the consumers going to pay for the cheap goods? There are whole towns in America where chronic unemployment has become the norm. Where are the consumers?

There is a climate of fear among the workforce in the US (and elsewhere in the West). In the US, people are afraid to change jobs because they're afraid of losing their healthcare plans. All over the West, people are being forced to take pay cuts because any job is better than no job at all. What kind of work ethic is that? A big section of the population can't even dream of working hard and reaping the rewards.

During the economic boom of the 80s, people got used to the instant gratification that credit afforded them. Buy now, pay later. That was when monopoly money became the currency and oh, boy, are we paying for it now! The economy looked healthy, people were buying like never before, but all the while, the true strength of the economy was being dismantled and moved abroad.

A couple of years ago, the storm that had been brewing during the Bush years hit with unforgiving violence and Obama was saddled with the task of rebuilding the US economy from the debris. How could a country with so many smart people allow it to happen? Are the finance gurus that stupid? Were the people who sold the jobs abroad a bunch of dummies? Well, yes and no. They made a lot of money for themselves and their shareholders, but due to their lack of foresight, they destroyed the source of their profits. An insecure population without jobs or fearing for their jobs don't make very good consumers. Some may still be living in the past and buying now hoping to pay later, but that is a bubble that has already burst. The vast majority of the population are not shareholders, not many people can hedge their bets. They need real jobs, they do want to work hard. What's this job creation Ms Palin keeps going on about? Is it going to be in the service industry, which is money consuming, not money making? Is it going to be in government like in her Alaska, where great numbers of people work in some oil related job or for the government in some way or another?

There are fewer industries left in the US and the money is (more than ever) concentrated in the hands of the very few. Without a proper manufacturing industry, the backbone of the economy is gone. What are the industries that so far have kept the economy ticking, albeit in a faltering fashion? Big Oil, Big Pharma, Health Insurance and the Media, for example. So people can continue to feed their gas guzzling machines with stuff that's declining, swallowing medicines they can't afford for illnesses everybody is afraid to have while they watch reality shows and news that make them even more afraid of their own shadows? Let's not forget the war industry, which has become the new backbone of the American economy. It's no coincidence that it also thrives in a climate of fear. It's also being bankrolled by China...

When Obama proposed buying $600 billion in bonds in order to boost the economy, Sarah Palin asked if the money was going to come out of thin air. What she doesn't realize is that money has been coming out of thin air for many years. That's the monopoly money I mentioned earlier. In the absence of a strong manufacturing industry and very poor prospects for creating real jobs, that's the only currency any president has at his disposal to address an economic crisis and only puts a band-aid on the deep wounds that are affecting a great number of people. Pouring money into the market is a short term patch-up job. The real solutions are far more complex than that.

I didn't hear Sarah Palin coming forward with any proposals for real long term solutions...

Europe still has some safety mechanisms in place and will survive longer, but not forever. The West, in their hunger for cheap profits, transferred economic power to China and shot themselves in the foot. Now all they have is some cheap, make-believe money and not much power.

My views may be simplistic also, too, as I'm no economist, but I think they go a little bit beyond Ms Palin's outdated soundbites. I may be wrong (I hope so), but I have the impression the fat cats are in panic mode, grabbing what they can while they can because they have realized that they have destroyed the economy and their own golden goose. They'll grab the money and run.

Then they'll blame it on Obama.

+++

Please re-tweet:

http://twitter.com/#!/palingates/status/29274777025777664

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Just the facts, Madam: A German chief banking economist gives his assessment about the US economy in 2010 and an outlook for 2011

In my last post I announced that I was going to publish a post about the US economy. Although not directly related to Sarah Palin, it's undoubtedly an important subject. One of the main reasons, if not the primary reason why Sarah Palin seems to have a chance of winning the Republican nomination is the dire economic situation in the USA. People are looking for a "savior", and why not choose Palin, the woman who doesn't really know anything, but also finds some resonance in her claim that she is apparently not connected to the "Washington elite", the people who supposedly are responsible for the huge economic problems, which are presently affecting many, many people in the USA. So why not choose Palin and "clean up the mess?" I fear that there still is a substantial amount of Republicans who are prepared to follow this simplistic and dangerous logic. The fact that the new GOP chairman Reince Priebus "coincidentally" visited Alaska just after Christmas 2010 also doesn't inspire much confidence.

To say that Sarah Palin is "finished" politically seems premature in my opinion. Sure, the "blood libel" speech might have reinforced the view in many independents, moderates and liberals that Sarah Palin has no business in being a serious contender for the US presidency, but what Palin apparently only cares about at the moment is her base. I get the impression that large parts of her base liked the "blood libel" speech a lot. The theme seems to be "Sarah against everybody else". Sarah against the despised "elites."

Without the economic crisis, Sarah Palin wouldn't even be worth talking about. But that's not the situation that the USA faces right now. The USA currently is probably in the deepest economic crisis since the second world war.

Views on the economy are always highly political. Also, economic developments often take a long, long time, usually several years. It's inevitable that political "blame games" are the result. The current government might not be responsible for mistakes which were made years ago, but it has the huge task of correcting those mistakes quickly in order to improve the economic situation. Therefore, it's difficult to find "unbiased" views, as the state of the economy and politics are so closely connected.

A few days ago, I got my hands on a new study which was published by the chief economist of one of the largest German banks, a bank with about 200 billion dollars in their balance sheets. The study was directed at the so-called institutional clients of the bank, at the investors: Primarily other banks and financial companies and institutions which are going to make decision about very large investments in 2011. The study examines the current economic situation in several countries, including European countries, and also including the USA.

This bank has a very good track record of making correct predictions. However, this is of course still just an opinion, and forecasts can be wrong. The study also included some data, which will be difficult to dispute and which sometimes "speaks for itself." All the data which has been compiled for this assessment comes from public sources, we are not talking about "secret" information. I found it very fascinating to read such an assessment which was written from a purely economic point of view, with no political "distortions", because it's very difficult to find such "honest" opinions.

The picture which is being presented about the state of the US economy is not pretty. As Palingates is a blog for facts, even if they may be uncomfortable, I immediately decided to share it with our readers.

The study is in German language, and a scan of the page can be seen here. There is another additional booklet with more statistical data, and I included all the graphics from this forecast relating to the economic situation in the USA in this post.

Here is the translation of the complete assessment for the current economic situation in the USA - the graphics follow afterwards:

USA: Between unemployment and mountains of debt

The year 2010 was dominated in the USA by a dent in the economic growth, which fostered concerns about an upcoming recession. The beginning of the year saw a promising development within the labor market, but the recovery later began to stutter. However, another economic downturn did not occur. Now, at the end of the year, the danger of a "double-dip" has decreased significantly. The economic indicators and the labor market seems to be stable.

As a whole, however, 2010 was a disappointment - since spring 2010 the US-economy started to grow only within its potential in production. Unemployment currently stagnates at 9 1/2 per cent - a very high level for the USA. This is not only a social and political, but also an economic issue. High unemployment could be the symptom as well as the cause of the rising structural unemployment. Many Americans lost their jobs in sectors (building sector, financial sector) in which there will probably not be a significant rise in jobs in the near future. Wrong or missing qualifications for sectors of high growth prevent a return of individuals to the labor market. In addition, long periods of unemployment devalue existing human capital. The USA will have to fight with these problems for a long time. Even at the end of 2011 the unemployment will probably still be higher than 9 per cent.

The federal state, which acted quickly during the crisis, when the private demand collapsed, will now act as a brake for the economic development. On the one hand, it doesn't look like there will be significant budget cuts in the new year. But in light of the very high deficit and and massively rising debt there is hardly any room for additional impulses from the federal state. The fact that the stimulus package from 2009 expires in 2011 will strain the economy. The US states and cities will probably profit from the cyclical rise of their revenues. But if these revenues will be enough to leave the budget cuts of the previous years behind remains to be seen.

However, the private demand should slowly become more stable, especially because of the slight decrease in unemployment and the positive effects on the income of the households. On average the US economy should grow about 2 per cent in 2011 (2010: 2,7 per cent), and the dent in growth at the end of 2010 will be followed by a recovery during 2011.

The US Federal Reserve will probably not extend their program for government bonds in mid-2011. A slight upturn in prices and a more robust economy will allow the Federal Reserve not to issue another stimulus. But the high level of unemployment will stop her from abandoning the "zero per cent interest policy" in 2012.

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That's the assessment. There is good news and bad news. One of the most important facts seems to me that a huge disaster, a breakdown of the economy could be prevented, due to the actions of the federal government. In addition, the situation seems to be quite stable now. But the bad news is that the high unemployment and the high debt will be problems that the USA will have to deal with for a long time.

Regarding the unemployment, there were very interesting, if not outright shocking statistics which accompanied this forecast.

First, we have an overview about the rate of unemployment from 1980 until today. Headline: "High unemployment - and no quick solution in sight." The graph shows the rate of unemployed people, in per cent of all people who are able to work (the grey ares mark "recessions"):

This statistic is of course already well known, but what really gives huge cause for concern is a second statistic that I wasn't aware of up until now: The statistic about the average duration of unemployment in the USA from 1950 to today. Headline: "Long-term unemployment at an all-time high."

Explanation of the German terms: "In Wochen" means "in weeks", and "Durchschnittliche Arbeitslosendauer" means "average duration of unemployment."

This statistic really shows how dramatic the current situation is: During previous times of crisis since the second world war, the duration of average long-term unemployment in the USA peaked at around 20 weeks. These days, the average duration of unemployment in the USA has sky-rocketed: It's currently at about 35 weeks!

High-unemployment always has been a "gateway" for extremists, and that's why we cannot simply "declare" at this point that Sarah Palin is history and turn to other, more pleasant topics. In these times of crisis, the "usual rules" of politics don't apply any more. Irrationality will continue to gain a foothold in 2011.

The "silver-lining" on the horizon is that the economic growth is expected to stabilize, according to the next statistic. Headline: "Expansion stabilizes in 2011."

Explanation of the German terms: "Real gross domestic product, change in % to the previous quarter, yearly rate."

Then we have a statistic about the salary development. This is a bit more complex, but also very interesting.

Explanation of the German terms:

a) Red line: Rate of unemployment (scale on the right)

b) Dark blue line: Hourly salaries (scale on the left), change in % per cent, average every 3 months

c) Light blue line: Hourly salaries (scale on the left), in % in comparison to the previous year

Headline: "Risk of deflation - High rate of unemployment dampens the salary dynamic"

What is interesting about this statistic is that there only appears to be a relatively moderate rise in salaries in the USA since the 1980s, which also certainly doesn't help to stimulate the US economy in general.

The last statistic is a more "unusal" one: It gives an overview about the "due date" ("Fälligkeit") of commercial US-mortgages (in billion USD). Headline: "The problem of re-financing continues to grow."

It is interesting to see that the need for re-financing of US-mortgages will continue to be extremely high during the next years. This will certainly also be a problem with permanent political consequences: It will greatly affect many families in the USA and will not be helpful for the current US-government and for the President, as many people will blame the government for the ongoing problems.

Please be aware that such an economic assessment and forecast is only an opinion, and other economists might come to different conclusions. But the most striking fact in my view is the dramatic scale of the current unemployment in the USA, and the data is hard to dispute. Especially the huge, unprecedented rise of the long-term unemployment which will continue to open the path for political pied pipers. The huge unemployment is not the fault of President Obama, as these economic trends took many years to develop and have complex causes which were set way back in the past, but he will continue to be blamed for not finding a quick solution. I do hope that the majority of voters will make their choice in 2011 and 2012 with a cool head and will not be swayed by those people who come along with the cheap promise of flushing out the "elites."

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Additional note by Patrick:

On the one hand I can see that one might feel uncomfortable to talk about facts which might be "damaging" for the current administration. But let's face it: President Obama will be blamed for the current economic situation anyway. Isn't it better to:

1) Research the facts
2) Then explain with facts why

- Obama is not to blame for the problems he inherited
- Obama did everything possible to avert an even greater disaster

The data shows that many problems appear to be structural problems: They developed over a long period of time. It's not President Obama's fault that the current workforce partly seems to have the "wrong" qualifications, and that in previous years many jobs were shipped overseas.

President Obama made huge efforts during the last two years, including saving the car industry.

Therefore I say:

Gather the facts and throw them in the face of the teabaggers. Don't retreat, re.....no, wait.....respond. ;-)

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Please treat this in the comments as an open thread.

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