Obama is routing the recovery.
This is from Charles Gasparino over at the New York Post. This column reveals a version of Atlas Shrugged for the 21st century. Small businesses aren’t all necessarily going bankrupt or closing their doors and heading for Galt’s Gulch (I’m sure some are), but the well-run businesses are holding their cash tight and laying off workers to survive the attack on capitalism that is the modus operandi of the Obama administration:
The number-crunchers at the Treasury Department have been celebrating what appears to be the end of the Great Recession as told through rising GDP, higher business profits and a buoyant stock market. But owners of small businesses -- the usual engines of economic growth -- are still refusing to hire back workers as they normally do when the economy turns up from a sharp decline.Snip –
When Obama met with big bank leaders last month, he complained that banks weren’t lending to small businesses.
At one point, JP Morgan CEO Jamie Dimon politely interrupted Obama's monologue on how the banks should be lending more to small businesses to explain that many businesses simply don't want to borrow to expand their operations and hire more workers.
"Jamie basically said the demand for loans is way down because businesses, particularly those that are making money and can qualify for loans, simply don't want to borrow," said one person with direct knowledge of the conversation.
And they're not borrowing because they don't know just how high their tax bills will be when the president gets done implementing all his "hope" and "change." Snip –
Stock analyst, Peter Sidoti, researches smalls businesses and knows how they’ve survived the recession:
By cutting costs and hoarding cash, not expanding their business and hiring more people, even as the economy now is starting to recover.
During other recoveries, Sidoti says, firms like these would be hiring workers in droves as demand picks up for goods and services. This time around, they're not -- because "they don't know what their costs are going to be." And those costs are, of course, higher taxes.
He recalls a conversation with the CEO of one company he covers, Monroe Muffler, who said his average cost per worker is $35,000 a year, but he isn't going to expand his workforce much more if he has to pay another $8,000 a year in higher taxes, thanks to the new health-care plan and other government initiatives. Snip –
Now, does this sound like Atlas Shrugged to you?
The issue is strikingly similar to what the banks face. As we're all aware, the banks are making big money and waiting to pay out bonuses in the coming days. But the cash isn't coming from lending the money out. Instead, the banks are cutting costs, hoarding cash and investing some of it in low-risk bonds.
If you can still make money by laying people off and not expanding your business, why would you risk it at a time where government is out of control and promising to increase your costs down the road with a massive health care bill and a looming cap and trade fiasco? Can you say “jobless recovery?” FDR, here we come. Read it all here:
State of the States: broke and getting broker.
Frank Keegan, Editor of Watchdog.org, warns taxpayers of the pending tax increases in their states due to the profligate spending and fiscal mismanagement of taxpayer funds, especially in the often unreported mess made by earlier state legislatures’ promises of pensions to government workers.
Fiscal mismanagement leaders California and New York opened the hunting season on taxpayers.
Forty three other state legislatures convene soon to deal with the fiscal carnage they wrought through political profligacy and false promises to dedicated state workers during recent bubble years.
As of December, the National Conference of State Legislatures fiscal survey found: “Thirty-six states already report another round of gaps since FY 2010 began. The total now hit $28.2 billion, and the fiscal year for most states doesn’t end until June.” They already are in the hole despite raising taxes, cutting spending, squandering “rainy day” funds and using federal debt and accounting tricks to close $146 billion in cumulative budget gaps.
Those shortfalls pale against the lurid reality of unfunded promises to retirees, deferred public works projects and years of accounting tricks hiding true deficits.
Compounding all that is the fact that $248 billion in federal American Recovery and Reinvestment Act funds stop Dec. 31, halfway through most states’ fiscal years.
And, according to the National Governor’s Association “Fiscal Survey of States” released last week, “the $87 billion in Medicaid funds and the $48 billion in state stabilization funds … allowed states to offset planned budget cuts and tax increases,” meaning that’s another $135 billion they are going to have to take from somebody next year.
NGA admits some of these blunders and warn that taxpayers are in for a shakedown well after any national economic growth: “Even when recovery begins in the 2014–2015 period, states will be faced with a huge ‘over hang’ in needs and will have to accelerate payments into their retiree pension and health care trust funds, as well as fund deferred maintenance and technology and infrastructure investments. They will also have to rebuild contingency or rainy day funds. All of these needs were postponed or deferred during the 2009-2011 period and will have to be made up toward the end of the decade. According to a 2007 Pew Center on the States report, states have an outstanding liability of about $2.73 trillion in employee retirement, health and other benefits coming due over the next several decades, of which more than $731 billion is unfunded.” Snip –
Orin Kramer, chief executive of New Jersey ’s beleaguered pension fund, told the Financial Times this week America ’s total state pension unfunded liability is more than $2 trillion.
And the Government Accountability Office just released a study showing a minimum $530 billion deficit for retirees’ Other Post Employment Benefits, though GAO experts said that number is too low.
According to the American Society of Civil Engineers, America needs to invest $2.2 trillion over the next five years just to fix and replace “critical infrastructure” beyond its “design life.” That means crumbling bridges, roads, mass transit and water systems, dangerous dams and spewing sewage.
The day of reckoning is upon us. Don’t count on the governors and legislators who have done this to us taking any of the cost out of their paychecks and benefits. Snip –
Republican California Gov. Arnold Schwarzenegger and Democrat David Paterson of New York gave their state of the state speeches Wednesday without including these huge hidden deficits.
Schwarzenegger put his state’s operating deficit at $20 billion and called for reform of “unsustainable” pension benefits going forward, but did not specifically include the minimum $62 billion in liability for retiree health benefits and Zero dollars set aside to pay it even though California increased taxes $10 billion last year.Snip –
Governor Patterson of New York has a similar story to tell, if not quite as outrageous as California’s, which you can read at the link.
… indication of how honest governors are going to be with taxpayers about the mess they’ve gotten us into, we would be safe to expect every governor and every legislature to deceive us.
According to the Center on Budget and Policy Priorities, the fiscal crisis of the states could quench any spark of national economic recovery.
Increasing taxes to pay for such government folly will guarantee it.
Now is the time for citizens to act. We must raise our voices to stop devastating tax increases to pay for folly.
This catastrophe came upon us without warning from traditional news media. It is taking most legislators and even some governors by surprise.
If ever there was a reason for citizens to become watchdogs, this is it. Contact your governors and lawmakers, learn details of your state budget.
Second video on the Constitution.
Napolitano takes on the Congress in part two of his five-part series.
