Trump’s Promise

Guest Post by John Stossel

Trump's Promise

President Donald Trump promised he’d get rid of bad rules.

“Remove the anchor dragging us down!” he said when campaigning for president. “We’re going to cancel every needless job-killing regulation!”

Trump was a developer, so he knew that the thicket of rules government imposes often makes it impossible to get things done.

But would he keep his deregulation promise? I was skeptical.

Republicans often talk deregulation but then add rules. People called President George W. Bush an “anti-regulator.” But once he was president, he hired 90,000 new regulators!

Trump has been different.

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Much Better Than: You’re Fired!

Guest Post by Eric Peters

Trump has imposed a regulatory freeze and has threatened a hiring freeze – no new federal “workers” for now (and hopefully, some time to come).

No wonder the stock market is up.

America might just get back to work again.

Here’s another means toward that end that hopefully Trump will deploy: An executive order that henceforth, future regulations must pass a cost-benefit analysis and be subject to congressional approval before they could be imposed on the people who will bear the cost.

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And Jill Came Tumbling After…

by Uncola via TheBurningPlatform.com

It was morning drivetime in the city and Jill’s mind was racing. She navigated her Cadillac Escalade recklessly from the far left lane into the far right, before coming to a full stop on the exit ramp.  Looking ahead over the multi-colored rows of stalled traffic, she could see the stoplights one half-mile forward at the top of the incline, like tiny dots of red ink splashed upon the cerulean sky.

“Fuck! Fuck! Fuck!” she said as she stamped her right hand onto the top of her steering wheel three times.

She felt a familiar sense of panic envelope her as she leaned over to glance at herself in the rearview mirror.  “Bad hair day”, she muttered as she carefully readjusted the rhinestone circle hair pin that was now coming loose above her right ear.   With that tightened again and back in its place, she checked her lipstick by squinting her eyes slightly, leaning her head backwards a little and smacking her lips before the mirror with a pop.

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Barack The Regulator: Obama Added Record 635,448 Pages Of Regulations During His Presidency

Guest Post by Anthony Sanders

We could write a song about soon-to-be-former President Barack Obama and he penchant to burden the economy with endless regulations. We would call it “Barack The Regulator” (not to be confused with “John The Revelator.”) But the melody would be the same.

Obama is the only president to ever surpass the 80,000 mark of regulatory pages produced, achieving the feat four times.

screenshot-2016-11-17-at-2-54-12-pm-197x300

President Obama’s Federal Register added 572 pages on Thursday (Nov. 17) alone!

Obamacare, Dodd-Frank, Consumer Financial “Protection” Agency, EPA, etc? Land of the free is now the land of the over-regulated.

Check it out. Obama holds the record for the four largest increases regulatory pages, George W. Bush is in 5th place, then Obama again in places 6-8, Bush again in places in places 9-10, then finally Obama again in 11th place.

A 2014 report by the National Association of Manufacturers found that regulatory costs on all firms exceed $2 trillion annually and disproportionally affect small businesses.

And you were wondering why startups and firm creation in the USA are so low? Thank Barack The Regulator!

songlarge024


The Regulatory Burden in the U.S. is a Whopping $4 Trillion

Via Visual Capitalist

One of the big problem with regulatory policy is that typically new regulations are only added – never subtracted.

A good example of this is the federal tax code, which is now 74,608 pages long.

It’s an astonishing 148x longer than it was under President Franklin Roosevelt’s New Deal:

Federal Tax Code Complexity

If all you have is a hammer, everything looks like a nail. Regulators add new regulations to “solve” problems, but there is much less political will to actually go back and sort through any outdated, ineffective, or convoluted regulations of the past.

Continue reading “The Regulatory Burden in the U.S. is a Whopping $4 Trillion”

THE ODDS ARE NEVER IN YOUR FAVOR

The irony of the phrase “may the odds be ever in your favor” is not lost on the readers of the Hunger Games trilogy of novels or the film adaption. Despite the grimness of the story, over 65 million copies of the books have been sold. The total box office take so far has exceeded $1.4 billion for the four movies. The dystopian series tackles real issues like severe poverty, starvation, torture, oppression, betrayal and the brutality of war. It doesn’t fit into the standard film making success recipe of feel good fluff, politically correct storylines and happy endings. Each film in the series gets progressively darker, with the final episode permeating doom and gloom. The books and the movies capture the deepening crisis mood engulfing the world today. And they realistically portray the world as a place where there are no good guys in positions of power. The ruling class, in all cases, is driven by a voracious appetite for supremacy, wealth, and control.

An Ambiguous, Confusing, Dangerous World

The world is a morally ambiguous place where those in power and those seeking power utilize the influence of media propaganda and PR campaigns built around “heroes” and “icons” to psychologically control the masses, while enriching themselves and their crony capitalist sponsors. Endless war against the latest “bad guys” further enriches the arms dealers and their political lackeys who joyfully use faux patriotism and nationalistic fervor to insist upon more boots on the ground, drones in the air, bombs dropped, and missiles launched.

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Atlas Shrugging

Guest Post by Eric Peters

It may be that Atlas is beginning to shrug.Atlas shrugged image

You remember Atlas. The mythical giant who struggles to support the world on his mighty shoulders. One day, his strength gives out. Or his will. His desire to bear the burden.

So, he shrugs.

Volkswagen just did exactly that.

The automaker says it cheated on federal emissions tests because company engineers considered it “impossible” to pass them.

Italics added.

Read that again.

A major-league automaker, with an entire engineering staff at its disposal, found it impossible to comply with the federal government’s emissions fatwas. It would have required unacceptable (to VW’s customers) functional compromises – or unacceptable costs.VW diesel 1

So, VW elected to shrug.

Screw the tests. Screw Uncle. We are in the business of building cars that must be appealing to our customers, such that they are willing to part with hard-earned money in exchange for them. If that means the cars are not “compliant” with the government’s endless laundry list of demands … well, so be it.

How long before others do something similar?

It is inevitable. Something has got to give.

Because the well is not bottomless. All the things demanded by government, someone’s got to pay for. And when there are no longer enough someones willing (or even able) to do so, the American economy will go the way of the Soviet economy.

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The War on Cars… Parked and Otherwise

If you are a car person – or just want to be able to park your car in your own damned driveway – be sure you read the fine print before you buy a house in a neighborhood that has an HOA.too many cars pic

Or – worse – peculiar zoning ordinances.

But even if you do read them, it may not matter. Because the rules can change at any time – and when that happens, your choices boil down to obey – and pay.

Or, move.   

For instance, this:

A local news affiliate in Cobb County, Georgia (see here) covered the saga of the Oviedo family, well-scrubbed and extremely middle-class. The family was targeted by local code enforcement bureaucrats (remember BTK?) for having “too many” cars parked in their own driveway.

How many is “too many”?

Four, as it turns out.

The county passed an “open space community” zoning ordinance after the Oviedo family bought their house. Faster than you can say ex post facto, it became an offense – punishable – for any homeowner to have more than two cars parked outside.

The idea being to “encourage” people to not own cars at all – by making it a hassle to own them.

It wasn’t that the cars were parked on the lawn.

Continue reading “The War on Cars… Parked and Otherwise”

THE MORE RESTRICTIONS, THE MORE MORONS


We are all Idiots who Have to be Saved from Themselves

 

“Forced by the verdict of a German court, a long-established fishmonger in Hamburg had to attach a sign above his shop’s counter recently, which informs his customers that “fish may contain fish bones”. Packs of peanuts meanwhile contain, as requested by law, the hint that they “may contain traces of nuts”. For the same reason, irons nowadays often bear the request to please not iron things while one is wearing them. Who would have thought?”

 

The above is from a recent report in the Austrian press. German best-seller author and journalist at “Der Spiegel”, Alexander Neubacher notes in his new book “Total Beschränkt” (“totally restricted”) that this “over-protective policy” actually creates the very helplessness which it ascribes to citizens. He asserts: “Prohibitions are triumphing over reason – the more restrictions, the more morons” (in the German language, the sentence lends itself to word play: “je mehr Beschränkungen, desto mehr Beschränkte”).

He points out that “the State wants to wean us from thinking with ever more regulations, and makes us into idiot citizens who have to be saved from themselves”. The paternalistic infantilization of citizens by the Nanny State is nothing new, but it has become such a scourge in Europe that it has actually spawned an entire literary genre of complaints by now, one that is apparently selling extremely well.

 

wmiccjCitizen, you clearly need help: the image Europe’s bureaucrats have of their fellow men

(Photo via taringa.net / Author unknown)

 

According to the article, Mr. Neubacher’s book should be regarded as the new “standard work” on the topic. The bureaucratic nannies in the EU have provided him with a formidable wealth of material.

Thus the reader learns e.g. that on German territory, bicyclists using an electric bicycle that “only supports pedaling” may have a blood alcohol level of up to 1.6 per mil without being in danger of losing their driver’s license, whereas drunkards using an electric bicycle that “also works while idling” may not exceed a 0.5 per mil threshold. In parts of Berlin, no second bathrooms, no open chimneys and no elevators may be added in apartment renovations; on drilling platforms and wind farms in the North Sea there not only have to be medical supplies and cookies in storage in case of emergencies, but also a “pack of cards”. Prohibitions, says Neubacher, are generally overrunning our daily lives like “knotweed on a cemetery wall”.

 

knotweedBeware the giant knotweed

(Photo via phyllophilus.blogspot.co.at)

 

Responsible Parties

Montesquieu, who died in 1755, formulated a general rule for a well-run state that has been long forgotten: “If it is not necessary to make a law, it is necessary not to make a law”.

Neubacher not only provides an extensive encyclopedia of the protective siege, he also names those responsible and their motives: politicians, he says, believe they need to be seen to “do something” – and it is easier to pass rules and regulations concerning completely unimportant details of life, than actually doing something substantive. So these regulations are in a way decoys, designed to distract from the politicians’ ineptitude.

 

portrait-of-charlesmontesquieuCharles de Montesquieu: purveyor of good advice that has been ignored

(Image © Bridgeman Art Library / Versailles)

 

With regard to this, we would however note that we are even more worried that they might actually do something “substantive”, so our concerns certainly differ from Mr. Neubacher’s in this particular respect.

Neubacher also points out that an entire industry has sprung up under the guise of supposed “consumer protection”, with numerous influential industry lobbies benefiting greatly from regulations and paternalism, which have created “profitable, crisis-resistant business segments, that make a lot of money on the back of Nanny State regulations”.

This is e.g. immediately obvious when considering the ban prohibiting the use of incandescent light bulbs in the EU: allegedly introduced to “save the planet”, the ban’s man aim has always been to “increase the profits of Osram”, which along with other lighting producers lobbied heavily for its introduction. Ever since, Europe’s citizens have been forced to sit in lighting reminiscent of a morgue. As Lord Christopher Monckton remarked to this, given that this morgue-like lighting is highly likely to discourage reading, the continued dumbing down of the population has probably been given a major shot in the arm by the light bulb ban.

Among the many examples for connoisseurs of the prohibitions and regulations created by the “preventative-bureaucratic complex” in Neubacher’s book, we also find the recent establishment of a cemetery for lesbian women in Berlin – where men, you guessed it, are prohibited from being buried. Thus the bureaucrats have ensured peace of mind for members of Berlin’s lesbian community even after they have shuffled off this mortal coil. One cannot even escape the nannies by dying anymore.

 

Germany-opens-lesbian-only-cemetery.-Photo-SMHInauguration ceremony of the new “lesbians only” cemetery in Berlin.

(Photo source:  AFP)

PUSSIES & BUTTERFLY CHASERS

While in Wildwood for Memorial Day weekend we witnessed the usual obese tattooed pierced masses aplenty. The foul mouthed multitude of morons were out in force consuming vast quantities of fried oreos, boardwalk fries, Mac’s pizza, Kohr’s ice cream, and Laura’s fudge, before drinking themselves into a stupor. Meanwhile, the air conditioner in my money pit condo was throwing in the towel after 13 years. What was another $4,400 for a new air conditioner for my underwater “investment” property?

But at least we had our bikes, the boardwalk and the ocean. Avalon and I went on our usual early morning trek to “the rocks” at 2nd & JFK Boulevard. The rocks were the jetty that has been there for decades. When I was a kid we would walk our dogs down to the rocks every night. My Dad taught me how to fish from those rocks. I inherited my Dad’s patience. I could stand on those rocks for hours, casting my line into the glistening ocean and waiting for a flounder, blue or weakie to take the bait.

I never fell off those rocks. I never saw anyone ever fall off those rocks. If I had fallen, my Dad would have called me a dumbass and told me to get up. The jetty was always wet from the ocean spray. Slippery green moss grew abundantly. It’s called nature. In the America I grew up in, if you fell down, you got up. You didn’t sue someone because you were an idiot who couldn’t keep their balance. The jetty was created to protect the beaches from erosion and has been used by Dads teaching their kids to fish since the 1960’s.

You can’t stand on those rocks anymore. According to the control freak government drones, it’s now a crime to step foot on those rocks. They threaten to fine you and throw you in jail for stepping foot on some rocks that have been stood upon without incident for fifty years. The picture below captures the pure utter idiocy of a government gone wild. What a pathetic joke this country has become. Some politician listens to some lawyer, who thinks city insurance rates will be lower if they put up some ridiculous danger sign to keep citizens from enjoying themselves and carrying on a tradition of fathers teaching sons how to fish. I wonder if those two four year old girls realized how much peril they were in.

Does that two foot drop from the jetty strike you as life threatening? This is what passes for high risk in this nation of pussies. But the government drones didn’t think one ridiculous sign was enough. They had to cement in a second sign to provide the exact same message. Sometimes I wonder how low the IQs of the government drones must be. It almost as if they are incapable of using their brains.

After escaping this perilous landscape, we hopped back on our bikes, taking our lives into our hands by not wearing helmets like Obama, and rode another quarter mile to the Hereford Lighthouse to take in some more scenic views. The lighthouse is surrounded by lovely well kept flowering gardens. The gardens are well manicured and weeded by meticulous Boomers. These old folks look down upon visitors with children. They love rules and regulations. Avalon and I had to laugh and shake our heads when we saw the sign below. These control freaks actually think butterflies care about kids chasing them. They think they can stop this butterfly abuse with a sign.

What is it with control freaks and signs? There are a vast swath of people in governmental positions of authority who don’t think you can make rational decisions without their rules and regulations. They don’t trust you to live your own life. They want to control every aspect of your daily existence. Every law, regulation, directive, bylaw, rule, edict, decree and command imposed upon our lives by sociopathic, unintelligent, controlling government apparatchiks takes away freedoms, liberties and our right to live our lives as we see fit. Years of indoctrination in government run schools and being inundated with decades of propaganda preaching “government knows best” has brainwashed the masses to accept and embrace the ridiculous notion that these control freaks make us safer, improve our lives, and act in our best interests.

Will we ever come to our senses, take personal responsibility for our own lives, and shake off the yoke of authoritarian government control? I keep looking for signs.

THE OBAMA DOCTRINE: AT ANY COST

“Of course, increasing energy costs drives up the price of literally all goods and services, in addition to destroying jobs, so this only scratches the surface. What we are witnessing is the deliberate lowering of the American standard of living out of ideologically motivated malice by executive fiat.

The highest price of all won’t come in terms of dollars, but will be paid in something more precious still: liberty. Obama and other extremists in the government tried to impose this regulation through legislative means but failed. So Congress was shoved aside; the rules are to be imposed by unelected and unaccountable EPA bureaucrats. The division of powers established by the Constitution is collapsing because Congress evidently does not have the character to defend its domain from usurpation by the executive branch.”

Dave Blount on Obama’s killing coal directives

How many more times does Obama need to shit on the U.S. Constitution, ignore Congressional and Judicial requirements, and cover-up his administrations crimes before someone with balls will step forward and start impeachment proceedings. Obama is a dangerous sociopathic tyrant who needs to be removed from office before he destroys what remains of this country.

Obama and his extremist sycophant followers do not care about making your life better. They know their rules, regulations, laws, and procedures will not actually do anything to save the planet. They want control over your lives at any cost. Their control freak initiatives are designed to provide government with complete control over every thing you do. Destroying the coal powered plants that currently provide 40% of our electricity, with no legitimate alternative, will have one and only one impact – driving the price of electricity higher. These communists dropped out of economics class in college to take classes in community organizing. The law of supply and demand is inconsequential to ideologues with an agenda of complete control.

The EPA’s own regulatory analysis of its rule to cut carbon dioxide emissions from existing power plants says it will hike retail electricity by as much as 6.5% by 2020 — all while forcing 19% of the U.S. coal-fired capacity to shutdown and decreasing coal production by up to 28%. “Under the provisions of this rule, EPA projects that approximately 46 to 49 GW of additional coal-fired generation (about 19% of all coal-fired capacity and 4.6% of total generation capacity in 2020) may be removed from operation by 2020,” the EPA says in its regulatory impact analysis of the Obama administration’s Clean Power Plan. The decrease in coal-fired power will also cause natural gas prices to rise up to 11.5% as an additional 1.2 trillion cubic feet of natural gas is used to make up for the lack of coal power in 2020. And this is information from the government drones who think this is a great idea. The true impact will be ten times worse.

But the U.S. Chamber of Commerce reported that EPA’s power plant rule would increase peoples’ energy costs by $17 billion per year. In total, the EPA rule would cost the U.S. economy $50 billion annually and kill 224,000 jobs per year. Previous EPA regulations have already set the stage for skyrocketing electricity prices. The Mercury Air Toxics Standard (MATS), which comes in full effect in 2016, has already been predicted to force many coal plants to shut down and help drive up electricity costs.

These rules and regulations will add an average of $145 annually to all 117 million household electricity bills in the United States. The U.S. Energy Information Administration (EIA) says closing coal plants will drive up natural gas prices by 150% over 2012 levels by 2040, this cost rise will cause electricity prices to jump seven percent by 2025 and 22% by 2040. Obama and his minions are hanging their hats on the shale gas storyline of hundreds of years of natural gas. The entire storyline is a sham. The propaganda is false. Killing coal will drive the price of natural gas sky high and create shortages, blackouts, and misery for the American people.

Senator Thune has it right:

“Make no mistake, the administration’s proposed rule is nothing more than a national energy tax that will be yet another sucker punch to middle-class families struggling to get by in the Obama economy. These regulations, which will increase electricity costs, will especially hurt low-income families and seniors who live on fixed incomes and already devote a large share of their income to electricity bills. In addition to hurting families, the regulations will destroy jobs, while essentially doing nothing to improve our global environment. The president’s proposed regulations are lose-lose-lose.”

Everything Obama supports is designed to take money out of your pocket and put it into the hands of government drones who think they know how to spend your money better than you. While Obama destroys our energy delivery system and further impoverishes senior citizens and the poor, the government grows ever more powerful and infiltrates every crevice of our lives. Our liberties, freedoms, and right to live our own lives is stripped away.

As Obama and his apparatchiks destroy our economy in the name of saving the planet and providing “free” healthcare for the masses, China and India bring 4 coal powered electricity plants  online every week.

Global demand for coal is expected to grow to 8.9 billion tons by 2016 from 7.9 billion tons this year. China is expected to add about 160 new coal-fired plants to the 620 operating now, within four years. During that period, India will add more than 46 plants. The U.S. has the largest supply of coal on the planet and we will be shutting plants as China and India build them. How exactly is the planet benefiting from this?

Lastly, do you find it interesting that the regions with the least economic impact from Obama’s regulations are areas controlled by Democrats and those impacted the most are controlled by Republicans? I’m sure it’s just a coincidence. Obama wouldn’t play politics with our energy.

TAXMAN COMETH

 (If you drive a car ), I’ll tax the street,
(If you try to sit ), I’ll tax your seat,
(If you get too cold ), I’ll tax the heat,
(If you take a walk ), I’ll tax your feet.
Taxman.

The Beatles

The desperate government drones are flailing about in their death throes, frantically trying to milk the taxpayer cow for every last drop before they die of thirst. These feckless politicians have wasted your money for decades on worthless programs and projects. The do gooders have pissed away your money on public education and the union government drones running the education system. The result has been millions of clueless dupes who can’t think for themselves.

Politicians have destroyed our major cities by taxing the citizens and businesses to the point that producers leave. They have made entitlement promises that can never be honored. Detroit was the 1st domino to fall. The idiots running the City of Philadelphia are too stupid to see they are on the exact same path as Detroit. The tax base is gone. They are left with hordes of free shit army privates. Rather than deal with reality and cut expenses, they try the same old solution – create new taxes, new regulations and new laws.

It seems the job of government drones is to crush entrepreneurial spirit, deter innovation, restrict freedom, and tax the shit out of anything the moves, breathes or helps others. Three young dudes, fresh out of college created an idea called Air Bed & Breakfast, now called Airbnb.com, in 2008. The idea was for individuals with spare rooms to be matched up with other individuals in need of a room. Two individual people coming to a mutually beneficial agreement and eliminating corporate hotels, ridiculous rules, regulations and taxes does not sit well with the oligarchs and politicians. They aren’t getting their slice of the pie. Of course, their slice would amount to nine-tenths of the pie.

These three entrepreneurs have grown their business to $2.5 billion in five years. It’s amazing what individuals with a great idea can accomplish without Obama subsidies, the government deciding winners and losers, and control freak do-gooders imposing rules, regulations and taxes to stop the business dead in its tracks.

Airbnb epitomizes the sharing economy, in which folks rent or swap all kinds of underused assets – spare rooms, cars, parking spots, lawnmowers, children’s clothes or their time.The new sector inspires almost messianic devotees who say it’s an engine of innovation that creates value out of thin air, conserves resources, empowers ordinary people to be entrepreneurs, and disrupts industries and corporations.

The slumlords, corporate hotel chains, and tax & spend politicians are outraged at this dreadful act of liberty and freedom by people across the country. And they are going to do something about it. Democratic councilman Bill Green of Philadelphia is going to stop these entrepreneurial terrorists before they make too many people satisfied. He is so impressed by their service he wants to tax and regulate the shit out of them.

“It’s a product that I use when I travel. And its something that’s clearly being used here, and we’re not enforcing the law. So we might as well figure out a way to create a registration process, and tax it, [so] that [it] works with our zoning code.” 

“Right now, it’s underground, so we have to figure out how to make the sharing economy, whether its ride sharing, car sharing, Airbnb or other things like that that work with Philadelphia’s zoning code.”

What would we possibly do without politicians protecting us from ourselves and creating taxes to crush new businesses? We truly need to starve the beast. We need to expand the underground economy and starve these bastards of their taxes. Barter with people. Conduct as many transactions in cash as possible. The laws and tax regulations were written by the corporate fascists to benefit the corporate fascists. Their kingdom built on a foundation of lies and false promises is crumbling. Let’s give it a push by starving them of their tax and fee revenues.

MAIN STREET VERSUS WALL STREET

Do small businesses, which account for 65% of all the new hiring in the country, become less optimistic during an economic recovery?

After another false start, small business confidence has sputtered and stalled again. For the sector that produces half the private GDP and employs half the private sector workforce -— the fact that they are not growing, not hiring, not borrowing and not expanding like they should be, is evidence enough that uncertainty is slowing the economy. Virtually no owners think the current period is a good time to expand, because they simply don’t know what the future holds. So why invest? And with the lack of any sustainable fiscal policy or a federal budget, no one’s banking that Washington will be at forefront of any meaningful change. Overall, it appears that there will be little growth coming from the small business half of the economy; as the world economy slows, even big business may suffer. NFIB chief economist Bill Dunkelberg

Small Business Optimism Down in March

The March NFIB Index of Small Business Optimism ended its slow climb, declining 1.3 points and landing at 89.5. In the 44 months of economic expansion since the beginning of the recovery in July 2009, the Index has averaged 90.7, putting the March reading below the mean for this period. Of the ten Index components, two increased, two were unchanged and six declined. Among the greatest declines were labor market indicators, inventory investment plans and sales expectations. 

Small business optimism report for April 2013

Small business owners are on the ground near the real people. They aren’t sitting in ivory towers at Princeton playing with regression models. They aren’t programming their high frequency trading computers to buy the dip. They aren’t calculating their bonuses and stock option compensation. They are trying to make payroll. They are trying to sell products. They are trying to understand how badly Obamacare will screw them. They are trying to navigate through the hundreds of thousands of rules, regulations and laws that are passed by politicians. They are paying experts thousands of dollars to decipher and comply with the IRS tax code. Well guess what? They have no plans to hire anyone and they expect sales to go lower.

Small business optimism components

Ben Bernanke’s money printing is not benefitting them in any way. His policies are not generating jobs. His policies are impoverishing savers, who now have less money to spend at small businesses. Ben Bernanke’s policies are designed to benefit Wall Street banks and mega-corporations. His policies are designed to drive stock prices higher and enrich the connected crony capitalists that control the country. Meanwhile, small businesses and small people are dying on the vine. The real economy is withering away under the weight of massive debt, crushing taxation, and ponderous government regulations and red tape.  

Top problems of small business owners

There has never been a greater disconnect between Main Street America and Wall Street in our history. It will not end well. Bill Dunkelberg seems to be an economist with common sense, as opposed to the Keynesian morons like Krugman and the other Wall Street shills paraded on CNBC.

 

COMMENTARY BY CHIEF ECONOMIST BILL DUNKELBERG

Bill "Dunk" Dunkelberg
NFIB Chief Economist
William Dunkelberg

Small business produces half the private GDP and employs half the private sector workforce. But it is not growing, not hiring, not borrowing and not expanding enough. Small business owners have been depressed since 2007 and that has not changed. In the March survey of NFIB’s 350,000 member firms, 77% expect the economy to be no better or even worse 6 months from now that it is currently. Only 4% think the current period is a good time to expand substantially, compared to an average of 17% for the period 1973 to 2007. More owners plan to reduce employment in the coming months than plan to create new jobs. More owners plan to reduce their inventories than plan to order new stocks. The bulk of growth comes from the increase in our population of about 3 million people and the growing need to simply replace stuff that is wearing out, not enough to get the economy back to trend growth much less the strong growth needed to restore employment to 2007 levels.

The Federal Reserve continues to assert its intention to purchase a trillion dollars of Treasury securities and mortgages, adding a trillion dollars to its portfolio and stuffing a trillion dollars of new liquidity into the banking system, until the unemployment rate falls below 6.5% or inflation breaks out. Then it will “consider” changing policy. Unless something really bad happens, this is a winning strategy for the Fed because eventually the private sector will improve, the labor force will shrink (as boomers leave), the unemployment rate will fall and the Fed can claim its policies “worked”, even if their policies made no contribution to the improvement or even slowed it down by creating uncertainty and fear among investors and business owners.

This is a risky strategy. The evidence that “uncertainty” is slowing the economy is pretty clear now (research at the San Francisco Federal Reserve for example) and uncertainty probably increases with the size of the Fed’s portfolio (as has the price of gold). The real economy is hardly growing yet the stock market and corporate profits are at record high levels. How do we make a record amount of money without producing more output and employing more workers? Such contradictions breed uncertainty.

In the meantime, a record low percentage of small business owners claim that credit is their top business problem (3%) while taxes get the most votes (23%). Record numbers of owners have no interest in a loan (over 60%), because they have no use for the funds that have a high probability of successfully generating a return so the loan can be repaid. The Fed has made sure that there is plenty of money to lend, but in the process may have reduced the confidence that borrows need to take risks, borrow, spend and expand. And then there’s the impact of fiscal policy (or the lack of a policy). The President is flying around the country doing fund-raisers and stumping for gun control, but he still has presented no budget proposal. Enough said.