This page has been archived and commenting is disabled.
The Hard Numbers About Obama’s Anti Business Campaign.
I’m a numbers guy, OK? Give me a set of hard data, and I’m happy to draw my own conclusion. Save the argument, the persuasion, and the spin for someone else.
You may have heard from the media lately that President Obama hates business, deplores businessmen, and is derailing the economic recovery with his anti business policies. So I set out on a hunt for the hard numbers to support these assertions, and found data for S&P 500 earnings going back to 1935 (click here for the chart at http://www.madhedgefundtrader.com/july-21-2010.html ).
When the former junior Senator from Illinois took office in January, 2009, inflation adjusted earnings, at $7/share, were the lowest in 75 years. They have since rebounded 857% to $60 a share, and most analysts are pegging $75 a share for 2011, close to an all time high. This has been the most rapid recovery of corporate earnings in the history of the country.
So, I thought, this can’t be right. What about Obama’s relentless attacks on greedy banksters and Wall Street fat cats? So I hurried to www.stockcharts.com to see how these pariah institutions have fared. Since inauguration day, Bank of America’s (BAC) stock has rocketed by 220%, while my alma mater, Morgan Stanley, is up a healthy 32%. But I thought the financial reform bill was supposed to drive these people out of business, right?
What about GDP? It has to be terrible. But when I checked the data it showed that the economy has grown during the last 18 months, and that GDP is actually at an historic peak.
I desperately searched everywhere. Rail car loading, container shipments, UPS and Fedex traffic. No matter how hard I looked, the only data I could find showed that business has prospered mightily under Obama, with many, like Citigroup (C), up a stunning 102%, rescued from the edge of bankruptcy.
Then I had my Eureka moment. Jobs! There has been so much talk about unemployment lately that maybe the Department of Labor would help me out in my quest. Aha! Sure enough, the unemployment rate has plunged, and I mean absolutely crashed, from 7.8% to 9.5% (click here for the link at http://www.bls.gov/ ) . That explains why jobs have emerged as the central issue in this year’s congressional races, how Sarah Palin has suddenly become a labor economist, and how Fox News has morphed into the “Where Are the Damn Jobs” channel.
Wait a minute! Didn’t the Bush administration create only 1 million jobs in eight years, compared to 23 million by President Clinton? This must be some sort of statistical anomaly. I frantically scrolled through the BLS site, seeking the smoking gun proving Obama’s anti business proclivities. To my great dismay, all the evidence pointed to an unprecedented improvement in the monthly nonfarm payroll, from a loss of 700,000 to a gain of 100,000, a swing of 800,000 in only 16 months. This is the most dramatic jobs comeback in history.
That’s not what the talking heads on TV are telling me. Isn’t employment supposed to be a deep lagging indicator? I’m confused. Could it be that Obama is actually pro-business, and has only been lashing out at those who caused our current crisis, like super leveraged banks, leaking oil companies, and grasping health insurance monopolies? None of this is making any sense. Help me out here, Sarah. Saraaaaaaah…..!
I think I’ll go back to looking at my numbers.
To see the data, charts, and graphs that support this research piece, as well as more iconoclastic and out-of-consensus analysis, please visit me at www.madhedgefundtrader.com . There, you will find the conventional wisdom mercilessly flailed and tortured daily, and my last two years of research reports available for free. You can also listen to me on Hedge Fund Radio by clicking on “This Week on Hedge Fund Radio” in the upper right corner of my home page.
- advertisements -
That's quite a mouthful there, SheepDog-One. Failure to use the actual name of the President in your argument (argument?) is a clear indication of your position. "ObaMao"? Now that's clever. Not very artful as far as persuasion goes, but clever.
Communism theoretically is a system in which the proletariat control the means of production. Monopoly capitalism or Corporatism, the system under which we live, transfers ownership of the means of production to private, oligarchical hands. Nothing that Obama has done has reversed the impoverishment of the middle class and indeed has helped with the transfer of wealth to the oligarchs (and OILogarchs). He is a cog in the wheel of corporatism as is the whole Congress and judicial system.
Name callers and red herring peddlers are another cog whose purpose is to keep the misinformed and confused just that.
What businesses are not Pro-communist for the proletariat?
What business doesn't want government to take over their pension liabilities, legacy costs concocted by management and unions? What businesses besides Big Pharma, doesn't want government paid health care?
You should open your mind to the qui bono strategeries of business which views EVERYTHING as simply a tool to make more money, even socialism and communism.
It's all good if you're a financial fat cat trader -- like you. Nearly every one of your postings is pushing your book, why are you given such billing here...?
It's just too easy to spin the numbers no matter who you are.
The President is not some Chief CEO responsible for all the good and bad in the economy. But we can relate policy decisions to outcomes.
When Bush took office, Total Nonfarm Payroll was 132,469,000. At the peak of his tenure, it was 137,951,000. That is an increacse of 5,482,000.
That peak was reached right at the point of the first of three minimum wage increases(laws and policy). Of course, you still hear very few people discussing this forgotten point. Other than me, no doubt.
Have We Forgotten the Minimum Wage?
http://www.nolanchart.com/article5985.html
Minimum Wage, Maximum Impact
http://www.nolanchart.com/article7010.html
Minimum Wage, Maximum ImpactRaising the Minimum Wage may have made the politicians feel good, but it has wreaked havoc on this Nation's Employment. How good are we feeling now?
by EJ Moosa
(libertarian)
Tuesday, November 3, 2009
Each month the employment numbers are released, and each month the numbers are worse. In fact, for 22 of the 26 months since the first minimum wage increase in July 2007 , month to month employment in the United States has been declining.
Source:Bureau of Labor Statistics
Prior to July 2007, only 1 of the 30 months preceeding showed a month to month decline in total employment.
July 2007 was well over a year before the "financial crisis" and the housing markets collapsed.
July 2007 was before the stock markets peaked (October 2007). So the stock markets were not a forward looking indicator of what was going to happen with employment.
All we needed to look at was government intervening in the labor markets to raise wages above what the markets would support to have an indication of what would happen. Common sense says if you raise minimum wage, someone will lose their jobs. The government denies that. The unions deny that. But companies that hire will confirm it. So do the numbers from the Bureau of Labor Statistics.
Before the first minimum wage increase in this latest cycle of government intervention, there were many metropolitan areas where the minimum wage offered by employers was higher than the minimum wage mandated by government. On the north side of Atlanta, you would have had difficulty finding a job that started at minimum wage. Why? The demand for labor by business could justify paying more money for that labor.
Yet when government intervenes, and the minimum wage rises higher than what business can justify, job cuts ensue.
Money is not free (unless you are printing it), and these companies had to find the money to pay higher wages somewhere. This money for the higher wages came out of profits.
At the end of the second quarter of 2007, corporate profits were $1,594.9 billion. They have declining ever since. For the most recent quarter reported they were $1,226.5 (second quarter 2009). This is a decline of 23%. Less profit by companies means less hiring going forward.
Source: Bureau of Economic Analysis
Minimum wage increased by 40.5% during that same time frame. Do you really believe there is no correlation here?
Labor is a resource in the United States. It is the most important resource (after our Constitutional Freedoms). To increase the cost of this resource arbitrarily by raising the minimum wage has been a disaster. This action had a cost. It may have been your job.
When another resource we use rose sharply we all felt the impact. We all changed the way we did things. What was that resource? Gasoline. Most of us may use one tank per week, and we felt the pain.
So what do you think companies who had to increase the pay to it's minimum wage employees felt? They felt the pain of raising wages and seeing their profits decline. Companies are not in bsusiness to earn less and less going forward.
Yet we had no Congressional investigations into the rise in the cost of labor. For they were the cause. And today we continue to feel the impact.
I mentioned the minimum wage in February 2009.
Have we Forgotten the Minimum Wage?
The labor situation is much worse today. Despite that, we raised the minimum wage anyway. Delaying the last increase was not even a consideration.
Minimum wage increases have had the maximum impact they could on employment, and in a very negative way. If you have lost your job, or had hours reduced, be sure to give the credit to those that have earned it. Let your Senators and Congressmen know how much they have contributed to this problem.
The American economy is right sizing itself at a rapid rate. If only Congress could truly understand the role they have played in all of this. Unfortunately, they would never believe it.
The wage structure in America starts like every building: from the ground up. Minimum wage is the ground level in terms of employment. To arbitrarily raise it is destructive to the balance of employment. And now we are suffering the consequences.
Before the increases, most small businesses were already operating on narrow margins of profitability. It's one of the reasons the businesses are still small. To force them to pay higher wages has forced them to reduce their head count. Higher unemployment is a direct result of raising wages beyond what the economy can support.
************************************
Bush showed how many people COULD be working in this economy, until Washington, like a bunch of back yard mechanics, kept tinkering with the economic engine until the damn thing stopped running.
Now everyone is pointing fingers and blaming the other guy.
I'll make this promise to you. Obama will never oversee an American Economy that adds over 5 million REAL non-government jobs.
I am libertarian in nature, but don't buy the minimum wage argument about destroying the economy. The multi-million dollar bonuses paid to executives and stock brokers could easily cover the wages for these beaten down employees. I am sure those oppressed billionaires could stand not buying a 5th or 6th Rolls Royce. Your raising minimum wage argument is pure bullsh*t.!
-99999999999999999999999
Minimum wage increases illegal immigration and incentivizes employers to outsource jobs overseas....
+100
LOL Yeah, if Obama were pro business he would shrink the public sector.
And don't confuse the S&P 500 with business. They are the oligarchies. Businesses are things like restaurants and plumbers.
Obama is clearly pro-oligarchy.
If he were Pro-Business, then why have the Federal Gv't employee rolls grown, and will continue to do so?.............( an estimated 17,000 new IRS people are needed just for the added implementation of the Health Care Bill.)
Why do GV't employees make 60% more than the average American worker?.
These jobs are never for creation of a product,or wealth, but for Larger Gv't, more control.
Clinton,did not creat dick, he INHERITED GHWB's upswing, and the second term, was forced to go back to center.
If BHO were Pro business,why are all the tax hikes hitting, and aimed directly at the Small / Med Business owners.........?
$250k, is NOT a lot of money when you have employees, and pay their taxes, and wages.
Geithner is dead set on still nailing the JOB creators...........at that level.( IF the Bush tax cuts are left intact for people under that).
He cannot do that without approval for BHO.Every policy I have seen implemented thus far is a JOB destroyer...........tax them to death.
If he was so Pro Business, why are American business's sitting on nearly a Trillion dollars of CASH, but will NOT hire, nor invest in any new equipment?.
Just getting by with what they have for fear of the NEW policies that have not yet come to light?.
I do not buy it for a second.
The big corporations are very good at downsizing quickly, and have done so.
In my two small businesses, I can't cut anyone, so they are not doing well.
Obama is pro-Obama. He's just another politician. What, you expected that he would actually change things? You expected that Bush would change things? You expect that the next bozo will change things?
Spot on.
Absolutely agree. He talks a good fight because his handlers tell him to - his so-called and very empty populist rhetoric is good for placating the masses, especially on the left - but if he REALLY gave a damn he would have sicced AG Holder on Wall Street and had him issuing 10 or 15K indictments to the people who participated in the biggest financial conspiracy in the history of mankind. Only when there are a few hundred Wall Streeters (and a bunch from Charlotte) a day cycling through Lower Manhattan District Court in leg irons will I believe that he isn't pro-oligarch... maybe.
I lay all our problems at Hammurabi's dusty doorstep. If it hadn't been for those damned Codes...
ZackAttack
What the creator of the universe holds no responsibility?
That snake offering up fruit of the tree of knowledge.
My bet is Loki, or Anansi. Fucking tricksters, maybe even Coyote.
Depends on whose business. Not my business...
Re "Sure enough, the unemployment rate has plunged, and I mean absolutely crashed, from 7.8% to 9.5%"
Since when is an increase in the unemployment rate (actually 22%) a plunge?
http://www.shadowstats.com/alternate_data/unemployment-charts
Since when are census worker temps, more FEMA/TSA/IRS agents and cleaning toilets productive job creation?
Big corrupt corporate government wrecked the economy, and Bailout Stim, 0Care, 0FinReg, 0GulfSpill and 0CapTrade just more of the same National Socialist agenda that rewards a very few at the expense of many, including productive small businesses forced to lay off workers or go out of business.
MHFT living proof that San Francisco Supervisor Wendy Nelder's concerns about putting fluoride in the water supply were correct, or MHFT another Leo Kevokolis shill.
Using MHFT logic, we should destroy the economy because the comps on the dead cat bounce may look so good...
LOL. Fairly, the last three administrations have been pro-great-big-businesses-that-make-political-contributions and pro-Wall-street, which also make big political contributions. The current administration has been more extreme in this regard than Clinton and Bush.
I regard the current rhetoric and financial reform from the administration as raw-meat to charge up the base--no bill authored by Barney Frank and Chris Dodd will actually reform Wall Street so that the middle class or not-TBTF main street benefits. It will just switch winners and losers on Wall-Street around a bit and, while doing so, will cause accidental side-effects.
However, none of the last three administrations have been small business friendly. They ignore that the Fortune 500 has not created a single job since 1950. All job growth has been in small or medium size businesses (mostly small).
What a crock of shit. Oh, no, now spin whatsover, just the numbers, ma'am. This stockbroker is using the kited S&P earnings which we all know come from corporations cannibalizing themselves and others through the rapacious M&A rampage in a nation where manufacturing is dying faster than a gang of octogenarians, and he uses the S&P to to "prove" that Obama is business friendly? When 80% of manufacturing and even services are outsourced and real unemployment is around 20% and this so-called economy remains afloat on borrowed and printed money only.
All I have to do is drive down the street to get an eyeful of the dozens of small businesses that have been wiped out, easily 25% here. Meanwhile, the bamster throws trillions at the banking mafia and this guy has the fucking nerve to claim that he's all numbers and no spin. I call bullshit on you, mister. Stockbrokers NEVER change, only their names do, spewing bullshit and lies is all they know how to do.
@noah vail
I remember reading a wonderful little post of yours directed at Wendy from the Bruce Krasting chronicles. You basically told her to go fuck herself, and stop expecting a free ride on someone else's coattails; life is tough, and she needs to stop expecting others to bail her out.
So now I ask you...
What is the difference between someone who expects others to help them, and someone who blames others for their failures? In a post another day, you were ranting that your business was down 70%, and you did nothing but point fingers at Obama and big government for your failure. And here you are again, correlating the demise of your neighborhood's economy with government's failure to manage the economy properly and Obama's supposed anti-business practices.
You may think this is harsh, but someone who blames others for their failures is really no different than someone who expects others to help them. It's all just finger-pointing, and it's all part of the same package.
Whether you find this article convincing or not, you need to accept responsibility for your own business, and stop pointing your finger at everything but you. We're all playing on the same field, and many others are doing quite fucking well. Your anti-Obama, anti-government blame-game is to no(ah) avail.
Perhaps you should invite Wendy for lunch and the two of you can cry on each other's shoulders. I find it particularly rich that you would tell Wendy to go fuck herself, yet you play the same finger-pointing game with regard to your own business. If only Obama fixed unemployment, you'd be doing better...right? Like all of us.
Stop blaming the referees, and learn to play the game even if you find it unfair. There are many other players on the field that have figured it out.
Ditto, not mine either and not looking good short to medium term. Perhaps it is because we are not defined as TBTF or a 'hidden hand' of the Federal Reserve?