Nearly Guaranteed Top 12 Predictions For 2023

No one is shedding a tear over the end of 2022.  Sharp inflation. Record food price hikes. Highest ever gasoline prices. Worrisome product shortages. Rising interest rates. Steep stock market losses. A porous border. Runaway federal government spending.  War in the Ukraine.  Good riddance to 2022. 

No even Nostradamus could have predicted the gloom of 2022.

When the calendar flipped to 2023, forecasters with short memories are peddling cheery news about everything from the stock market to inflation.  Optimists claim the new year will make Americans forget 2022.  Not so fast.  My occasionally reliable, highly unpredictable crystal ball is blinking red.

1. The country sinks into a recession, as predicted by a majority of economists and large banks.  The Gross Domestic Product (GDP) will be negative for at least two straight quarters this year.  The Biden Administration will avoid using the "r" word, referring to the crisis as a "temporary retraction." 

2. The economy will shed 1.1 million jobs as more major companies in the technology sector and big firms are forced to layoff employees in the face of less consumer spending.  First time unemployment claims increase each month.  Expect the unemployment rate to climb to 4.5% by year's end.

3.  Adding to the economic woes consumer credit card debt and personal loan delinquencies surge in the new year.  Consumers have been on a spending binge the last two years seemingly immune to inflationary prices.  A consumer retrenchment will negatively impact corporate earnings. 

4.  After the worse market since 2008, equities managers are clinging to history that shows markets tend not to experience two negative years in a row.  Equities bounce around early on before gaining momentum. Stocks finish the year strong with the S&P (+20%) outperforming the NASDQ and Dow. 

5. Home sales will reach their lowest point since the 1980's as interest rates make real estate less affordable, especially for first-time buyers. The good news is that the overheated increases in prices will abate except in a few markets where demand for high-end homes flourishes such as Texas and Florida.

6. The Federal Reserve, as promised by Jerome Powell, will continue to raises rates in the new year as inflation persistently refuses to fall lower than 5.8%. Food and energy prices leap higher than the CPI. Eventually, Fed hikes dampen growth, prompting Powell to forego a rate hike in fourth quarter.

7.  COVID infection rates soar past 70% in China after the Communist nation abandons its COVID Zero policy. New highly infectious variants develop as the virus rages, killing 1 million Chinese.  Chinese travelers spread the virus globally, leading to worldwide outbreaks.  

8. The Supreme Courts ends its temporarily halt of Title 42, which allows the expulsion of illegal immigrants under pandemic-era restrictions. The move unleashes a torrent of border crossings, prompting the forced resignation of Alejandro Mayorkas.

9. More fast food restaurants will join the robot revolution as testing by Chipotle, White Castle and others proves diners are satisfied with food prepared by robots.  The fast food industry will move quicker to adopt robots and AI as wage increases and the difficulty hiring workers persist.   

10.  The collapse of FTX Exchange, once a $32 billion enterprise, prods the Securities and Exchange Commission (SEC) to issue regulations for the cryptocurrency industry.  As more crypto exchanges and lenders file for bankruptcy, the new rules clamp down on the industry, softening currency demand.    

11.  The Chinese will not launch an invasion of Taiwan instead increasing menacing militaristic tactics to cower the island.  When the U.S. fails to intervene, China finds an excuse to encircle the island with a naval armada.  China threatens a blockade unless Taiwan makes concessions.  

12. Trying to speculate on Putin's strategy in Ukraine is a fool's pursuit.  But the most likely scenario is the European Union will push for a settlement as energy supplies dwindle, sapping economic growth. Ukraine is pressured into a diplomatic solution when EU/US commit billions to rebuild the country.   

Print this column and wave in your prognosticator's face at the end of 2023.  However, if you have your own predictions you would like to share, I would like to read them.  After all, the prediction business is full of people who get it wrong every year.  And that has never stopped anyone, including me.  

America's Looming Economic Disaster

When the September jobs report was a cataclysmic clunker, President Biden rolled out his teleprompter to read a prepared statement reassuring Americans the fragile economy is making headway.  "Jobs are up, wages up, unemployment down--that's progress," the nation's chief executive boasted.

While the economy has improved since the pandemic throttled growth, the distance from the current situation to the robust expansion of 2019 is a far, far galaxy away.  Any growth would beat 2020 when the economy contracted 3.5%, the largest decline in 74 years.  

Mr. Biden is right.  America is better off today than March of last year. However, before he took office, the economy had righted itself with 4.1% growth in the final quarter.  A steady recovery was underway, as American businesses were allowed to reopen. That rebound has continued at rocky pace.

Mr. Biden's view of the economy from the Oval Office is out of step with main street America.   Consumer confidence, a key predictor of spending, has plunged more than 19 points since its peak in June, according to the Conference Board.  Consumers are clearly not feeling Biden's optimism.  

Nagging supply chain bottlenecks, spiking inflation and millions of unfilled jobs are dragging down American businesses and hurting consumers.  Dismissing these as temporary is betting against trends that began in the first quarter of this year and have worsened.

Many U.S. businesses, both large and small, rely on parts, including microchips, as well as assembly for cars, appliances, cell phones and computers (to name a few) from overseas suppliers.  Foreign factories ship these items by planes, container ships and trucks to ports and warehouses in this country.

During the pandemic, major disruptions occurred in the supply chain as overseas factories and manufacturing plants for goods, such as clothing, textiles and furniture were shuttered.  Reopening these firms has been slower than expected while demand has skyrocketed.  

This imbalance between demand and supply is creating scarcity and driven up prices. Costs for these goods are passed on to consumers, which fuels inflation.  This supply chain turmoil is aggravated by the lack of workers in the U.S. to unload ships, stock warehouses and transport goods.

The September report highlighted this dilemma. Despite the president's upbeat economic assessment,  the economic added 194,000 jobs, 306,000 below expectations. American companies cannot find workers to fill these openings.  This labor shortage is strangling businesses' efforts to meet demand.     

At the end of June, job openings in America leaped to 10.1 million, the highest level ever recorded, according to the Department of Labor.  Job placement firm Indeed estimates there are now 10.5 million job openings, an indication scare labor is becoming a fixture of the U.S. economy.  

The mainstream media downplays the shortage as one that impacts only low-paying jobs in leisure, hospitality and restaurants exclusively.  This is untrue.  There are 1.6 million unfilled jobs in those industries, but there are also 1.5 million in the critical healthcare and social assistance segments. 

Every business has been hamstrung in hiring people, despite generous wage increases to lure workers.  Businesses in retail, wholesale trade, education, trucking and the information industry cannot find employees to fill their jobs. The trucking industry needs 68,000 drivers to fill jobs.   

Many out-of-work people have been receiving stimulus checks as well as extra federal and state unemployment benefits.  Some states are ending their programs, but continuing federal government benefits incentivize workers to remain on the sidelines, particularly impacting small firms.

A second issue is the vaccine mandate imposed by private and government entities, leading to firings and resignations. The mandate is exacerbating the critical job situation. A December 8 deadline looms for many businesses, including airlines. Already thousands of workers have been fired or resigned.

The Bureau of Labor Statistics and the Department of Labor do not track the number of jobs lost due to the vaccine mandate for political reasons.  However, the Bureau of Labor Statistics shows 10.3 million people left their jobs in September, a distressing signal for businesses.

Mr. Biden pointed out the labor shortage is boosting wages for workers.  However, wage growth in lagging behind increases in prices. Over the last 12 months, the  Consumer Price Index (CPI) has ballooned 5.4% while Americans' wages rose 4.6%.  The CPI does not include food and fuel. 

Food prices hit their highest level in a decade in September as prices surged 32.8% in the 12 months through September, according to the Food and Agricultural Organization of the United Nations.  An increase of this level has not been seen since 2011.  

The Labor Department's August inflation report, the latest one available, showed prices for meat, poultry, fish and eggs climbed 8% over last year, but that is a jump of 15.7% since August, 2019.  Beef prices have leaped 12.2% over the past  year and bacon soared 17%.  

Food is not a discretionary expenditure for consumers.  While Washington may view this as just a temporary blip, Americans are feeling the pain right now.  A rosy view of the future will not solve today's crisis, which is hardest on low-income households.

Consumers are also feeling the pinch at the gas pump. In 2019, the average price of regular gasoline was $2.25 a gallon, according to the American Automobile Association.  In some states, prices were below $2.  The average price today is $3.28 and rising.  A year ago the price was $2.18.

For perspective, the cost of filling a 15-gallon tank has spiked from $33.75 in 2019 to $49.29 today.  In a month, the average driver is paying nearly $200 for gasoline.  The Bureau of Labor Statistics calculates energy prices have soared 24.8% over the past 12 months, while gasoline jumped 42.1%.  

Crude prices are fueling the increase in the price at the pump. Prices for a barrel of crude oil passed $80 at the end of September.  Bank of America predicted a cold winter could push the price of crude to more than $100 a barrel, the highest level since 2014. 

Unfortunately, energy prices may deliver another gut-punch this winter.  Natural gas used to heat millions of American homes is ratcheting up to new highs.  Natural gas prices have risen 47% just since the beginning of August.  Demand at home and globally is outstripping supply.  

Much of America's economic pain is self-inflicted.  Continuing stimulus payments, increased unemployment benefits and child care government checks have made work look less attractive by comparison.  The government has played a large role in the labor shortage.

Fuel costs are a direct result of the administration's pledge to eliminate fossil fuel.  The government cancelled a major oil pipeline, halted drilling on government lands and all but ended fracking.  The result is less investment in domestic oil exploration and drilling and more dependence on foreign oil.

Food prices too are effected by hikes in gasoline, diesel and jet fuel which are used in the transportation of  produce and other grocery items to stores across the U.S.  Farmers are also paying more for fuel. All those costs are passed on to consumers in the form of higher prices.  

Politicians and markets are adopting a cheerful view that things will gradually return to normal as supply and demand are perfectly aligned. Early predictions were that would happen before the end of the year.  Now economists and even the administration are forecasting early next year.

Meanwhile, American consumers don't have the luxury of waiting until 2022.  They are suffering under an inflationary bomb that is destroying their purchasing power. Runaway inflation will shove the economy over the cliff, crushing growth. Ignoring the evidence is a recipe for economic disaster.  

Reopen Economy To Save American Lives

Now's the time for the American economy to be unplugged from the ventilator.  Without decisive action, the U.S. will plunge into the abyss of an economic depression that will ruin far more lives than Covid-19.  The longer the lockdown continues the country risks plummeting into financial ruin.

There are growing signs that Americans are fed up with the quarantine.  Protests are popping up in many cities.  For example, in Michigan thousand gathered to protest sweeping restrictions imposed by the governor.  Americans yearn to return to their jobs.  Politicians are starting to take notice.

A growing number of governors are contemplating reopening for business. Texas Governor Greg Abbott has announced a gradual plan to allow workers to return by Friday.  If it happens, there will be domino effect across the country.  States that remain shutdown will face criticism from voters. 

House Speaker Nancy Pelosi has raised impossible hurdles to any lifting of the lockdown.  She and other Democrats are demanding a "guarantee of a safe world" before returning to normalcy.  No doctor, scientist or politician can make such a guarantee.  The world, by nature, is not a safe place.

Governors understand better than Pelosi the inherent risks. They are staring at data that suggests an economic Armageddon will bankrupt their states. Even states whose economy was booming before the outbreak are not immune from an epic disaster for their workers.

At the current pace, COVID-19 will trigger the worst economic collapse in U.S. history.  Whole industries are on life support:  Travel, airlines, aircraft manufacturers, oil, hotels, tourist operators, cruise lines, conventions, food and beverage service and virtually every small business in America.

Small businesses under 500 workers, which employ half of the American workforce, are particularly vulnerable.  Most operate on a razor's edge between profitability and insolvency. The new Small Business Administration loan program will help cover some expenses but only about 50%.

Loans will not cover payments due suppliers, maintenance and loan repayments from previous borrowing. By some estimates, these small businesses generate 44% of the country's Gross Domestic Product, a measurement of economic output.  Many are in danger of permanent closure. 

Corporate furloughs are at historic levels.  Macy's has furloughed most of its 125,000 workers.  Boeing plans "voluntary" layoffs to slice its 160,000 workforce.  Walt Disney has furloughed 43,000 employees.  J.C. Penny is cleaving most of its 85,000 workforce. Furloughs will soon turn to layoffs.

The Department of Labor calculated a record-shattering 22 million Americans have applied for unemployment in the last four weeks.  For perspective, at the worst of the Great Depression there were 15 million unemployed.  In the 2008 financial meltdown, unemployment peaked at 9 million.

The current situation is unprecedented in American history. A stunning 13.25% of the workforce has disappeared from the rolls of the employed.  The country is losing 33,000 jobs every hour of every day right now.  Based on unofficial figures, experts estimate the current unemployment rate is 16%.

Unemployment is the tip of the iceberg.  Credit card companies and banks are holding their collective breaths in the face of a expected wave of defaults.  These institutions are extending credit for now, but at some point, borrowers will be required to repay.  Economic freefall will make it impossible.

At this juncture, household and business debt are already at historic highs.  Delinquency on student and auto loans is skyrocketing.  The spectre of a financial pandemic is real.  If you thought the last $700 billion government bailout in 2008 was unfathomable, just wait a few more months.

Economists are predicting the Gross Domestic Product will shrink by 25%-to-50% in the second quarter.  Any rebound depends on consumer spending, which represents about 68%-72% of the economy.  Bloated unemployment data offers little hope for an uptick in consumer spending.

That's causing hand wringing among states because economic decline equals less tax revenue.  An economic collapse will force steep government budget cuts. An even larger issue is state worker pension funds, estimated at $1.2 trillion in obligations.  Most state plans are underfunded now.

The American financial system is precariously nearing the precipice. Even the U.S. government cannot print enough money to paper over the looming disaster that will all but render a recovery a moot point.  These are dire times but most Americans are unaware of the scale of the consequences.

All the focus in the media has been on the toll of the virus and rightly so.  But workers have been forgotten in the stampede to staunch the virus.  No one appears concerned about what will happen to everyday, ordinary Americans.  This has been deliberate, especially by the mainstream media.

The nation is in uncharted territory.  The U.S. has never, repeat never, voluntarily shuttered business activity, even in world wars or during past pandemics.  Those experts predicting a sudden, rapid economic recovery are fool hearted.  A long, painful road awaits the economy and its workers.

No one, certainly not this journalist, is underestimating the risks of opening up America.  Precautions need to be in place: testing kits, thermometers, masks, appropriate distancing.  The timing should be dictated by scientific and economic experts, not by politically motivated guidelines in newspapers.

In states where the virus is scarcely present, people should be allowed to go back to work, open up shops and congregate in churches.  Wyoming, Alaska, Idaho, North Dakota and South Dakota come to mind. On the other hand, New York and California may need months before normalcy returns.

Some will read this and assume your writer has no empathy for the sick and dying.  Believe as you wish.  The real concern here is that by continuing a lockdown America will be forcing millions more than this virus affected to suffer lost of jobs, homes, cars, life savings, credit access and more.

Yet some politicians are huffing the country needs to remain in quarantine until a vaccine is readily available.  That could be months or even more than a year away based on the record of vaccine development for previous coronavirus contagions.  In a year, there will be no American economy.

Presidential candidate Joe Biden famously said this: "We need to accelerate the development and treatment (sic) of a vaccine.  Science takes time."  The nation does not have time to wait on the FDA and scientists to plod along using endless trials before approving any new drug or vaccine.

No one can deny there are risks to resuming commerce.  A second wave of virus cases.  A spike in hospitalizations.  Fatalities may continue.  There simply is no way to erase every risk no matter what criteria the nation uses for business resumption.  Even a zillion tests will not eliminate every risk. 

This isn't a choice between commerce and saving lives as some would construct it.  This is a choice about the best way to spare lives and prevent unparalleled economic agony.  It is not an either or proposition as politicians suggest.  Why can't we have both? We have done it before.

Of course, when the initial state resumes business the media will pounce on the first virus death that occurs.  The cry will be the governor has "blood on her (or his) hands."  This hyper partisan nation knows no shame. Ignore the politicians and media invested in promoting economic bondage. 

When this virus recedes into history, the prediction here is a day of reckoning is coming when American anger turns on politicians, especially governors and mayors who dictated arbitrary  restrictions that defied common sense.  The uproar will be thunderous and will have repercussions.

Top Ten Predictions For 2020

Futuristic predictions are notoriously goofed.  A glance in the rear view mirror of history illuminates the hazard of forecasting.  Consider in 1998 a well known futurist boldly prophesied that human life expectancy would rise to "over 100" by 2019.  He missed by a whopping 27.4 years.

In a 1994 book, a British commentator and editor foresaw the retirement age would inch up to age 70.  He was off by five years.  In the U.S. the average retirement age for men is 65 and 63 for women.  A few European countries have upped the retirement age to 67.

And there are more wrong-headed prognostications.  The International Food Policy Research Institute forecast 33 years ago that the world population would balloon to 8 billion by 2020.  Close but no cigar. The U.N. projects the world's population is 7.7 billion, a mere 300 million below the estimate.

One popular conjecture was the disappearance of paper books as consumers turned to wireless devices to devour their favorite novel.  That must be news to the U.S. book publishing industry which sold 675 million print books in 2018.  True, sales are declining, but readers aren't scrapping books.

Against this backdrop of conceited folly, your journalist once again boldy (some say egotistically) wades into the treacherous, murky waters of the future with predictions for 2020:

1.  The Dow Jones stock index soars to a record 30,000 in the first quarter before giving up ground in the third quarter to finish near 29,000 after business profits begin showing softness and global economies fail to meet market expectations. 

2.  Gross Domestic Product (GDP), a measure of U.S. economic growth, defies forecasts by averaging 2.2 percent quarterly as consumer spending continues to spur the recent boom and recession fears evaporate.  Ninety percent of world economies lag behind U.S.  

3.  China's economy struggles to reach its former robust levels as more banks fail, consumer spending weakens and an increasing number of countries balk at investment because of human rights violations.  These developments compel China to make more concessions on U.S. trade.  

4.  The housing market, after a temporary slumber, awakens as the Fed dampens rate hike jitters triggering a 5 percent uptick in single family home starts, while inventory shrinks and prices for existing homes post single-digit gains, primarily in currently hot markets.  

5.   After much speculation, China launches a digital version of its currency, the Yuan, raising pressure on the United States to enter the digital currency age to maintain the dominance of the dollar as a worldwide currency.  The Treasury Department promises to "explore" the option. 

6.  American wireless firms, after trailing China's aggressive rollout, usher in the next generation wireless technology 5G with rapid deployment in more cities, but applications are a disappointment as handset manufacturers and network connected devices are slow to market.

7.   U.S. Attorney John Durham completes his investigation into FBI abuse regarding spying on Trump campaign and the abuse of FISA warrants, leading to indictments of senior Obama era officials, including John Brennan, James Comey and Andrew McCabe.  

8.  With birth rates falling in the U.S., American colleges and universities rethink higher education and begin reaching out to more than 49 million retirees in an effort to lure them back to campus by building senior housing and other amenities to offset dwindling enrollment.

9.  Early Democratic Party presidential primaries produce no clear frontrunner. Worried about beating President Trump, former President Barack Obama endorses a new entrant into the race, however, delegates to the convention in Milwaukee ultimately decide the nominee.    

10.  Articles of impeachment remain stalled in the House of Representatives as Democrats continue to scour for new charges to levy against President Trump.  Democrats launch new probes and adopt more articles as ammunition to defeat the president in the 2020 election.     

For readers who remain skeptical about your journalist's crystal ball wizardry, five of last year's predictions were absolutely on target, including the prophecy that Speaker Nancy Pelosi would initiate hearings for Articles of Impeachment after the Mueller Report produced no wrongdoing.

Now that you have been offered a glimpse of 2020, here's hoping you have The Best New Year Ever!  

The American Job Machine Purring

Nattering nabobs of negativism cloaked in coats of doom croaked like frogs when the American jobs figures were released this month.  The economy added "only" 75,000 jobs in May, they grouched.  Ersatz economists, media carpers and political pundits forecast the demise of the economic revival.

The scale of deliberate deception would make Herr Joseph Goebbels blanch.  Despite the collaborative clamor, rumors of the death of the economic recovery are greatly exaggerated.  If you doubt it, spend a few minutes delving behind the job numbers.  No media person will do it.

As a primer, job additions are a popular test of the country's economic health published monthly by the Bureau of Labor Statistics (BLS).  It tracks the total number of people being paid for work.  Often it is misinterpreted as a measurement of how many jobs industry and government created.

With that perspective, scrutiny of the May data reveals a very different interpretation than what has been offered by the cynical skeptics.  Here is an abbreviated version of what is happening: America is running out of qualified workers for an expanding number of jobs.  

The data confirms the economy is soaking up most of the labor pool, including many who had given up looking for jobs. In the last 12 months, the number of involuntary part-time workers has declined by 565,000.  That means people who were forced to work part-time, have found full-time jobs.

Since the end of the 2016, the unemployment rolls have thinned by 1,667,000 in 17 months.  The unemployment rate at the end of May stood at 3.6 percent, the lowest in 49-years. Unemployment for minorities, African-Americans (6.2%) and Hispanics (4.2%) are at historic troughs.

Only one demographic continues to experience stubbornly high unemployment: teens aged 16-19.  Unemployment averages 12 percent.  It is no coincidence they are the least educated and most unskilled in the labor force.  Fewer job opportunities exist for this group in the new economy. 

The government calculates there were 7.4 million job openings at the end of April, the latest available data.  It marks 14 consecutive months with more job openings than unemployed people.  Further evidence that there are just not enough workers to take advantage of the sonic boom in jobs.

The Labor Participation Rate, a measurement of the people aged 16-to-64 employed or seeking work, has nudged up to 62.8 percent, compared to 62.4 percent at the end of 2016.  Robust hiring has increased the size of the American workforce by 395,000 in 17 months.

According to BLS statistics, the economy has added 5,892,000 jobs since 2016.  During the previous eight years (96 months), job growth was 10,389,000.  This is an apples-to-apples comparison because the same government data source was used to calculate both figures.

To comprehend job additions, it helps to understand the derivation of the number.  The BLS tallies total hires and subtracts the job separations, which includes layoffs, firings, retirements, and employee resignations.  Total separations have remained flat while hiring has expanded.

Prophets of doom rushed to judgment on May figures.  Logically, it is an aberration.  The average monthly measure since the first of the year has averaged 164,000 jobs.  Historically, job growth figures between 100,000 and 150,000 represent a positive trend for the economy. 

The denizens of darkness have seeded the media with propaganda that low-skilled workers have been left behind.  The New York Federal Reserve has reported that for the first time in decades, it is harder to find blue-collar workers than white-collar prospects.  Low-skilled workers are in demand.

May wages for non-supervisory workers jumped 3.4 percent.  This marks the 10th consecutive month of rising pay after a dismal stretch of eight years when wage raises never attained the three percent level.  Wages rose for workers in hotels, restaurants and retail, traditional low-paying jobs.

The chronic complainers incorrectly claim job openings are mostly low wage opportunities.  Not according to the New York Fed.  Their data validates that average starting wage for full-time employees hiked from $58,035 last November to $66,415 in March, the most recent figures.

In review, job creation is pulsing.  Unemployment is sinking.  Wages are swelling.  Labor participation is ascending.  More people are joining the workforce.  More jobs are going unfilled, because hirings are depleting the labor pool.  So what's the beef about May's one-month snapshot?

The current economic surge has proven beyond a doubt that everyone, the under employed and professionals, benefit from roaring growth.  Unlike wealth redistribution and government handouts,  economic prosperity fuels competition for employees, which advantages all American workers.

Tribute to The Passing of an Old Friend

It is with melancholy that I mark the passing of an old friend.  This companion was in my home when my children were born.  The friend clothed my family, delivered Christmas presents and even mowed my lawn.  That's why I despaired when the news broke about the demise of iconic retailer Sears.

Our relationship began when I was a child.  The arrival of the Sears Christmas Catalog in our home was met with shrieks of joy.  My siblings and I pored over the toy section, dreaming of Santa Claus and Christmas morning.  By Christmas day, the catalog was dog-eared and tattered from use.

After Princess Dianna and I were married, one of our initial purchases was a Kenmore washer and dryer.  It survived two babies in the era before disposable diapers, chugging almost nonstop to clean cloth diapers.  Those sturdy machines, like many Sears appliances, lasted 15 years.

I acquired my first lawn mower from Sears after buying my first home.  The first set of tires I purchased came from Sears.  When the battery died in my car, I made a trip to Sears for a DieHard.  The first tool box and tools I owned were Sears' Craftsman.  (I never did learn how to operate them.)

Sears products were the gold standard for reliability.  If an appliance ever stopped working, there was a local store with a repair person to fix it.  Even small towns had a Sears outlet.  At the height of its retailing empire, there were nearly 1,000 Sears stores stretching from coast to coast.

The retail Goliath was born more than a century ago when a former railway station agent (Richard Sears) and a watchmaker (Alvah Roebuck) partnered together to become Sears, Roebuck and Company. They launched a catalog of watches and jewelry in 1888 and incorporated in 1893.

From those humble beginnings, Sears branched out from watches into a full blown retail company, offering clothes, appliances and products for cars.  Its beloved catalog ballooned to 532 pages, serving as a consumer Bible.  Not to mention that it was used as toilet paper in the era of outhouses.

The firm sold stock in 1906 in the first initial public offering for an American retail firm.  The same year it opened a 40-acre logistics center in Chicago, then called the Seventh Wonder of the World by admiring business leaders.  Sears became a symbol of America's burgeoning economic strength.

As consumers tastes changed, Sears altered its business model launching its first retail stores in the 1920's.  By 1931, Sears stores surpassed the cherished catalog in sales and revenue.  Sears introduced its own brands, including Craftsman, DieHard and Kenmore and began selling Allstate insurance.

These were the glory days when Sears topped $1 billion in sales in 1945, which equates to $14 billion in today's dollars.  The company even debuted a mail-order automobile in 1952 manufactured by the Kaiser-Frazer Corporation.  It was named the Allstate.  A year later lagging sales caused its death.

By 1969, Sears claimed the title as the largest retailer in the world.  To crown its achievement, the innovative company began construction on the world's tallest skyscraper, the 110-story Sears Tower, in Chicago.  It was completed four years later, dominating the Windy City's skyline.

Like the soaring corporate building, Sears was rocketing into the retailing stratosphere.  However, its meteoric rise in the world of retail became a giant bullseye for a teeming gaggle of competitors eager to enter the lucrative sector.  Sears' leaders ignored the threat and embarked on a buying binge. 

In the 1980's, Sears expanded into everything from stocks, real estate, credit cards to a pre-Web portal known as Prodigy.  During this stage, the company lost focus on its core retailing business as an upstart competitor Walmart began to syphon customers with lower prices.

The downward spiral was officially recognized in 1991 when Walmart supplanted Sears as the nation's top selling retailer.  The final chapter was written on October 15 when Sears Holdings Corporation filed for bankruptcy.  The firm listed $6.9 billion in assets and $11.3 billion in liabilities.

Sears downfall is a cautionary tale for today's Herculean companies.  No business is too big to fail. Sears reacted too slowly to competition, lost touch with its loyal customer base, expanded into businesses far afield from its core strength and failed to invest in its retail stores and product lines.

I admit, like many former Sears customers, I haven't peeked in one of its retail stores in decades.  However, I still mourn its passing.  Sears was part of my childhood and adulthood.  Now that its gone, all that remains are cherished memories of trusted products that made our family's life better.

Rest in peace old friend.   

China: Top Threat To American Secuity

Russia, Russia, Russia. Americans have been spoon-fed a diet of news about Russian election interference, cyber attacks and military incursions. As a result of the frenzied coverage, most people are convinced Russia is the chief menace to America.  However, China stands as a far greater threat.

China's aggressive military spending, its extensive cyber spy network and its burgeoning economic dominance make the nation of 1.3 billion people a force to be reckoned with for the foreseeable future.  The Asian superpower dwarfs Russia economically, technologically and militarily.

While Russian hackers have intruded computer networks, no country has compromised U.S. government and business security to the extent of the Chinese.  Most experts agree the Chinese have stolen more secrets than Russia to the detriment of America's security and industry.

Just this year a Chinese government hacker invaded the computers of a Navy contractor, stealing massive amounts of highly sensitive data related to undersea warfare.  The theft included secret plans for the development of a supersonic anti-ship missile for deployment on Navy submarines.

Website Security Today concluded that China is the number one culprit in stealing business intellectual property of U.S. companies.  By some estimates, countries pillage almost $600 million in American intellectual property annually.  Most of that economic damage is perpetrated by China.

Four in ten cyber attacks on American government agencies, defense and high-tech companies originate or can be traced back to China.  While Russia and North Korea are also prowling cyber space, the Chinese have been the most active and most successful in hijacking America's secrets.

Economically, China ranks second only to the United States.  China's Gross Domestic Product (GDP), a measure of economic output, is $24 trillion.  However, many economic experts believe China has already surpassed America if the statistics are adjusted for purchasing power.

China's manufacturing output overtook the U.S. almost a decade ago. Its exports are more than a third-larger than America.  Since 1978 when China initiated economic reforms, the GDP has grown tenfold.  The country has a work force of 806 million people, compared to 129 million for the U.S.

China's economy is averaging almost seven percent real growth per year.  The annual growth rate from 2015 to 2017 was 6.9 percent, 6.7 percent and 6.9 percent, respectively. During the same period, U.S. growth averaged less than three percent.  Russia's economy was virtually flat by comparison.

The China boom has allowed the nation to expand its global influence by investing in virtually every country worldwide.  By CIA estimates, China had direct foreign investment of $1.34 trillion in 2017. These investments purchase political and economic influence in a host of nations.

Using its new economic wealth, China has pumped up its defense budget.  Today its military spending is almost four times larger than Russia.  The Chinese are producing more weapons, buying the latest military technology and increasing defense research and development.

Even increased military spending by America will not close the gap soon.  That's because about one-half of America's defense budget goes to military personnel.  By comparison, soldiers' pay makes up a tiny portion of the military budget for China.  The lion's share goes to purchasing new weaponry.

China already boasts a powerful military and it is expanding rapidly.  The Chinese are building more aerial combat fighters, attack submarines, destroyers and are developing a super carrier for its Navy.  According to the CIA, China ranks first worldwide in combat aircraft, battle tanks and submarines.

While Russia has interfered in Ukraine and Syria, the Chinese have been on an island-building spree in the South China Sea to spread its military footprint. China has constructed port facilities, military buildings and airstrips on the man-made islands located more than 500 miles from the mainland.

The island buildup has become a major point of contention between the U.S. and China.  The installations pose a potential threat to about $1.2 trillion in bilateral trade that flows through the South China sea. The islands also enable sustained Chinese air and sea patrols far from its border.

In addition, the Chinese are the main sponsor for the rogue regime in nuclear-armed North Korea. Without China's purchase of North Korean coal and other products, the dictatorship would collapse.  No wonder Kim Jong Un doesn't mind kissing the ring of China's benevolent leader Xi Jinping.

Russia, under Vladimir Putin,  will always be on the threat radar.  But China represents the bigger challenge because of its growing military, economic and foreign influence.  The Chinese goal is to become the world's top superpower.  If achieved, American and global security will be at risk.

Democrats: It's the Economy Stupid!

Not even one of the 236 Democrats in the House and Senate voted to cut taxes in last year's legislative showdown. Hardheaded Democrats believe their stonewalling will be rewarded at the polls in the mid-term elections.  Apparently, they have forgotten the mantra of Bill Clinton.

During his first presidential run, Mr. Clinton was reminded daily by his handlers that voters really cared most about the economy.  It didn't mean Americans weren't concerned about other issues.  But they voted with their wallets.  Thus the theme "It's About the Economy Stupid!" was born.

Judging from their trashing of the Tax Cut and Jobs Act of 2017, Democrats apparently are living in some alternative universe where voters are more worried about deficits, Obamacare, gun laws, opioids or unisex bathrooms.  They have seriously miscalculated.  And Democrats will pay for it.

Recent polling by the Gallup organization lists economic problems as the single most important issue by a wide margin. Yet Democrats are betting voters will believe their fatigued narrative that only the rich will benefit. They think Americans are too dumb to notice the increase in their paychecks. 

Democrats are employing their dogeared political playbook, advocating for the issues of healthcare, the environment, gun control, race relations and LGBT rights.  They are out of touch with most Americans.  The Gallup Poll of Americans nationwide illustrates their folly.

Only eight percent of Americans think race relations is the most important issue.  Five percent mention healthcare, three percent the environment, one percent gun control and one percent gay rights.  By comparison, 17 percent of people surveyed tick the economy as the top issue.

The party's position on tax cuts has undergone a radical metamorphosis over the last 50+ years.  Once Democrats were at the forefront of the tax reform effort.  For instance, President John Kennedy championed one of the largest tax cuts in history which became law in 1964.

Under GOP President Richard Nixon, Democrats Ted Kennedy and Walter Mondale led the effort to slice taxes in 1974.  More than 20 years later in 1997, a reluctant President Clinton signed a tax cut bill that was shepherded through Congress by Republicans.

Despite Mr. Clinton's disappointment, 201 Democrats in the House and Senate joined Republicans in approving the measure, known officially as the Balanced Budget Act of 1997.  Earlier in his eight-year term, Mr. Clinton had spearheaded a legislative effort to hike taxes.

Even in 2003 when President Bush campaigned for a tax cut package, nine Democrats signed on to the legislation. Democrats' support for tax breaks has now dwindled to zero.  Virtually every Democrat who has campaigned for office in the last eight years has supported raising taxes.

Democrats are under the illusion that Americans will overlook last year's vote on tax cuts when the mid-term elections roll around in November.  It is a risky proposition for a party that will be defending 23 seats in the Senate, plus two held by independents who caucus with Democrats.

In comparison, Republicans will have eight Senate seats on the ballot. All 435 seats in the House will be up for grabs.  If past elections are any guide to the future, Americans are normally reluctant to change parties when the economy is good.  And right now America is experiencing a boon.

About 1.7 million jobs have been added since Mr. Trump became president.  Unemployment has fallen to its lowest rate in 17 years.  The unemployment rate for African-Americans, which zoomed as high as 16.8 percent under Mr. Obama, has dipped to 6.8 percent, the lowest since 1972.

The Gross Domestic Product (GDP) has topped three percent in the last two quarters.  During Mr. Obama's tenure, the GDP never reached three percent, widely regarded as the number indicating healthy economic growth.

The stock market is rocketing into new territory, setting record closes 17 times last year.  (Remember when Democrats credited Mr. Obama for stock market gains during his tenure?)  Since January of last year more than $5 trillion in wealth has been added to the U.S. economy. 

Peevish Democrats ignore the economic news at their own peril.  Their answer is to point to polls that show Mr. Trump's popularity ratings are in the dumpster.  Popularity contests are for chumps.  The most accurate polls are overwhelmingly in Mr. Trump's favor.

Consumer confidence soared to a 17-year high in November.  Similar indices for small and big businesses confidence are rising.  Consumer and business confidence are a more accurate measure of the mood of the country than polls about personality popularity. This isn't high school.

This year's election likely will be a referendum on the economy. If it is, Democrats will rue the day they voted against tax cuts designed to lift the economy and create jobs.  With their ballots, Americans will remind Democrats that it is still about the economy STUPID.

Media Collaborators Flunk Economics

President Obama and his cadre of ideological clones have been doing somersaults, celebrating the government numbers on unemployment and economic growth.  The cheerleaders in the media have linked hands with the administration, performing journalistic handstands to mark the turnaround.

The coordinated attempt to brainwash voters in the final days of the presidential election is without precedent because it involves collusion with supposedly non-partisan government agencies. Skepticism about the federal data has been met with stinging administration rebukes.

Yet heading into October, most financial experts agreed the economy was comatose.  Leading indicators showed only a weak economic pulse. Then two government agencies released data on unemployment and expansion of the Gross Domestic Product (GDP) that raised eyebrows.

The opening propaganda volley was fired by the Bureau of Labor Statistics, which reported the nation's unemployment rate inexplicably nosedived to 7.8 percent in September.  The turnabout occurred after 43 consecutive months of unemployment rates above eight percent. 

According to the statisticians, the economy added a staggering 873,000 jobs in a single month, following three months of stagnation. The jump was the nation's largest gain in workers in 29 years, despite little change in economic activity.  

Retired General Electric CEO Jack Welch was the first to challenge the data.  The president's Propaganda Minister Jay Carney and the media sheep tried to silence the former executive by ridiculing him for daring to suggest the numbers were cooked.

Welch had good reason to be skeptical.  The data appears at odds with reality.  The nation's plodding economic expansion does not explain the extraordinary job gains.

The bureau's glowing job numbers were based on in-person and telephone interviews of 60,000 households conducted by the U.S. Census Bureau.  Households are selected in each state by the census organization to represent the entire country.  Each sample includes 75 percent of the same households that participated in the previous month's survey.

Surveys are notoriously flawed.  They depend entirely on the honesty of respondents and the accuracy of the interviewer in recording answers. In the aftermath of the unemployment drop, critics expressed concerns about the methodology.

They had grounds to question the veracity.
 
As part of each monthly report, government statisticians at the bureau also examine the actual payrolls of 141,000 businesses.  In September, the inspection found 114,000 jobs were added.  That is a discrepancy of more than 600,000 jobs between the payroll data and the household interviews.

No plausible explanation has been forthcoming from the media or the government statisticians.  It is further evidence that the media has abdicated its role as government watchdog to avoid spoiling the president's reelection chances.  The media and the administration had one more trick up their sleeves.

Last week the Commerce Department issued an "estimate" showing growth of 2.0 percent in the third quarter for the GDP, a measurement of the goods and services produced by the nation's economy. The Obama Administration backflipped and the media cartwheeled.

The improvement surprised the nation's top economists.  In a survey of 48 financial experts, their consensus was the economy would grow by 1.8 percent, according to the USA Today.  For the second quarter, the GDP growth had been an unimpressive 1.3 percent.

There was a a little noticed nugget buried in the commerce report. Most of the growth could be attributed to federal government spending, which rose 9.6 percent in the third quarter after tumbling 0.2 percent in the second quarter.  Surely that wasn't a coincidence.    

In addition, not a single media outlet called attention to the cautionary language contained in the department's report, which emphasized the third quarter figures were an "advance estimate based on source data that are incomplete or subject to further revision."

Isn't it convenient, too, that revised figures with more complete data will not be released until November 29, some 23 days after the election?     

Yet Americans are supposed to trust the media when it claims the data from the Bureau of Labor Statistics and the Commerce Department are beyond rapprochement.  Really?   Government data is constantly being updated to correct figures already in the public domain.

As a recent example, the press breathlessly proclaimed that jobless claims fell to 342,000 for the week ended October 13, marking the lowest number since February of 2008.  Long after the news grabbed headlines, the Labor Department quietly corrected the figure by raising it to 388,000.    

A democracy demands a vigilant and impartial media.  The United States has neither.

Propaganda Masks Economic Stench

For months, the Obama Administration and their cronies in big media have been churning out statistics to convince Americans the economy has healed itself.  Unemployment is improving.  Jobs are growing.  The private sector is enjoying an economic renaissance.  Never has their been a propaganda campaign to match this.

When the facts don't support a rosy economic picture, the slavish media buries the news.  As evidence, the National Journal recently researched national news coverage of unemployment and discovered that mentions of the the issue have dwindled by more than half since August, 2010.

However, not even the lapdog media could hide May's government report that showed unemployment ticked up to 8.2 percent, marking 40 consecutive months that the nation's jobless rate has exceeded eight percent. That triggered a swift shift in the Obama Administration's narrative.

The White House now shies away from any talk of country's economic condition because the coverage makes the White House seem impotent to do anything about the tepid recovery.  The new Obama strategy is to blame Europe's crippling debt and George Bush's economic missteps for the malaise.

With the strategy shift, the media has gotten new marching orders from the Obama campaign.  Now the media is trying to convince people of the absurd notion that headlines may be bad, but the economy is good.  Americans aren't buying it.  The most recent Consumer Confidence Index found only 16.6 percent believe business conditions will improve over the next six months.

There are good reasons for consumer pessimism.  Here are three measurements of economic activity which indicate the current economic sickness will linger:

According to the latest figures, American corporations are sitting on nearly $2 trillion in cash.  Instead of investing that money, companies are hoarding it.  In economic good times, firms shovel money into research, development, new factories and hiring. Businesses simply see no reason to invest when there are so many unknowns about taxes and the costs associated with Obama Care. The overhang created by this uncertainty has made American firms adverse to taking risks with their money.

The country's labor participation rate is at an all-time low.  Not many in the media follow this metric contained in the Bureau of Labor's Statistics  monthly employment report.  The labor force participation rate is the percentage of working-age persons who are employed or looking for a job.  At the end of May, the country's labor participation rate was near a historic low of 63.8 percent, a precipitous drop from 65.8 percent at the end of President Bush's term.  The Obama apologists have tried to argue that the the reason for the decline is the aging of the population.  However, the facts say otherwise.  The Bureau of Labor Statistics shows the labor participation rates of those over the age of 55 are soaring.  There are fewer people participating in the economy because there are fewer jobs.  The Obama economic plan has produced a "jobless recovery."

Consumer spending on discretionary goods and services has plummeted.  Consumer purchases account for 70 percent of the country's economic activity.  When consumers spend less, the economy suffers.  In the latest Gallup survey, the average consumer spent $58 per day on non-essential items, such as clothes, dining and soft drinks.  When George Bush left office in January 2008, the average was $97 a day.  This drop of 40 percent has dealt a crippling blow to the economy.  While consumers are spending less on clothes and eating out, they are shelling out more for fuel and health care. Gallup attributes the decline to several factors, including "economic uncertainty." Consumers are fearful because they have watched their home values sink and their stock savings plunge.  The prospect of higher taxes has an added a chilling impact on spending.

Instead of waging a propaganda war, President Obama could awaken the lethargic American economy by ordering the repeal of his health plan, making permanent all the Bush tax cuts and overhauling corporate taxes.  Overnight, these moves would unleash a torrent of economic activity.

Sadly, Obama prefers to point his finger at Europe and George Bush rather than exercise leadership this economic crisis demands.  The president has done nothing to jumpstart America's growth engine. Even the sycophant media can no longer camouflage Obama's abject failure on the economy.

Letters From O.H. Bama

Dear Speaker John Boehner:

In your new job as corral boss of those gun toting, bible thumping, tea-bagging Republicans, I have noticed a tone in your rhetoric that suggests you are not on board with my plea for harmony, peace and jasmine-scented discourse.

Every time I read my trusted source for balanced news, The New York Times, I notice comments from you and your foul-mouthed GOP cohorts about the economy, calling the current recovery "rotten", "bogus", "nonexistent" and "a figment of the president's imagination."

Those are hate-filled words my friend. When you criticize the economy, you are chastising those swooning Americans who elected me. You are poking a stick in the eyes of every man, woman, underage child and corpse who has ever voted Democratic. Let me just be clear about this. I want you to stop all use of negative adjectives when referring to me, the economy, Obama Care or any other issue. Remember, if you even waffle a little on this, the media that worships me will fry you on the altar of journalistic partisanship.

This could be our shining moment, Mr. Speaker. We could join hands and praise the economic recovery that donkey-brained Joe Biden loves to tout. To steer you toward more congenial speech, here are some potential areas of economic agreement between us that would demonstrate our man-love and bipartisanship:

1. We both want more jobs that pay good money. We should support jury duty as a way for Americans to have a high-paying job while performing a civic duty. Jury pools could be filled by all those out of work mid-level managers.

2. We could agree that cutting government travel expenses is necessary. For example, when Secretary of State Hillary Clinton goes abroad she could actually share a room with her husband, Bill. This has the added advantage of supporting non-traditional marriages.

3. We could ask the advertising industry to begin a public service campaign in Africa to sponsor an American child. This idea comes straight from that Hollywood icon, Angelina Jolie, who recently adopted two Californians. It's time we took better care of our American children.

4. We could reach out to polygamists and encourage them to reduce their number of wives from an average of five to four. This would engage ordinary Americans in reducing their tax deductions so they could pay more money to Washington to fund my agenda. It would also address the over population problem.

5. We could advertise the job explosion in Mexico, particularly in the employment of gang members. Given our leaky border, we would just let our home-grown gang members sneak their tattooed bodies into Mexico under the cover of darkness, thus reducing future prison expenses in the U.S.

6. We could ask Google to lay off one-half of their work force, thus trimming the number of my administration's staff in Washington. Not only would this save taxpayer dollars, but it could allow Google to spend more time looking into the private information of Americans.

Listen, John, we both have a stake in this country. Mine is just bigger than yours. And I'm not bragging here.

After reading my letter, you may want to reach for that box of tissue. There's a lot of weeping going around in Washington these days, especially among out of work Democrats. I know Nancy Pelosi was moved to tears when you snatched that speaker's gavel out of her wrinkled, liver-spotted hand.

If we tone down the rhetoric and work together, the country will be more united. Americans will feel better about Washington. Heck, some may even want to voluntarily give back their Bush-era tax cuts.

Please think about what I've said, John. After all, words matter, except when they escape from my mouth.

Tulips, tranquility and teleprompters,

O.H. Bama

Banking Bubble About To Burst

While the nation still struggles with the economic fallout from the housing carnage, a potentially more lethal explosion is bubbling just beneath the surface in the banking industry. Yet nothing is being done by the Obama Administration to address the issue.

Many small to medium-sized banks, the bedrock of thousands of communities throughout the country, are facing increasingly tough times. Slumping housing prices, rising foreclosures, high unemployment and commercial real estate loan defaults are eating into bank reserves and drying up loan demand.

The Federal Deposit Insurance Corporation (FDIC) has closed the doors of 129 banks this year. Nearly all have been small and medium-sized banks. At this time last year, bank failures had reached 98. For all of last year, the FDIC shuttered 140 banks, the most since the Great Depression. This year's total will easily eclipse that number, based on the current rate of failures.

For these community banks, the news may get even worse soon. Here's why: When the government coughed up $700 billion of taxpayer money to bailout the financial industry, a total of 707 banks received funds, including many small and medium-sized banks. Today many of those banks are struggling to repay the government, putting more pressure on their balance sheets and reducing their financial flexibility.

To date, a total of 80 banks have repaid the government in full. The amount comes to $140 billion, about 75 percent of the total Troubled Asset Relief Program (TARP) money lent to the banks. The remaining 627 banks owe $65 billion. That doesn't sound like a lot of money, when compared to the billions repaid by the likes of Bank of America and Goldman Sachs. However, for small and medium-sized banks the debt is weighing down their long-term prospects for recovery.

Banks were expected to repay most of the funds by 2011. The chances look grim for the remaining 627 financial institutions. As a result, most analysts predict that the banks will be forced to raise capital or sell out to the highest bidder. Raising capital for a weak bank in this economy is like trying to find an Obama supporter at a Tea Party Rally. Won't happen. That leaves the second option. There are some regional banks still circling like vultures, snapping up failed banks. However, there aren't many attractive banks left for the picking, even at today's distressed prices.

Many of the TARP banks are paying dividends to the government today as part of the repayment plan. However, those dividend payments will rise from five percent to nine percent on the fifth anniversary of the TARP loan in 2013. If banks are having a hard time making dividend payments today, any increase in the amount will drive the institutions closer to the financial cliff. A Congressional Oversight Panel recently came to the same conclusion.

In its report, the panel criticized the Treasury Department and warned that many of the banks that have not yet repaid their TARP funds could face rising challenges to meet obligations in the coming years. When dividend rates increase in three years for the TARP repayments, there will be almost no chance for the banks to pony up the money, the panel predicted.

Officials at many of the weakened banks are tap dancing with regulators to try to work out a repayment plan that will allow them to keep their doors open. However, the regulators, while sympathetic, have not budged. Further delays in payments and dividends could have dire consequences for the banks on the TARP repayment list.

That is only the beginning of the banks' problems. All financial institutions are dealing with stronger capital requirements forced on them by the Dodd-Frank Act passed this year with the support of the Obama Administration. These new requirements will only hinder the banks' efforts to try to renegotiate repayment schedules.

This is not a pretty picture for the community banking industry. While the Obama Administration has shored up the financial balance sheets for the banking Goliaths, the smaller Davids are suffering. Ultimately, the inability of many small and medium-sized banks to repay TARP funds will led to record numbers of failures and send a shock wave through communities stretching across the nation.

How long will the Treasury Department and President Obama dither before the issue is addressed?

Foreclosure Aid: Another Government Boondoggle

The Obama Administration's efforts to solve the housing foreclosure problem by throwing billions of dollars at it has been exposed as an unqualified flop. However, it took Wall Street analysts to force the government to admit the $50 billion Home Affordable Modification Program (HAMP) has failed to achieve its objectives.

In reviewing statistics released by the Treasury Department, some smart money folks noticed the numbers were out of whack with rising foreclosure rates. They asked Treasury to audit its numbers. Treasury passed the buck to Fannie Mae. The statistics were revised, which is government speak for, "We were caught red-handed with bogus data."

The new data released by Treasury raised eyebrows from Wall Street to Main Street. Here are just a few nuggets from the "revised" statistics about the HAMP program, which began in March, 2009:

1. More than 40 percent or about 1.3 million borrowers who started in the program have dropped out. Less than 30 percent have received permanent new terms on their loans.

2. Dropout rates among borrowers are increasing. About 91,000 borrowers dropped out in June, nearly twice the pace of those getting a permanent modification in their mortgage terms.

3. Borrowers with modified mortgages are defaulting on their liens at nearly twice the rate as it was originally reported by Treasury. For example, those borrowers who had their permanent modifications at least nine months defaulted at six times the rate the original numbers showed.

4. For loans permanently modified for at least nine months, 19.6 of those loans are now at least two months behind on their payments. On loans modified for at least half a year, 10.1 percent of homeowners are 60 days or more behind on payments.

These numbers come as no surprise. The government is bailing out people who should have never bought a home in the first place because they did not qualify. Does anyone expect that in today's lousy economy these same people will somehow find the new terms easier to meet?

Even these dismal figures are suspect. Consider that Realty/Trac, an independent research and tracking firm, says that lenders repossessed 92,858 homes in July, the second-highest monthly total ever recorded. Bank repossessions rose six percent from a year ago, when the housing market was in worse shape than today.

An objective review of the situation should convince Washington bureaucrats to quit throwing more money at the problem. That's what is wrong with rational thinking in today's environment dominated by an out-of-control Democrat-led spending spree that is creating a staggering mountain of debt.

The Obama Administration announced this week it would add another $3 billion in foreclosure aid to bailout homeowners. This is throwing good money after bad and expecting a different outcome.

But that's not the most insidious aspect of this new effort. Instead of spreading the money to homeowners across the country, the government in its wisdom decided to spend $2 billion in only 17 states and the District of Columbia. Those states, with two exceptions, are states that voted Democratic in the past election. Coincidence? Not in this administration.

Here's a prediction: when this newest effort fails, as it surely will, the Obama Administration will dump billions of additional dollars into already bankrupt Fannie Mae and Freddie Mac to permanently bailout irresponsible home borrowers. They will be given some sort of mortgage "amnesty" to allow them to live "free" in their homes just in time for the November mid-term elections.

Remember where you heard it first.

Vodoo Economics

Of all the ludicrous claims voiced by Democrats, the latest boast about jobless payments stimulating the economy merits special recognition for its utter lack of intellectual honesty.

When legislation to extend unemployment benefits reached a stalemate in Congress last week, the Democrats went on the offensive. They painted Republicans as a party that cares not a wit for the downtrodden because the GOP was insisting on budget cuts to pay for the extension. President Obama weighed in, calling the GOP tactics shameful. That gained sufficient traction in the media to compel a few cowardly Republicans to end their attempts to block passage of the measure.

Once the bill was signed into law, Democrats began crowing about how the measure was really about "economic stimulus". House Speaker Nancy Pelosi, only two heartbeats removed from the Presidency, used those exact words in defending the billions added to the federal deficit as a result of the legislation. Ohio Democrat Sherrod Brown chimed in, calling the extension "the smart thing to do for our economy".

The logic behind such assertions rests on thin ice. Under the Democrats' reasoning, once employment benefits are restored, these out-of-work citizens will become consumers again. Their spending will pump more money into the Obama Recession Economy. Only an economic illiterate would believe such a flimsy hoax. Democrats obviously think most Americans are Dumb and Dumber.

First of all, the benefits fall far short of what most people need just to meet their monthly rent. Jobless payments will average $309 a week for the nearly five million people whose 26 weeks of benefits had expired. Imagine all the consumption and economic pump priming that kind of money will buy. After paying for rent, utilities and food, there can't be much left over on an income of $1,235 a month. Therefore, it is sheer folly to suggest that the benefits will somehow lift the country out of the recession.

Secondly, economists have pointed out that the total benefits to be paid out represent less than one-quarter of one percent of the economy. In other words, its impact can hardly even be measured, much less felt. Yet according to Democrats, the billions of dollars paid in benefits is the smartest thing to do for our sickly economy. Really? If that's true, the Democrats' actions are a sad admission that they have no idea how to rebuild America's economic engine.

Thirdly, every dollar paid in jobless benefits is one dollar less that another American has in his pocket. The government took the money from taxpayers to give to the unemployed. When one taxpayer has less money and another gains income at that person's expense, then the net-net economic impact is zilch. Only an economic moron would claim that the economy was boosted by a transference of wealth.

Furthermore, one could argue that the taxpayer would have spent the $309 on discretionary goods and services that actually would benefit the economy, instead of using it for the essentials. This is not to suggest that the unemployed should be stripped of benefits. But it illustrates how it is an egregious lie to argue that giving taxpayer handouts to the jobless actually boosts the economy.

Of course, no one in the media ever points out any of this. Instead, they repeat the words uttered by Democrat politicians without a ounce of fact checking.

Speaker Pelosi and her minions have done nothing to create more employment opportunities for out-of-work Americans who are forced to accept government largess. The sad fact is Democrats and President Obama don't understand government's role in putting more people back to work.

If the Democrats really wanted to help the jobless, they would reduce taxes on every business, create incentives for corporate investment, open the credit spigot for small firms and reduce regulations across the board. Instead, they are patting themselves on the back for extending jobless payments.

That should give every American pause to consider whether the current Washington crowd should be entrusted with reviving the moribund economy.

Obama Loses Touch With Economic Reality

While President Obama preaches the need for more economic stimulus, his counterparts in Europe are in full retreat from this failed policy. Germany, the United Kingdom and France have made cutting bloated government deficits their top priority to address economic recovery. National leaders in these countries have done a turnabout in facing economic reality. Yet Obama continues to cling to the notion that government spending is the best way to elevate the country out of the recession.

The stark contrast between competing policies was on full display when Obama urged the G20 nations at the recent economic summit to continue government pump priming. His words were greeted with icy silence. His audience included most of the European economic powers who are suffering from years of social spending that has saddled their countries with deficits as far as the eye can see.

Leaders in France and Germany joined together in calling for tougher European Union rules to prevent further economic chaos fueled by deficit spending. France went one step further, signaling that it may consider amending its constitution to make budget discipline a mandate for future French governments. That is unprecedented for a country that has prided itself in building generous social programs.

Not to be outdone, the UK government has ordered budget cuts of as much as 40 percent in some departments in order to slash a deficit running 11 percent of the country's economic output. The proposed spending reductions would be the deepest since World War II. Projections are that 610,000 government jobs will be lopped off.

Surveying the European economic landscape, the EU's central Bank President Jean-Claude Trichet said that government austerity drives aimed at deficit reductions will stimulate economic recovery. He added that "structural reforms" were fundamental to the growth potential for Europe.

These sobering economic maneuvers have been lost on President Obama. In a signature move for his administration, the President has treated the issue of runaway deficits as something of an academic exercise. His lone action has been to form a panel to study the problem and make recommendations. In a nod to politics, he ordered the panel to present its findings after the November elections.

Yet the United States actually faces a more acute deficit crisis than most of its European neighbors. The nation's deficit currently represents 11 percent of its total annual economic output, the same as the United Kingdom. Germany and France both have deficits that are smaller, as measured as a percentage of economic output. Even debt-saddled Greece comes in at 8.7 percent, according to figures from the International Monetary Fund and the Organization for Economic Cooperation and Development.

Meanwhile, the President and his party continue to ignore warnings about deficit spending. In a show of political arrogance, last week the house Democrats used procedural trickery to pass a non-existent $1.12 trillion budget deal. Instead of calling for a vote on a congressional budget resolution, Democrats attached a document to an emergency war supplement bill in deeming approval of the new budget. News coverage of the event was virtually non-existent.

Facing a record deficit and a tidal wave of debt, Obama's minions are taking the low road. The nation's total debt now stands at a staggering $13 trillion and counting. Budget deficits are growing at the fastest clip since World War II as the administration continues to refuse to accept responsibility for its reckless spending. In case you haven't heard, it's all former President Bush's fault.

Now some economists are talking about the dreaded "double dip" impact on the American recovery. The term suggests that there is a risk of dipping back into a recession after the economy had begun to claw its way back. This has prompted calls by some in Congress for the Son of Stimulus. This assumption underscores the absurdity of the administration and its supporters in the economic community.

The truth is the economy remains in a recession. It has never left this territory. Any cursory examination of economic numbers shows nothing much has changed in bank failures, housing foreclosures and unemployment since the recession began. In fact, in many ways, things have gotten worse.

Failure to recognize this truth imperils the country's future. More government spending will not cure America's economic ills. Fiscal responsibility is the only way for the nation to rise above its current economic malaise and to put it on the long path back to stability.

Don't take my word for it. Just ask Europe's leading economic powers.

What Happens in Greece, Won't Stay in Greece

When the financial meltdown blistered Greece, the European Union stepped into the breech with an emergency plan designed to confine the damage. The EU's governing body ponied up a staggering $1 trillion rescue package to stabilize the region. In the aftermath of the bailout, there is fresh evidence the financial contagion will likely spread, despite efforts to stem the economic virus.

Among the most foreboding of signs is what happened in Greece after the EU announced its plan. Government and union workers took to the streets, condemning the austerity measures demanded by the EU in exchange for the rescue. The scenes made for ugly television images broadcast around the globe. It also underscored how difficult it will be for elected officials to take away benefits from voters. Decades of irresponsible spending and spiraling budget deficits are to blame. The protests are just a symptom of why Greece is in such dire straits.

Greeks have gotten use to a pliant government that provides generous pension benefits, cradle-to-grave health care and bloated welfare programs. But while criticism of Greece mounted, some observers began to realize that most of Europe is saddled with the same social model that is crimping Greece's treasury. Greece just happens to be the first to be exposed because its financial house was in worse shape than its European neighbors.

However, it is only a matter of time before Spain and Portugal come to the EU trough. Next up might be Ireland. Lurking somewhere in the shadows is the United Kingdom, which is suffering from years of Labor Party rule that has enhanced social welfare programs, leading to record debt levels. Already, the UK deficit is approaching that of Greece at almost 12 percent of the country's economic output. With a coalition government now ruling the UK, significant reductions in spending will be next to impossible. Few coalition politicians, already on shaky footing in the power-sharing arrangement, have an appetite for the kind of austerity measures needed. Expect higher taxes and precious little budget cutting. If a crisis strikes the UK, as it surely will, no country is safe on the continent.

Despite a united facade, EU partners are facing an angry public. In Germany, where the government forked over billions to save Greece, the public is growing restless. A mass circulation German newspaper recently ran a front page headline that screamed, "We are Europe's fools again!" A leading newspaper in France minced few words when it declared, "The emergency plan will bring down the fever but won't cure the patient." Ordinary people are waking up to the fact that the Greek bailout has weakened their own country's finances, imperiling their own social programs.

Most Americans are not paying any attention to Greece. They should. California Governor Arnold Schwarzenegger recently compared his state's $19.1 budget shortfall to the unfolding crisis in Greece. California is a poster child for what happens when governments refuse to cut budgets, choosing instead to use the state treasury as a political slush fund to keep public workers and their unions happy. State legislators are loathe to adopt austere measures even in the face of financial collapse. As evidence, last year when California was on the ropes, irresponsible legislators chose to issue IOU's to creditors to close a $60 billion budget gap instead of trimming budgets to reduce the deficit.

While California tops the list of egregious spenders, New York is not far behind. Both are experiencing the double whammy of declining tax revenues and increased entitlement spending. Unless the economy miraculously recovers soon, expect the two states to wind up in Washington, pleading for bailouts from the federal government. The only question is one of timing. Does it happen before or after November's elections?

Not far behind in the race to financial turmoil is the United States. The country's federal deficit as a percentage of Gross Domestic Product (GDP) was 9.9 percent in 2009. It is now approaching the double-digit levels of Greece. Yet there have been few alarm bells sounded by those in charge at the national level. For his part, President Obama has appointed a blue-ribbon panel to study the problem and report back after the November elections. Meanwhile, the deficit grows at a staggering rate.

But the deficit numbers tell only part of the story. A better measure is total indebtedness, which never receives much media attention. The country's total debt is now 92.1 percent of its GDP. Think about that. The money the country owes to its creditors is nearly equal to the nation's total annual economic output. That's scary.

If that still leaves you unworried, then consider this: Germany, France, China, India, Canada and even the United Kingdom have lower total debt percentages than the United States. Greece weighs in a 124.3 percent and Italy is close behind at 115.5 percent. Japan tops the list. Its debt stands at 222 percent of its economic output. Those numbers should frighten every American, especially the fifty-percent of people who pay taxes.

Given the current cast in Washington, no one can realistically expect any meaningful cuts in the federal budget, particularly entitlement programs. Taxes are already on the drawing board as a remedy. The problem is increasing taxes will tank spending and harm the fragile economy. That will lead to declining tax revenues. Unless spending is reduced, total indebtedness will continue to soar.

That's why it is so important for policy makers to learn from Greece's mistakes, which have been repeated throughout Europe. Unless elected officials tackle the deficits immediately, the United States is assuredly on the road to becoming not just another Greece, but a financially wounded country with no union ready with a handout.