U6 may sound like the name of a World War II German submarine, but it holds the key to unlocking the real unemployment figures in the United States. Yet the mainstream media omits the U6 number when it reports jobless rates because it does not fit the narrative of an improving economy.
By way of explanation, U6 refers to one of several formulae the Bureau of Labor Statistics uses to calculate the nation's unemployment rate. Under the Obama Administration, the bureau has camouflaged the U6 measurement in a stack of statistics, hoping it will be overlooked.
Under the U6 calculation, the country's unemployment rate for December stood at 15.2 percent. This measurement includes not only Americans unable to find work, but those who have given up seeking employment as well as people who want full-time positions but have settled for part-time jobs.
When President Obama assumed office in 2008, the U6 jobless rate was 8.8 percent. It reached its zenith in October of 2009 when it soared to 17.4 percent, a level not seen since the Great Depression. However, most media outlets either buried the number or never reported it at the time.
Instead, the media and the Bureau of Labor Statistics tout what is known as the U3 unemployment rate. This formula considers only unemployed Americans actively seeking work. Those people with no job, but not looking for employment, are not counted.
In many cases, these workers have given up because they believe their search for employment would be futile. They have cause for pessimism. According to the latest government figures, there are more than 4.5 unemployed people for every job created by the economy.
Using the "official" U3 measurement, the current unemployment rate is 8.5 percent. That is a far cry from the real number of 15.2 percent. But it shores up the media's argument on the president's behalf that the economy is trending in the right direction.
However, this ignores the fact that even under the "official" measurement there are still 23.7 million Americans out of work. Since December of 2007, the U.S. economy has shed 6 million jobs. Last year the country added 1.6 million jobs. At that growth rate, economic prosperity will remain elusive for years.
Finagling the unemployment rate isn't the only fraud the media has perpetrated. News outlets also have taken to trumpeting private-sector hiring numbers. However, the media conveniently fails to mention that most new jobs being added are "low wage" positions, according to the Labor Bureau.
In recent months, the media has latched on to declining jobless claims to buttress the notion of economic recovery. Each month's tally is breathlessly recited. However, news outlets fail to report that seasonal hiring has been mostly responsible for the improvement.
In other cases, the media is indifferent to upward revisions in economic numbers. For instance, the November jobless rate of 8.6 percent recently was revised to 8.7 percent but the change escaped media attention until the more favorable December figures were issued this month. Coincidence?
None of this should surprise astute observers. Big media is heavily invested in President Obama's reelection. They will go to any length to secure a second term for the president, even if it means torpedoing the "real" unemployment numbers.
Friday, January 6, 2012
Sunday, January 1, 2012
Top Ten Predictions For 2012
If you thought 2011 was a bad year, just wait until you learn what's just around the corner in 2012. From the world economy to international politics, all signs point to a new year shaken by one crisis after another. Better chew a bottle of Maalox before you read any further.
Crystal ball gazing has never been easy, but 2012 presents a Herculean challenge for prognosticators. Turmoil has roiled financial markets, governments, trade and foreign policy, making predicting the future is as difficult as trying to nail Jello to a wall.
Despite the formidable challenge, here are the Top Ten Predictions for 2012:
1. Rosy forecasts for economic recovery in the U.S. fail to materialize as GDP growth barely inches above 2 percent after finishing below that level in 2011. Consumer spending, the backbone of the economy, suffers as layoffs, falling house prices and anemic wage growth scuttle the economy.
2. The European Union teeters on the brink of a currency crisis as burgeoning sovereign debt compels some member nations to consider pulling out of the euro-zone. Economic growth in the EU stumbles to a minuscule one percent as financial shock waves jolt the continent.
3. Housing prices continue their downward spiral while annual sales barely eclipse 2010's low water mark of 4.91 million. Foreclosures jump in the first half of the year as mortgage firms clean up the mess of paperwork stalled by government investigations.
4. North Korea's new leader, anxious to flex his power, provokes a confrontation with neighboring South Korea, which escalates into a massing of troops in the DMZ between the two countries. After the dust-up, the military quietly begins looking for an opportunity to dump the new dictator.
5. Gasoline prices in the United States leap past $5 a gallon as Iran begins meddling in the affairs of Iraq, destabilizing the Mideast. As a result of Iranian coaxing, sectarian violence flares up, leading to the fall of the current government.
6. In spite of a sour economy, cosmetic surgery procedures experience record growth in the United States. The nip-and-tuck industry's revenues lift past the $15 billion mark in 2012 as aging boomers with discretionary income face their golden years with a new look.
7. Russian premier Putin, nervously watching growing unrest at home, secretly concocts a scheme to spark a domestic terrorist attack aimed at shifting voters' focus on homeland security. Rattled by the crisis, Russians return Putin to the nation's presidency.
8. Real unemployment remains near 16 percent in the U.S., but the Bureau of Labor Statistics issues a report in the third quarter pegging the jobless rate at 8.4 percent in a desperate attempt to show the economic policies of the president are succeeding.
9. A weak political organization and voter fatigue sink the presidential candidacy of Newt Gingrich, leaving Mitt Romney as the presumptive GOP nominee heading into summer's Super Tuesday primaries. However, he fares poorly in the southern state primaries, which raises the specter of an "open" GOP convention.
10. After a sometimes raucous convention spiced with talk of a Romney challenge, the former Massachusetts governor finally secures the GOP nomination. He goes on to capture the nation's highest office with 53 percent of the popular vote to President Obama's 46 percent.
Some may complain about the dollop of gloom and doom saturating this year's predictions. Get over it. The world is a scary place with more uncertainty and disruptive forces than at any time in recent memory. There are good reasons for pessimism.
If it's any consolation, the prediction here is that the Mayans are dead wrong about the world ending in 2012. At least, we think so.
Crystal ball gazing has never been easy, but 2012 presents a Herculean challenge for prognosticators. Turmoil has roiled financial markets, governments, trade and foreign policy, making predicting the future is as difficult as trying to nail Jello to a wall.
Despite the formidable challenge, here are the Top Ten Predictions for 2012:
1. Rosy forecasts for economic recovery in the U.S. fail to materialize as GDP growth barely inches above 2 percent after finishing below that level in 2011. Consumer spending, the backbone of the economy, suffers as layoffs, falling house prices and anemic wage growth scuttle the economy.
2. The European Union teeters on the brink of a currency crisis as burgeoning sovereign debt compels some member nations to consider pulling out of the euro-zone. Economic growth in the EU stumbles to a minuscule one percent as financial shock waves jolt the continent.
3. Housing prices continue their downward spiral while annual sales barely eclipse 2010's low water mark of 4.91 million. Foreclosures jump in the first half of the year as mortgage firms clean up the mess of paperwork stalled by government investigations.
4. North Korea's new leader, anxious to flex his power, provokes a confrontation with neighboring South Korea, which escalates into a massing of troops in the DMZ between the two countries. After the dust-up, the military quietly begins looking for an opportunity to dump the new dictator.
5. Gasoline prices in the United States leap past $5 a gallon as Iran begins meddling in the affairs of Iraq, destabilizing the Mideast. As a result of Iranian coaxing, sectarian violence flares up, leading to the fall of the current government.
6. In spite of a sour economy, cosmetic surgery procedures experience record growth in the United States. The nip-and-tuck industry's revenues lift past the $15 billion mark in 2012 as aging boomers with discretionary income face their golden years with a new look.
7. Russian premier Putin, nervously watching growing unrest at home, secretly concocts a scheme to spark a domestic terrorist attack aimed at shifting voters' focus on homeland security. Rattled by the crisis, Russians return Putin to the nation's presidency.
8. Real unemployment remains near 16 percent in the U.S., but the Bureau of Labor Statistics issues a report in the third quarter pegging the jobless rate at 8.4 percent in a desperate attempt to show the economic policies of the president are succeeding.
9. A weak political organization and voter fatigue sink the presidential candidacy of Newt Gingrich, leaving Mitt Romney as the presumptive GOP nominee heading into summer's Super Tuesday primaries. However, he fares poorly in the southern state primaries, which raises the specter of an "open" GOP convention.
10. After a sometimes raucous convention spiced with talk of a Romney challenge, the former Massachusetts governor finally secures the GOP nomination. He goes on to capture the nation's highest office with 53 percent of the popular vote to President Obama's 46 percent.
Some may complain about the dollop of gloom and doom saturating this year's predictions. Get over it. The world is a scary place with more uncertainty and disruptive forces than at any time in recent memory. There are good reasons for pessimism.
If it's any consolation, the prediction here is that the Mayans are dead wrong about the world ending in 2012. At least, we think so.
Sunday, December 18, 2011
Fed Study Blames Flippers For Housing Mess
A non-partisan study commissioned by the New York Federal Reserve Bank sheds new light on the home mortgage catastrophe that cratered the economy and spawned a government bailout of the banking industry.
Although the study has attracted scant media attention, the blockbuster report casts serious doubt on conventional wisdom about the cause of the housing market collapse.
Until the Fed released its data December 5, it was widely acknowledged both in the media and in Washington that Wall Street's shenanigans were largely responsible for the worst financial crisis in 80 years. While bankers are certainly not blameless, the report fingers housing speculators as the chief culprit.
The exhaustive study ordered by the New York Fed is entitled, "Flip This House: Investor Speculation and the Housing Bubble." Using unique data, the authors of the report found that speculators played a "previously unrecognized, but very important role" in the destruction of the housing market.
In analyzing volumes of data, the report documented how investors helped push up real estate prices during the period from 2004 through 2006. When prices plummeted in 2006, millions of mortgage holders defaulted, contributing to the steep downward trend in prices and property values.
Real estate speculation is not a new phenomenon. However, the difference this time was that policies in Washington encouraged lax lending standards that fueled the growth of sub-prime mortgages. This enabled even credit-challenged borrowers to load up on risky debt.
The report spells out how speculators acquired properties with little or no down payment with the purpose of selling quickly to reap a capital gain. This practice, called "flipping," was aided and abetted by mortgage companies that parcelled out loans without traditional due diligence.
These unscrupulous speculators began acquiring multiple homes in a mad race to maximize their profits. The New York Fed's study shows that 35 percent of borrowers who purchased new homes in 2006 owned two or more properties.
In the four states with the worst default rates, speculation was rampant. The Fed data reveals that 45 percent of borrowers who purchased homes in Arizona, California, Florida and Nevada in 2007 owned two or more homes.
Looking back decades, the study found that the share of housing sales by multiple property owners has never been as high as it was during the period from 2006 to 2007. This helps explain why defaults soared when borrowers saddled with expensive debt were unable to quickly unload their homes.
This speculative buying spree also contributed heavily to spiraling housing prices by reducing the available inventory of properties. In addition, excessive borrowing helped drive up interest rates for all prospective home buyers, including those with no interest in flipping their investment.
While some have conceded speculation contributed to the housing mess, it was seen as only a minor cause. Wall Street shouldered most of the blame because it repackaged the mortgages and sold the assets to investors. However, if the underlying mortgages had been solid, there would have been no housing crisis and no need for a bailout.
That fact has been lost on the Obama Administration and the media. They prefer to lay the blame at the feet of Wall Street because it plays better with voters, while turning a blind eye to the role of greedy individual investors who gamed the system.
That's the reason the mainstream media has ignored the New York Fed study. The findings get in the way of the media's narrative to make Wall Street the scapegoat for wrecking the economy.
Although the study has attracted scant media attention, the blockbuster report casts serious doubt on conventional wisdom about the cause of the housing market collapse.
Until the Fed released its data December 5, it was widely acknowledged both in the media and in Washington that Wall Street's shenanigans were largely responsible for the worst financial crisis in 80 years. While bankers are certainly not blameless, the report fingers housing speculators as the chief culprit.
The exhaustive study ordered by the New York Fed is entitled, "Flip This House: Investor Speculation and the Housing Bubble." Using unique data, the authors of the report found that speculators played a "previously unrecognized, but very important role" in the destruction of the housing market.
In analyzing volumes of data, the report documented how investors helped push up real estate prices during the period from 2004 through 2006. When prices plummeted in 2006, millions of mortgage holders defaulted, contributing to the steep downward trend in prices and property values.
Real estate speculation is not a new phenomenon. However, the difference this time was that policies in Washington encouraged lax lending standards that fueled the growth of sub-prime mortgages. This enabled even credit-challenged borrowers to load up on risky debt.
The report spells out how speculators acquired properties with little or no down payment with the purpose of selling quickly to reap a capital gain. This practice, called "flipping," was aided and abetted by mortgage companies that parcelled out loans without traditional due diligence.
These unscrupulous speculators began acquiring multiple homes in a mad race to maximize their profits. The New York Fed's study shows that 35 percent of borrowers who purchased new homes in 2006 owned two or more properties.
In the four states with the worst default rates, speculation was rampant. The Fed data reveals that 45 percent of borrowers who purchased homes in Arizona, California, Florida and Nevada in 2007 owned two or more homes.
Looking back decades, the study found that the share of housing sales by multiple property owners has never been as high as it was during the period from 2006 to 2007. This helps explain why defaults soared when borrowers saddled with expensive debt were unable to quickly unload their homes.
This speculative buying spree also contributed heavily to spiraling housing prices by reducing the available inventory of properties. In addition, excessive borrowing helped drive up interest rates for all prospective home buyers, including those with no interest in flipping their investment.
While some have conceded speculation contributed to the housing mess, it was seen as only a minor cause. Wall Street shouldered most of the blame because it repackaged the mortgages and sold the assets to investors. However, if the underlying mortgages had been solid, there would have been no housing crisis and no need for a bailout.
That fact has been lost on the Obama Administration and the media. They prefer to lay the blame at the feet of Wall Street because it plays better with voters, while turning a blind eye to the role of greedy individual investors who gamed the system.
That's the reason the mainstream media has ignored the New York Fed study. The findings get in the way of the media's narrative to make Wall Street the scapegoat for wrecking the economy.
Monday, December 12, 2011
Biden Stricken With Hoof-and-Mouth Disease
Vice President Joe Biden, whose feet are permanently implanted in his mouth, recently unleashed a crass accusation that even the normally supportive Washington Post felt compelled to label "absurd." Of course, absurdity is Biden's middle name so his utterances only polish his reputation as a buffoon.
Speaking to a group of union thugs, Big Mouth Joe railed against Republican opposition to the president's misnamed American Jobs Act. The vice president claimed the bill's defeat has led to police layoffs and as a result "murder rates are up, robberies are up, rapes are up."
What really ticked off the vice president was that local and state governments are slicing jobs as tax receipts have declined because of the economy. In deciphering the cutbacks, Biden equated fewer police with higher crime. As usual, his assessment was more hot air than cold hard facts.
According to the Department of Justice, violent crime is down 47 percent since 1992. Property crime has tumbled 75 percent. These reductions have been achieved despite the fact that the ranks of police officers have been thinned.
To hear Biden tell it, you would also think police departments have been stripped bare. Actually, police forces have lost less than one percent of their manpower since 2000. The tiny decline follows steady growth in police officers which included a nine percent increase in a single year (2000).
Biden gets piqued over any suggestion of cutbacks in state and local government workers, most of whom are represented by Democrat Party lapdog unions. Yet taxpayers in states and local municipalities are having to bankroll ever expanding government payrolls.
In 2010, states and local governments employed an astonishing 16.6 million full-time and 4.8 million part-time workers. That eclipses the payrolls of all the Fortune 500 companies combined. These numbers are courtesy of U.S. Census Bureau's Annual Survey of Public Employment and Payroll.
Despite Biden's assertion about reductions in the size of government, his facts are only half-right. Twenty-two states and the District of Columbia have more state and local government jobs today than they did when the recession began.
For example, growth continues unabated in Wyoming, where the rolls of government workers have surged 14.75 percent since 2007. The District of Columbia increased its government jobs by 6.66 percent during the same period. Texas cranked up government employment by 4.37 percent.
While the nation's economy has wallowed in the depths of economic doldrums, states and local municipalities have been flush with cash from the federal government. Federal aid to state and local governments totalled nearly $700 billion in 2010.
This flow of big bucks from taxpayers has allowed states and local governments to keep adding employees even in the face of private sector downsizing. Since 1960, federal subsidies to state and local governments have risen a mind-numbing 1,173 percent.
All that money has led to an unhealthy dependency on the federal government, which helps insulate states and cities from economic downturns and falling tax receipts. It also removes any incentive to trim payrolls when federal taxpayers pick up the tab.
In addition, the gusher of tax dollars has encouraged a proliferation of local governments, including cities, townships, counties, special districts and school districts. The end result is more government than citizens can afford.
Figures from the Census Bureau document there are now 90,740 state and local government entities in the United States. Local governments employ 12.2 million people. The majority work in education, hospitals and police departments.
Paying for all those government employees means increased taxes and fees. But that doesn't faze Vice President Biden. He is already on record as favoring higher taxes to pay for even bigger government.
Poor Joe. The vice president doesn't understand taxpayers want less government and more truth. If only he could keep his feet in his shoes instead of his mouth.
Speaking to a group of union thugs, Big Mouth Joe railed against Republican opposition to the president's misnamed American Jobs Act. The vice president claimed the bill's defeat has led to police layoffs and as a result "murder rates are up, robberies are up, rapes are up."
What really ticked off the vice president was that local and state governments are slicing jobs as tax receipts have declined because of the economy. In deciphering the cutbacks, Biden equated fewer police with higher crime. As usual, his assessment was more hot air than cold hard facts.
According to the Department of Justice, violent crime is down 47 percent since 1992. Property crime has tumbled 75 percent. These reductions have been achieved despite the fact that the ranks of police officers have been thinned.
To hear Biden tell it, you would also think police departments have been stripped bare. Actually, police forces have lost less than one percent of their manpower since 2000. The tiny decline follows steady growth in police officers which included a nine percent increase in a single year (2000).
Biden gets piqued over any suggestion of cutbacks in state and local government workers, most of whom are represented by Democrat Party lapdog unions. Yet taxpayers in states and local municipalities are having to bankroll ever expanding government payrolls.
In 2010, states and local governments employed an astonishing 16.6 million full-time and 4.8 million part-time workers. That eclipses the payrolls of all the Fortune 500 companies combined. These numbers are courtesy of U.S. Census Bureau's Annual Survey of Public Employment and Payroll.
Despite Biden's assertion about reductions in the size of government, his facts are only half-right. Twenty-two states and the District of Columbia have more state and local government jobs today than they did when the recession began.
For example, growth continues unabated in Wyoming, where the rolls of government workers have surged 14.75 percent since 2007. The District of Columbia increased its government jobs by 6.66 percent during the same period. Texas cranked up government employment by 4.37 percent.
While the nation's economy has wallowed in the depths of economic doldrums, states and local municipalities have been flush with cash from the federal government. Federal aid to state and local governments totalled nearly $700 billion in 2010.
This flow of big bucks from taxpayers has allowed states and local governments to keep adding employees even in the face of private sector downsizing. Since 1960, federal subsidies to state and local governments have risen a mind-numbing 1,173 percent.
All that money has led to an unhealthy dependency on the federal government, which helps insulate states and cities from economic downturns and falling tax receipts. It also removes any incentive to trim payrolls when federal taxpayers pick up the tab.
In addition, the gusher of tax dollars has encouraged a proliferation of local governments, including cities, townships, counties, special districts and school districts. The end result is more government than citizens can afford.
Figures from the Census Bureau document there are now 90,740 state and local government entities in the United States. Local governments employ 12.2 million people. The majority work in education, hospitals and police departments.
Paying for all those government employees means increased taxes and fees. But that doesn't faze Vice President Biden. He is already on record as favoring higher taxes to pay for even bigger government.
Poor Joe. The vice president doesn't understand taxpayers want less government and more truth. If only he could keep his feet in his shoes instead of his mouth.
Monday, December 5, 2011
Washington Whine Leads To Drunken Spending
Liberals' favorite whine, harvested from the vineyard of intentional deceit, goes like this: attempts to rein in the federal budget will harm the poor, seniors and children. They view any reduction in spending as anathema because they believe the government should solve all the nation's ills.
Yet there exists a mountain of evidence that the bloated federal budget could be reduced by billions of dollars with virtually no impact on sacrosanct social programs. Waste, fraud, duplication, swollen government payrolls and pork barrel projects are bleeding taxpayers and draining the budget.
No one in Congress or the executive branch can claim ignorance. The independent Government Accountability Office (GAO) has been sounding the alarm bells for years. Their warnings have fallen on deaf ears as Congress has ignored the calls for reform while shoveling more money into flawed programs.
In fact, the government watchdog agency is now required under a new statute to identify duplication in federal programs, agencies, offices and initiatives. Its first annual report issued in March, the GAO found 34 major examples of overlapping services provided by various agencies.
In one case, the GAO discovered that the federal government administers 47 different employment and job training programs at an annual cost to taxpayers of about $18 billion. Despite the duplication and inefficiency, Congress unflinchingly continues to stuff money into every one of the programs.
Eliminating overlapping services represents a major opportunity for slicing the federal budget, but there are a whole litany of other financial sins the government commits annually. Here are just a few areas where the feds are bungling away billions of taxpayer dollars.
1. The Washington bureaucracy is replete with examples of waste. For instance, the Internal Revenue Service flushes billions down the toilet every year. A recent audit by the Treasury Department's Inspector General showed that the IRS made payments of $4.2 billion last year to illegal aliens who paid no federal income taxes. Unfortunately, this is not an isolated case. The IRS also delivered $112 million in refunds to prisoners who filed fraudulent returns. By its own estimate, the IRS has admitted it wastes about $10 billion a year. The IRS is not the only violator. Every year the GAO issues reports exposing bureaucratic waste in a myriad of federal programs.
2. In a country founded on limited government, the federal bureaucracy is the largest employer in the United States. The fed payroll includes more than 2.1 million civilians, which excludes the Post Office. The executive branch of the government, which consists of the office of the president, 15 cabinet departments and 70 independent agencies, accounts for 97 percent of all federal civilian workers. In addition, there are 945 federal advisory committees and commissions stretching across 52 government agencies, employing thousands of people. The feds have continued to fatten payrolls while most Americans businesses downsize. Since 2007, the executive branch has grown 14.8 percent while 6.5 million private sector jobs have disappeared during that timeframe.
3. Pork Barrel Projects are rampant, despite repeated promises to eliminate funding for programs designed to ingratiate lawmakers to their constituents. In fiscal 2010, the Citizens Against Government Waste organization identified 9,129 pork projects that cost taxpayers $16.5 billion. Examples include such doozies as handing out $615,000 so the University of California at Santa Cruz could digitize memorabilia from rock band Grateful Dead and supplying $443,340 to the National Institute of Health for a study of the habits of male prostitutes in Vietnam.
4. Fraud permeates every government agency, sapping taxpayer funds and adding to costs. Over the last decade, entitlement programs have been a favorite target, including these examples from past years: Medicare's overpayments to providers once totaled $12.1 billion. The Food Stamp Program was bilked out of $1.3 billion. The Department of Housing and Urban Development forked over $3.3 billion in payments as a result of fraud and errors. The Department of Agriculture recently was unable to account for $5 billion in receipts and expenditures. Read enough? The bureaucracy is simply too big to manage and there are no incentives to reduce fraud when taxpayer funding allows the government to act irresponsibly without penalty.
Weary taxpayers have every right to demand that Washington clean up this mess before asking for one penny more in taxes from its citizens. Not only do the feds need to end waste, duplication, fraud and pork barrel spending, but the enormous size of government must be addressed.
As President Reagan once famously observed, a government agency "is the closest thing to eternal life we will ever see on earth." A nation saddled with $15 trillion in debt can no longer afford to stand by and watch its government grow fatter and more wasteful.
Taxpayers are finally sobering up after suffering the hangover effects of the liberals favorite whine. They don't want more binge spending.
Yet there exists a mountain of evidence that the bloated federal budget could be reduced by billions of dollars with virtually no impact on sacrosanct social programs. Waste, fraud, duplication, swollen government payrolls and pork barrel projects are bleeding taxpayers and draining the budget.
No one in Congress or the executive branch can claim ignorance. The independent Government Accountability Office (GAO) has been sounding the alarm bells for years. Their warnings have fallen on deaf ears as Congress has ignored the calls for reform while shoveling more money into flawed programs.
In fact, the government watchdog agency is now required under a new statute to identify duplication in federal programs, agencies, offices and initiatives. Its first annual report issued in March, the GAO found 34 major examples of overlapping services provided by various agencies.
In one case, the GAO discovered that the federal government administers 47 different employment and job training programs at an annual cost to taxpayers of about $18 billion. Despite the duplication and inefficiency, Congress unflinchingly continues to stuff money into every one of the programs.
Eliminating overlapping services represents a major opportunity for slicing the federal budget, but there are a whole litany of other financial sins the government commits annually. Here are just a few areas where the feds are bungling away billions of taxpayer dollars.
1. The Washington bureaucracy is replete with examples of waste. For instance, the Internal Revenue Service flushes billions down the toilet every year. A recent audit by the Treasury Department's Inspector General showed that the IRS made payments of $4.2 billion last year to illegal aliens who paid no federal income taxes. Unfortunately, this is not an isolated case. The IRS also delivered $112 million in refunds to prisoners who filed fraudulent returns. By its own estimate, the IRS has admitted it wastes about $10 billion a year. The IRS is not the only violator. Every year the GAO issues reports exposing bureaucratic waste in a myriad of federal programs.
2. In a country founded on limited government, the federal bureaucracy is the largest employer in the United States. The fed payroll includes more than 2.1 million civilians, which excludes the Post Office. The executive branch of the government, which consists of the office of the president, 15 cabinet departments and 70 independent agencies, accounts for 97 percent of all federal civilian workers. In addition, there are 945 federal advisory committees and commissions stretching across 52 government agencies, employing thousands of people. The feds have continued to fatten payrolls while most Americans businesses downsize. Since 2007, the executive branch has grown 14.8 percent while 6.5 million private sector jobs have disappeared during that timeframe.
3. Pork Barrel Projects are rampant, despite repeated promises to eliminate funding for programs designed to ingratiate lawmakers to their constituents. In fiscal 2010, the Citizens Against Government Waste organization identified 9,129 pork projects that cost taxpayers $16.5 billion. Examples include such doozies as handing out $615,000 so the University of California at Santa Cruz could digitize memorabilia from rock band Grateful Dead and supplying $443,340 to the National Institute of Health for a study of the habits of male prostitutes in Vietnam.
4. Fraud permeates every government agency, sapping taxpayer funds and adding to costs. Over the last decade, entitlement programs have been a favorite target, including these examples from past years: Medicare's overpayments to providers once totaled $12.1 billion. The Food Stamp Program was bilked out of $1.3 billion. The Department of Housing and Urban Development forked over $3.3 billion in payments as a result of fraud and errors. The Department of Agriculture recently was unable to account for $5 billion in receipts and expenditures. Read enough? The bureaucracy is simply too big to manage and there are no incentives to reduce fraud when taxpayer funding allows the government to act irresponsibly without penalty.
Weary taxpayers have every right to demand that Washington clean up this mess before asking for one penny more in taxes from its citizens. Not only do the feds need to end waste, duplication, fraud and pork barrel spending, but the enormous size of government must be addressed.
As President Reagan once famously observed, a government agency "is the closest thing to eternal life we will ever see on earth." A nation saddled with $15 trillion in debt can no longer afford to stand by and watch its government grow fatter and more wasteful.
Taxpayers are finally sobering up after suffering the hangover effects of the liberals favorite whine. They don't want more binge spending.
Tuesday, November 29, 2011
The Untimely Death of the Personal Computer
As the venerable personal computer turns 30 years old, it may seem heretical to predict its demise. However, the PC appears headed for an early grave as demand for mobility and portable information is pushing consumers toward new high-tech devices.
No less authority than Mark Dean has predicted the personal computer will go the way of the "vacuum tube, typewriter, vinyl records, CRT and incandescent light bulbs." Dean's words carry added weight because he once held the title of chief technology officer at computing Goliath IBM.
Market trends support Dean's prediction. Sales of personal computers have slowed dramatically in the past 18 months, while demand for tablets and smartphones has exceeded forecasts. Mounting evidence suggests that tablets, in particular, are being snapped up as replacements for personal computers.
The news could not come at a worst time for the computer industry. PC shipments declined 6.6 percent in the fourth quarter of last year. In the most recent quarter, shipments rose only 3.2 percent, significantly below historical averages. Analysts had forecast sales growth this year of 13.6 percent.
Despite the modest quarterly gain, consumer appetite for personal computers in the United States, Canada and Europe has waned. The computer industry was able to eke out a sales increase, thanks to growing demand in emerging markets, such as China, India and Turkey.
Even with a three-decade head start, personal computer firms are in danger of being swamped by a tsunami of competition. Data indicates that for the first time in history more smartphones have shipped this year than personal computers.
Smartphone sales reached 115 million in the third quarter, a 42 percent increase from the same period a year ago. Worldwide sales of smartphones are predicted to top 468 million this year, according to Gartner, a tech research firm. By comparison, Gartner forecasts 352 million PC's will be sold in 2011.
If smartphone sales are sizzling, then tablets are on fire. Apple, the market leader with its iPad, expects to sell 40 million tablets this year. The year over year growth is north of 342 percent. iPads are selling at a rate of 1.22 every second of every day. Data shows consumers are junking their notebook computers in favor of iPads.
The Apple juggernaut has captured 61 percent of the tablet market in spite of fierce competition. In its most recent quarter, iPad sales topped $6 billion. The tablet has become the top selling consumer electronics device ever in a little over 18 months.
While tablets are cannibalizing consumer PC sales, smartphones are invading the personal computer's business turf. More smartphones are being linked to enterprise applications once reserved for PC's. Medical centers, universities, small businesses and even auto companies are swapping smartphones for PC's.
Worst of all, most of the largest computer makers have no PC alternatives. None offer smartphones or tablets, except HP. The firm purchased Palm in April of last year, but has stumbled in the market. HP introduced a flashy tablet earlier this year then quickly withdrew it because of moribund sales.
What's behind the rapid ascent of smartphones and tablets? There are two chief reasons for the growth: technology advancements are leveling the playing field between smartphones, tablets and PC's; and, users are demanding anywhere-anytime access to personal and public data and information.
Today's smartphones have more computing power than the average PC's of just a decade or more ago. Most smartphones have storage capacity of 16 to 64 gigabytes. A desktop computer in 1998 typically could store up to two gigabytes. The computer of that era had 64 megabits of memory, compared to more than 256 megabits of random access memory for today's smartphones.
The other disruptive trend for the computer industry is the demand for portable information. Consumers no longer want to be shackled to a single computer to access their videos, photos, email, documents and music. They want to get data and information whenever and wherever they happen to be.
While PC's are busy fending off smartphones and tablets, another competitor has emerged. Smart televisions are entering the marketplace. The new sets have built-in Internet connectivity, offer games, high-tech applications and a myriad of features that mimic those available on personal computers.
Despite all the competition, PC's will not disappear overnight. Increasing sales in foreign markets will continue to prop up the industry. However, in time death will come slowly but surely for the PC.
For a 30 year old, that's a foreboding prospect.
No less authority than Mark Dean has predicted the personal computer will go the way of the "vacuum tube, typewriter, vinyl records, CRT and incandescent light bulbs." Dean's words carry added weight because he once held the title of chief technology officer at computing Goliath IBM.
Market trends support Dean's prediction. Sales of personal computers have slowed dramatically in the past 18 months, while demand for tablets and smartphones has exceeded forecasts. Mounting evidence suggests that tablets, in particular, are being snapped up as replacements for personal computers.
The news could not come at a worst time for the computer industry. PC shipments declined 6.6 percent in the fourth quarter of last year. In the most recent quarter, shipments rose only 3.2 percent, significantly below historical averages. Analysts had forecast sales growth this year of 13.6 percent.
Despite the modest quarterly gain, consumer appetite for personal computers in the United States, Canada and Europe has waned. The computer industry was able to eke out a sales increase, thanks to growing demand in emerging markets, such as China, India and Turkey.
Even with a three-decade head start, personal computer firms are in danger of being swamped by a tsunami of competition. Data indicates that for the first time in history more smartphones have shipped this year than personal computers.
Smartphone sales reached 115 million in the third quarter, a 42 percent increase from the same period a year ago. Worldwide sales of smartphones are predicted to top 468 million this year, according to Gartner, a tech research firm. By comparison, Gartner forecasts 352 million PC's will be sold in 2011.
If smartphone sales are sizzling, then tablets are on fire. Apple, the market leader with its iPad, expects to sell 40 million tablets this year. The year over year growth is north of 342 percent. iPads are selling at a rate of 1.22 every second of every day. Data shows consumers are junking their notebook computers in favor of iPads.
The Apple juggernaut has captured 61 percent of the tablet market in spite of fierce competition. In its most recent quarter, iPad sales topped $6 billion. The tablet has become the top selling consumer electronics device ever in a little over 18 months.
While tablets are cannibalizing consumer PC sales, smartphones are invading the personal computer's business turf. More smartphones are being linked to enterprise applications once reserved for PC's. Medical centers, universities, small businesses and even auto companies are swapping smartphones for PC's.
Worst of all, most of the largest computer makers have no PC alternatives. None offer smartphones or tablets, except HP. The firm purchased Palm in April of last year, but has stumbled in the market. HP introduced a flashy tablet earlier this year then quickly withdrew it because of moribund sales.
What's behind the rapid ascent of smartphones and tablets? There are two chief reasons for the growth: technology advancements are leveling the playing field between smartphones, tablets and PC's; and, users are demanding anywhere-anytime access to personal and public data and information.
Today's smartphones have more computing power than the average PC's of just a decade or more ago. Most smartphones have storage capacity of 16 to 64 gigabytes. A desktop computer in 1998 typically could store up to two gigabytes. The computer of that era had 64 megabits of memory, compared to more than 256 megabits of random access memory for today's smartphones.
The other disruptive trend for the computer industry is the demand for portable information. Consumers no longer want to be shackled to a single computer to access their videos, photos, email, documents and music. They want to get data and information whenever and wherever they happen to be.
While PC's are busy fending off smartphones and tablets, another competitor has emerged. Smart televisions are entering the marketplace. The new sets have built-in Internet connectivity, offer games, high-tech applications and a myriad of features that mimic those available on personal computers.
Despite all the competition, PC's will not disappear overnight. Increasing sales in foreign markets will continue to prop up the industry. However, in time death will come slowly but surely for the PC.
For a 30 year old, that's a foreboding prospect.
Saturday, November 19, 2011
News Media Exposes Its Unseemly Underbelly
Media ethics are an oxymoron in an era when news outlets thrive on assassinating the reputations of public figures with unproven allegations while sacrificing what few principles they profess on the altar of shameless exploitation.
Two recent high-profile cases underscore this sleazy brand of journalism. The pillorying of presidential candidate Herman Cain and the savaging of college football coach Joe Paterno are recent examples of how the media has abandoned all pretense of fairness and objectivity in reporting.
Once standards dictated that journalists wait for law enforcement officials to file charges before reporting on allegations, heresy or gossip. But in the race for ratings, media organizations now turn to sensationalism, shock and sex to pander to their audience's worst prurient interests.
Before taking up the Cain and Paterno cases, a caveat is in order. What follows is NOT a defense of either man, but an indictment of the reporters and editors who have allowed their own bias and views to trample journalistic professionalism.
Weeks ago unfounded allegations surfaced regarding Cain's alleged sexual harassment of women. The media smelled blood when Cain stumbled in his initial denials. That was all the license they needed to air innuendo and salacious statements from alleged and often anonymous victims.
After some crawfishing Cain did admit that a sexual harassment settlement was made without his knowledge by his former employer. That became a lightning rod for the media, which treated the legal deal as an admission of guilt.
News coverage of the Cain allegations stands in sharp contrast to similar sexual harassment charges against President Clinton. In 1999, Clinton quietly reached an out-of-court settlement in the sexual harassment case filed by Paula Jones after his repeated claims of innocence.
The legal maneuver came on the heels of a federal district judge's criticism of Clinton for "willful failure" to obey her repeated orders to testify truthfully in the lawsuit lodged by Ms. Jones. The judged fined Clinton for his conduct. News of the settlement was either buried or not mentioned.
Judging from the news treatment of the allegations against Cain, there can be no question of the media's double standard. It also begs the question: If Clinton was fit to remain as president despite a sexual harassment settlement, why should a similar legal agreement disqualify Cain from that office?
While Cain continues to soldier on in the presidential race, Penn State's Joe Paterno has been forced out by the board of trustees after 46 years as head football coach. The action follows a grand jury investigation of former assistant coach Jerry Sandusky, who has been charged with 40 counts of sexual abuse of children.
Once the scandal broke, several top Penn State officials, including the athletic director, stepped down. Immediately the news media, including influential sports media giant ESPN, demanded Paterno's resignation, even though prosecutors had indicated the coach would not be charged with a crime.
Among the few facts released by the prosecutors was a report that once Paterno was made aware of the allegation, the head coach advised the athletic director as required. In a later statement, Paterno publicly admitted remorse for not doing more to investigate the allegation.
That admission didn't satisfy the media's unquenchable thirst to humiliate Paterno. The media's suffocating coverage bullied the university's trustees into a hastily called meeting that ended with Paterno's firing, depriving the coach of an opportunity to gracefully step down days before it was revealed he had lung cancer.
One only has to remember the Duke lacrosse case as a cautionary tale of media justice. To refresh your memory, three members of the Duke lacrosse team were charged in 2006 with raping a woman at a party. Because of the university's pristine reputation, the media enthusiastically reported the allegations and battered Duke's reputation as if it was a piñata.
After more than a year of unrelenting coverage, the charges were proven false and the unscrupulous prosecutor in the case was disbarred. Unfortunately, the facts surfaced after the Lacrosse coach had been fired, player reputations were ruined and the team's season cancelled by the university president.
Paterno and Cain may indeed be guilty of crimes. If so, they deserve our scorn. But until they are charged in a court of law and a jury finds them guilty, they remain innocent. The heinous nature of the allegations do not justify the media's rush to judgment.
Fairness and objectivity may seem like quaint values to today's journalists, but they are standards worth upholding. Media consumers should demand nothing less.
Two recent high-profile cases underscore this sleazy brand of journalism. The pillorying of presidential candidate Herman Cain and the savaging of college football coach Joe Paterno are recent examples of how the media has abandoned all pretense of fairness and objectivity in reporting.
Once standards dictated that journalists wait for law enforcement officials to file charges before reporting on allegations, heresy or gossip. But in the race for ratings, media organizations now turn to sensationalism, shock and sex to pander to their audience's worst prurient interests.
Before taking up the Cain and Paterno cases, a caveat is in order. What follows is NOT a defense of either man, but an indictment of the reporters and editors who have allowed their own bias and views to trample journalistic professionalism.
Weeks ago unfounded allegations surfaced regarding Cain's alleged sexual harassment of women. The media smelled blood when Cain stumbled in his initial denials. That was all the license they needed to air innuendo and salacious statements from alleged and often anonymous victims.
After some crawfishing Cain did admit that a sexual harassment settlement was made without his knowledge by his former employer. That became a lightning rod for the media, which treated the legal deal as an admission of guilt.
News coverage of the Cain allegations stands in sharp contrast to similar sexual harassment charges against President Clinton. In 1999, Clinton quietly reached an out-of-court settlement in the sexual harassment case filed by Paula Jones after his repeated claims of innocence.
The legal maneuver came on the heels of a federal district judge's criticism of Clinton for "willful failure" to obey her repeated orders to testify truthfully in the lawsuit lodged by Ms. Jones. The judged fined Clinton for his conduct. News of the settlement was either buried or not mentioned.
Judging from the news treatment of the allegations against Cain, there can be no question of the media's double standard. It also begs the question: If Clinton was fit to remain as president despite a sexual harassment settlement, why should a similar legal agreement disqualify Cain from that office?
While Cain continues to soldier on in the presidential race, Penn State's Joe Paterno has been forced out by the board of trustees after 46 years as head football coach. The action follows a grand jury investigation of former assistant coach Jerry Sandusky, who has been charged with 40 counts of sexual abuse of children.
Once the scandal broke, several top Penn State officials, including the athletic director, stepped down. Immediately the news media, including influential sports media giant ESPN, demanded Paterno's resignation, even though prosecutors had indicated the coach would not be charged with a crime.
Among the few facts released by the prosecutors was a report that once Paterno was made aware of the allegation, the head coach advised the athletic director as required. In a later statement, Paterno publicly admitted remorse for not doing more to investigate the allegation.
That admission didn't satisfy the media's unquenchable thirst to humiliate Paterno. The media's suffocating coverage bullied the university's trustees into a hastily called meeting that ended with Paterno's firing, depriving the coach of an opportunity to gracefully step down days before it was revealed he had lung cancer.
One only has to remember the Duke lacrosse case as a cautionary tale of media justice. To refresh your memory, three members of the Duke lacrosse team were charged in 2006 with raping a woman at a party. Because of the university's pristine reputation, the media enthusiastically reported the allegations and battered Duke's reputation as if it was a piñata.
After more than a year of unrelenting coverage, the charges were proven false and the unscrupulous prosecutor in the case was disbarred. Unfortunately, the facts surfaced after the Lacrosse coach had been fired, player reputations were ruined and the team's season cancelled by the university president.
Paterno and Cain may indeed be guilty of crimes. If so, they deserve our scorn. But until they are charged in a court of law and a jury finds them guilty, they remain innocent. The heinous nature of the allegations do not justify the media's rush to judgment.
Fairness and objectivity may seem like quaint values to today's journalists, but they are standards worth upholding. Media consumers should demand nothing less.
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