Ideal Taxes Association

Raymond Richman       -       Jesse Richman       -       Howard Richman

 Richmans' Trade and Taxes Blog

More Than a Million Workers Lost Their Jobs Since Obama's Re-Election. Recession Is in Prospect
Raymond Richman, 2/7/2013

Over one and a quarter million workers have lost their jobs since Pres. Barack Hussein Obama won re-election. In the five weeks before the election, the average number of initial claims filed for unemployment insurance amounted to 347,918 per week but the average in the 13 weeks since the election amounted to 447,908. This contradicts the administration’s and the media’s reporting that the economy is growing, but is consisted with the decline in Gross Domestic Product in the fourth quarters of 2012. At the same time, Obama’s rich friends benefited from a stock market boom as a result of his easy money policies and from government subsidies. The Fed’s increase in the money supply created few if any jobs but created an asset boom, fueled by expectations of run-away inflation. 

The fact is that increased government expenditures financed by public debt creates few new productive jobs and few are lasting. As soon as government expenditures are reduced, the temporary jobs created are lost. Many of the jobs created by government deficit spending are unproductive, for example, the government subsidized jobs in wind and solar energy. Even though more than half the cost is borne by government subsidies, the favored companies are subsidized even further by tax credits and by orders to the electric utilities to buy their output even though it is more costly. In addition, the utilities must have back-up facilities for those periods in which little or no electricity is generated because of the lack of wind or sunlight. The rising cost of electricity is a burden on the economy.

Insanity has been defined as doing the same thing over and over again and expecting a different result. The President wants to increase federal government spending which he has been doing and financing by deficits for four years and which has done little or nothing to create improved economic conditions. Unemployment, including involuntary part-time employment and the number who are no longer seeking work or who have dropped out of the labor force, is higher than when he took office. Republicans on the Senate Budget Committee reported that the federal government spent more than a trillion dollars (the amount of the federal deficit last year) on welfare programs and that more than forty-seven million, a new high, were enrolled to receive food stamps. 

The President is arguing for higher taxes on the rich to balance the budget and is unwilling to cut expenditures. Even his Keynesian advisers would agree that higher taxes do not stimulate the economy; they are a deterrent. They do argue for increased expenditures to stimulate the economy and are silent about waste and abuse..  

Why is there so little investment in manufacturing? What the private sector really needs is a reduction in all the impediments to investing in the U.S. American corporations are investing all right but they are investing abroad. The U.S. under President Obama has proven anti-business. It is subsidizing businesses but they are mostly unproductive businesses. They are a burden on taxpayers and the economy. The federal government is not creating a business environment that makes doing business in the U.S. attractive to investors in businesses that do not require subsidies.  Its easy money policy is bidding up the prices of stocks but as for businesses, easy money is good but foreign countries are proving more attractive places in which to invest. Nearly all of the high tech products Americans consume are made abroad, many by American corporations outsourcing their production.

Why has the stock market been booming? We’ve already mentioned easy money which has nowhere else to go. They are growing by cutting costs, laying off workers, and producing for the essentially unproductive sectors of the economy, government, owners of corporate securities benefitting from the stock market boom. Its growth cannot be sustained in an economy that isn’t growing at all. The declining sector of the economy, manufacturing, is still large. But these cannot sustain a growing economy.

If we fail to create conditions favorable to investors in manufacturing, the economy is in dangers of hyper-inflation and collapse.

Your Name:

Post a Comment:

Comment by M, 2/9/2013:

To be fair, the Reagan revolution was built on the foundation of tax cuts and deficit spending. Bush I raised income taxes and got the boot. Clinton raised income taxes and his political party lost the U.S. house and Senate. Politicians do learn from their mistakes. Today our political leaders have (collectively) chosen to reap the benfits today and push all the hard choices into the future. The Obama administration could be described as following a strategy that is akin to the Johnson administration's Guns and Butter policy.

  • Richmans' Blog    RSS
  • Our New Book - Balanced Trade
  • Buy Trading Away Our Future
  • Read Trading Away Our Future
  • Richmans' Commentaries
  • ITA Working Papers
  • ITA on Facebook
  • Contact Us

    Dec 2021
    Nov 2021
    Oct 2021
    Sep 2021
    May 2021
    Apr 2021
    Feb 2021
    Jan 2021
    Dec 2020
    Nov 2020
    Oct 2020
    Jul 2020
    Jun 2020
    May 2020
    Apr 2020
    Mar 2020
    Dec 2019
    Nov 2019
    Oct 2019
    Sep 2019
    Aug 2019
    Jun 2019
    May 2019
    Apr 2019
    Mar 2019
    Feb 2019
    Jan 2019
    Dec 2018
    Nov 2018
    Aug 2018
    Jul 2018
    Jun 2018
    May 2018
    Apr 2018
    Mar 2018
    Feb 2018
    Dec 2017
    Nov 2017
    Oct 2017
    Sep 2017
    Aug 2017
    Jul 2017
    Jun 2017
    May 2017
    Apr 2017
    Mar 2017
    Feb 2017
    Jan 2017
    Dec 2016
    Nov 2016
    Oct 2016
    Sep 2016
    Aug 2016
    Jul 2016
    Jun 2016
    May 2016
    Apr 2016
    Mar 2016
    Feb 2016
    Jan 2016
    Dec 2015
    Nov 2015
    Oct 2015
    Sep 2015
    Aug 2015
    Jul 2015
    Jun 2015
    May 2015
    Apr 2015
    Mar 2015
    Feb 2015
    Jan 2015
    Dec 2014
    Nov 2014
    Oct 2014
    Sep 2014
    Aug 2014
    Jul 2014
    Jun 2014
    May 2014
    Apr 2014
    Mar 2014
    Feb 2014
    Jan 2014
    Dec 2013
    Nov 2013
    Oct 2013
    Sep 2013
    Aug 2013
    Jul 2013
    Jun 2013
    May 2013
    Apr 2013
    Mar 2013
    Feb 2013

    January 2013
    December 2012
    November 2012
    October 2012
    September 2012
    August 2012
    July 2012
    June 2012
    May 2012
    April 2012
    March 2012
    February 2012
    January 2012
    December 2011
    November 2011
    October 2011
    September 2011
    August 2011
    July 2011
    June 2011
    May 2011
    April 2011
    March 2011
    February 2011
    January 2011
    December 2010
    November 2010
    October 2010
    September 2010
    August 2010
    July 2010
    June 2010
    May 2010
    April 2010
    March 2010
    February 2010
    January 2010

    Book Reviews
    Capital Gains Taxation
    Corporate Income Tax
    Consumption Taxes
    Economy - Long Term

    Economy - Short Term
    Environmental Regulation
    Last 100 Years
    Real Estate Taxation

    Outside Links:

  • American Economic Alert
  • American Jobs Alliance
  • Angry Bear Blog
  • Economy in Crisis
  • Econbrowser
  • Emmanuel Goldstein's Blog
  • Levy Economics Institute
  • McKeever Institute
  • Michael Pettis Blog
  • Naked Capitalism
  • Natural Born Conservative
  • Science & Public Policy Inst.
  • Votersway Blog
  • Watt's Up With That


  • [An] extensive argument for balanced trade, and a program to achieve balanced trade is presented in Trading Away Our Future, by Raymond Richman, Howard Richman and Jesse Richman. “A minimum standard for ensuring that trade does benefit all is that trade should be relatively in balance.” [Balanced Trade entry]

    Journal of Economic Literature:

  • [Trading Away Our Future] Examines the costs and benefits of U.S. trade and tax policies. Discusses why trade deficits matter; root of the trade deficit; the “ostrich” and “eagles” attitudes; how to balance trade; taxation of capital gains; the real estate tax; the corporate income tax; solving the low savings problem; how to protect one’s assets; and a program for a strong America....

    Atlantic Economic Journal:

  • In Trading Away Our Future   Richman ... advocates the immediate adoption of a set of public policy proposal designed to reduce the trade deficit and increase domestic savings.... the set of public policy proposals is a wake-up call... [February 17, 2009 review by T.H. Cate]