Jul 02 2009

Obamanomics Proving To Be An Abysmal Failure

Published by at 11:20 am under Measuring The Recovery

Update: Innocent Bystanders has the most powerful picture of the disastrous Obamanomics:


Note the bottom, dark blue line which was the Democrats’ promise to America. While no one expects  a prediction to be 100% accurate, clearly these folks had no clue, and have no clue, what they are doing. It’s not even close.

One could even argue it would have been better if the Democrats had done nothing at all. Their fantasy liberal policies may have really made things much worse since we are now well beyond the ‘do nothing’ light blue line – and climbing.

One final observation: look at how long it will take to get us back to ‘normal’. The higher the peak the longer the recovery. We still have to top the hill and come back down. Therefore, we will be above 8% unemployment for months and months to come. It is a very powerful and sad picture. – end update

Update: Bloomberg notes:

Unemployment is projected to keep rising for the rest of the year just as the income boost from the stimulus package fades, undermining prospects for a sustained rebound in household purchases, analysts said. As companies fromGeneral Motors Corp. to Kimberly-Clark Corp. cut costs, the lack of jobs will restrain growth.

“This will be another jobless recovery,” said John Silvia, chief economist at Wachovia Corp. in Charlotte, North Carolina. “We may get positive economic growth driven largely by federal spending, but people on the street will say, ‘Where are the jobs?’”

The jobless rate was projected to climb to 9.6 percent from 9.4 percent. Forecasts ranged from 9.3 percent to 9.7 percent. By the end of the year, unemployment will reach 10 percent, according to the median forecast of economists surveyed last month.

The world’s largest economy has lost about 6.5 million jobs since the recession began in December 2007. That’s the biggest drop in any post-World War II economic slump.

Unemployment will “remain painfully high for several more years,” Federal Reserve Bank of San Francisco President Janet Yellen said this week. “I expect that we will turn the growth corner sometime later this year, but I am not optimistic that the economy will spring back to normal any time soon.”

So, where is the stimulus? Stuck in the constipated federal government wasting away. Here is the latest data I have been monitoring on the so called stimulus.

In the first graph there are 4 sets of columns showing: (from left to right) (1) the amount budgeted for stimulus programs, (2) the amount allocated to specific programs, (3) the amount spent creating jobs and (4) the amount unspent from the total budget. (click image to enlarge)

As everyone can see much of the money has not even been assigned to programs (an arduous but legally required process to make sure programs are valid). The second chart translates the dollar amounts for the last three sets of columns into percentages of the budgeted amounts. (click image to enlarge)

Bottom line: 99% of the job-creating money for these departments/agencies is stuck in the government coffers – doing nothing. Here’s the summary across all 6:

  • $105 billion was budgeted across the organizations to start new programs and create jobs (the largest amounts going  to the Departments of Energy and Transportation)
  • Of that, only $22.7 billion as even been allocated to programs to be spent (21.5%)
  • The total amount spent to date on stimulus programs: $0.350 billion has been spent stimulating the economy. A paltry 0.33%.

One could also ask where is the transparency. The stimulus reporting, which was coming out weekly, is now two weeks overdue. Apparently someone doesn’t like the fact we can measure the failure of the Obama-Pelosi-Reid liberal economic experiment week by horrible week. – end update

Well, the unemployment numbers are out and it is no surprise that the failed liberal economic stimulus policy of government funded stimulus is still a shocking failure:

The pace of job losses quickened in June after slowing just a month earlier, casting a shadow over the Obama administration’s attempts to stanch months of declines in the labor market.

The American economy shed 467,000 jobs last month, and the unemployment rate rose to 9.5 percent from 9.4 percent, the Labor Department reported on Thursday.

The failure is emphasized by the number of lost jobs per month (click image to go to larger, interactive graphic):

No stimulus money is coming out of the bloated federal bureaucracy, so no jobs are being created. The actual unemployment is actually closer to %12.8 because the government only counts 75% of the folks on the primary unemployment benefits, those on extended unemployment benefits are not counted (as we noted here). Is it any surprise the job losses jumped 100,000 (33%) in one month? And as I have said many times (all my posts on monitoring the lack of a recovery), this will continue through the summer and well into the fall.

24 responses so far

24 Responses to “Obamanomics Proving To Be An Abysmal Failure”

  1. WWS says:

    No one yet dares to whisper the obvious – high unemployment is a self-reinforcing process, AKA one with a positive feedback loop.

    Unmployment begets more foreclosures.

    More foreclosures beget more financial problems.

    More financial problems beget a steadily weakening economy.

    A weakening economy begets more unemployment.

    This is the feedback loop that the stimulus was SUPPOSED to stop. It has failed. The failure doesn’t just mean that we have wasted all of that money – it means that this economy is now locked into a death spiral with no forseeable end short of a total crash of our economic system.

    This may take a couple of years – but we aren’t pulling out of this one for a decade at least. If not longer.

  2. crosspatch says:

    Meanwhile, since the Democrats were elected to Congress in 2006, Congressional travel expenses have exploded.

    Hundreds of lawmakers traveled overseas in 2008 at a cost of about $13 million. That’s a 50% jump since Democrats took control of Congress two years ago.

    The cost of so-called congressional delegations, known among lawmakers as “codels,” has risen nearly 70% since 2005, when an influence-peddling scandal led to a ban on travel funded by lobbyists, according to the data.

    Although complete travel records aren’t yet available for 2009, it appears that such costs continue to rise. The Journal analysis shows that the government has picked up the tab for travel to destinations such as Jamaica, the Virgin Islands and Australia’s Great Barrier Reef.

    Lawmakers frequently bring along spouses on congressional trips. If they take commercial flights, they have to buy tickets for spouses. If they fly on government planes — as they usually do — their spouses can fly free.

    But if Sarah Palin takes family along, she must reimburse the government. Amazing.

  3. crosspatch says:

    OHH! I should have read the whole thing:

    In mid-June, Sen. Daniel Inouye (D., Hawaii) led a group of a half-dozen senators and their spouses on a four-day trip to France for the biennial Paris Air Show. An itinerary for the event shows that lawmakers flew on the Air Force’s version of the Boeing 737, which costs $5,700 an hour to operate. They stayed at the Intercontinental Paris Le Grand Hotel, which advertises rooms from $460 a night.

    The lawmakers were invited to a dinner party at the U.S. Embassy and had cocktails at a private party at the Eiffel Tower. Mr. Inouye attended a dinner sponsored by the Aerospace Industries Association, a U.S. trade group. Another senator on the trip, Alabama Republican Sen. Richard Shelby, took a cruise on the River Seine with defense-industry executives and elected officials from Alabama, Mississippi and Florida.

    Mr. Inouye and Mr. Shelby declined to comment.

  4. Frogg says:

    US Unemployment Now Matches Europe

    Unreal. With Unemployment at 9.5% Obama Tells Crowd: Stimulus Is Working (Video)
    Barack Obama told a Virginia crowd today that the Stimulus Bill is working and has done its job.

    He goes on in that video to say that the purpose of the stimulus bill was to make sure teachers, firefighters, etc didn’t get layed off. Did he really mean to say that the purpose of the stimulus bill was to “make payroll”????

  5. Frogg says:

    Does America still stand for the universal rights of freedom and human rights?

    Deomocracy Protesters Bash Obama and CNN

    Obama ignored Iran’s “Neda”. He stood with Chavez and other dictators to support Zelaya.

  6. Frogg says:

    Rasmussen Poll: Obama slipping further on the economy

    Obama has hit a new high among those rating him fair or poor on the economy at 56%. Just a week ago, 47% approved of his economic policies, as opposed to 50% disapproval…

    The demographics of his decline portend more bad news for Obama and his Democratic allies in Congress. Only the youngest voters support him on fiscal policy, and only barely, 52%-46%. Every other age demographic above 30 years of age has majorities now showing disapproval. Independents have begun to run away in massive numbers; they now oppose him 75%-23%, a huge break away from Obama and a sign that his supposed moderate stances have been exposed as shams. Every income level except the lowest also has majorities disapproving of his handling of the economy. Voters outside the “political class” oppose Obama 65%-33%.

    The poll goes on….Obama tanking even further on national security issues also.

  7. kathie says:

    Yes Obama is creating or saving some jobs, but the problem they are all paid with tax payers money. But not to worry, the wealthy will take care of us. Boy, I hope they don’t run out of money!

  8. crosspatch says:

    The ONLY thing this administration has done is to pump money into the reserves of the financial companies (in exchange for equity and control of the board) and kept a couple of auto manufacturing unions afloat. That’s it.

    There are things the government could do. Such as:

    1. make one standard fuel formulation for all 50 states. There are currently over 40 different fuel formulations in place for different places at different times of the year. Some formulations are mandated for single cities. Making one standard fuel formulation nationwide will reduce costs of all goods and services in the economy.

    2. make one national standard pollution standard for vehicles and make it illegal for states to impose other standards on vehicles engaged in interstate commerce. California for example is now set to impose California emission standards on all vehicles even those entering the state only to deliver or collect a load of goods or passing through the state enroute to somewhere else. That is the kind of thing that resulted in the interstate commerce clause to begin with.

    3. Enforce prudent reserve requirements for financial institutions. Restore the division between banks and investment houses and give them different reserve requirements.

    4. Get government OUT of the mortgage industry. Real estate is NOT a ponzi scheme. We do not need to pour more and more homeowners into the market to drive prices up. We already did that and it collapsed. We don’t need to do it again.

    5. Realize that everything government touches, it screws up.

  9. […] Obamanomics Proving To Be An Abysmal Failure – The Strata-Sphere […]

  10. kathie says:

    Look at this AJ, From freerepublic…….

    General Electric to Use Embryonic Stem Cells for Testing, Phase Out Lab Rats
    07/02/2009 1:21:39 PM PDT · by wagglebee · 4 replies · 17+ views
    LifeSiteNews ^ | 7/2/09 | Alex Bush
    BOSTON, Mass, July 1, 2009 (LifeSiteNews.com) – General Electric has announced that it will use embryonic stem cells provided by Geron Corporation for the purpose of testing toxic effects of drug treatments.GE issued a statement, attempting to preempt criticism over the decision, saying, “We acknowledge the considerable debate and take very seriously the ethical and societal issues associated with research using stem cells derived from embryonic or fetal tissue.””We conduct our research in an ethically and scientifically responsible manner,” the statement said.However, embryonic stem cells have been the center of heated controversy since harvesting the cells requires the destruction…

  11. Mike M. says:

    You know, if Obama had sent the money over to the Defense Department, we could have put it to good use. There’s a lot of worn-out equipment that desperately needs to be replaced.

  12. kathie says:

    Interesting Mike….that was one of the ideas that the Republicans thought of, cut taxes, some shovel ready projects, fix military equipment and help states with unemployment. Same old tired ideas that Republicans always put forth, Obama has a new program. It really is old and tired too, but Obama’s world began with his Presidency, so must be new.

  13. Terrye says:

    Obama is a disaster.

    I thought that the Democrats would get some blame when oil hit $145 a barrel, but they survived that just fine. But their luck might have run out now.

    BTW, I think that is the real culprit behind the meltdown that everyone has forgotten about: high energy prices.

  14. crosspatch says:

    HOLE TOLEDO! look what I found

    Apparently some of the TARP fund spending has resulted in a profit for the government. Barney Frank wants to hurry up and blow that profit before the taxpayers can get their hands on it.

    When President Obama announced on June 9 that some financial institutions would be allowed to repay Troubled Asset Relief Program dollars, he said the massively expensive TARP bailout had made money for the federal government. “It is worth noting that in the first round of repayments from these [TARP recipients], the government has actually turned a profit,” the president said. Indeed, TARP supporters have long held out the hope that the program might be profitable.

    But now Rep. Barney Frank, the chairman of the House Financial Services Committee, has come up with a proposal to spend any TARP profits before they can be returned to the taxpayers. Last Friday, Frank introduced the “TARP for Main Street Act of 2009,” a bill that would take profits from the program and immediately redirect them toward housing proposals favored by Frank and some fellow Democrats.

    In exchange for receiving TARP money, financial institutions were required to hand over shares of preferred stock that paid a dividend for the government. In theory, if a financial institution paid the dividend faithfully, and then repaid the TARP money, then the government would turn a profit. Last month, the General Accountability Office (GAO) reported that, through June 12, 2009, the government had received $6.2 billion in dividend payments. The original TARP legislation required that money made from the program “shall be paid into the general fund of the Treasury for reduction of the public debt.”

    Frank, however, wants to spend the money before it can be used to pay down anything.

    These guys are behaving just like drug addicts. They HAVE to spend money. It is time to toss the lot of them out of office. All incumbents must go, regardless of party.

  15. WWS says:

    funny how you never see conman or jules or any of the other useless trolls show up in a thread like this.

    they know there is nothing that they can even pretend to say that will hide the failure.

  16. crosspatch says:

    The headline on this posting says it all. The graph says it in pictures.

  17. WWS says:

    Ran across a good quote this morning which lets me know that even these high numbers have been statistically faked to the low side. It would take a very long post to go into the amount of statistical manipulation which goes into the employment base, but let’s just say that it’s a complicated computer model (remind you of anything?) The measured numbers are massaged by any number of statistical algorithms which change the readings into what is actually reported. The only way to track this is to bypass the published reports and look only at the raw data, determine the difference between the raw and the reported data, and then determine the reason for the adjustment and see whether it makes sense or not. These numbers are available, but not many people bother to take the time to drill down into the actual, as opposed to the reported, numbers.

    the relevant quote:

    “The dreaded birth/death adjustment added 185,000 jobs (up 12.1% yoy) including 87,000 jobs in leisure/hospitality. I’ll let you draw your own conclusions as to the feasibility of adding jobs in that industry right now.”

  18. […] on in this area as we head into the 4th July weekend and the abysmal June unemployment report (see below). For two weeks there had been no reporting on the stimulus spending, heading into a 3rd week […]

  19. Toes192 says:

    btw, don’t come to Alaska… We have entire [bankrupt] families loading up… driving the very scenic highway from America to Anchorage… and… oops… no jobs here either…

  20. crosspatch says:

    Texas seems to be the place to go … but I wouldn’t load up and head there unless I had a job first. A friend of mine moved from SF to Dallas about a year ago; she’s glad she did.