There are certain measures that we know will advance our recovery.

With that assertion President Obama closed his press appearance Friday morning after a disappointing jobs report for August was released.  The private sector created 67 thousand jobs and the unemployment rate ticked up to 10.6%

This chart compares current job growth results with the recovery of the 1980s.

Obama tried to smear some lipstick on the pig:

As I’ve said from the start there’s no quick fix for the worst recession we’ve experienced since the Great Depression.

Actually, what he did say at “the start” of his administration, nineteen months ago, was that his so-called stimulus, $864 Billion in extra borrowing and spending, would in his words, “immediately jumpstart job creation and long term growth.”  He and his advisers assured us then that they knew the unemployment rate would not rise above 8%.   He published a report with a chart showing they knew unemployment fall to 7.2% by this month.  Reality: August was the 15th straight month of 9.5% or higher unemployment.

Obama continued:

The truth is it took years to create our economic problems and it will take more time than any of us would like to repair the damage.

Translation: It’s still Bush’s fault.

…we need to take further steps to create jobs and keep the economy growing, including extending tax cuts for the middle class and investing in the areas of our economy where the potential for job growth is greatest. [emphasis added.]

The fundamental truth Obama and the Democrats consistently reject is that less, not more government intervention in the economy will result in the most rapid job growth.  The President and a few government officials cant possibly overrule the judgment of millions of businesses and pick investments “where the potential for job growth is greatest.”  The notion that any President or any group of government officials could possibly exercise better judgment than millions of entrepreneurs investing their own resources is simply absurd.

Be assured if Obama and his advisers really knew how to use government power to create private sector jobs they would have done so by now, if only to prevent Republican victories in the upcoming election!

Obama continued:

The month I took office we were losing 750,000 jobs a month.  this morning new figures show the economy produced 67,000 private sector jobs in august, the 8th consecutive month of private sector growth…that’s positive news and it reflects the steps we’ve already taken to break the back of this recession.

Yes, compared to massive job losses, 67 thousand new private sector jobs is good news.  But as the chart above shows, compared to historical precedent it’s pathetic.  Sixty-seven thousand isn’t nearly enough to replace the 7.7 million private sector jobs lost since the beginning of 2008 plus add millions more to accommodate population growth.

During 1983, the first year of job recovery after the implementation of the Reagan tax cuts, employers created an average 286,000 new jobs per month.  Since the workforce is now 38% larger,  today’s employers would have to add an average of 394,000 jobs per month to match the growth rate during that first year of the Reagan recovery.

President Reagan’s successful strategy was to reduce government intervention and taxes, making businesses more free, not less.  Reagan didn’t claim to know better than millions of private sector decision-makers which investments would best grow businesses and create jobs.

Reagan did know that when it comes to creating jobs less government is more.

President Obama gave what was billed as a speech on Iraq Tuesday night.  But towards the end, Obama changed the subject to a down-beat preview of the one of the Democrats’ deceptive campaign themes for the fall Congressional elections:

Unfortunately, over the last decade, we have not done what is necessary to shore up the foundation of our own prosperity. We have spent over a trillion dollars at war, often financed by borrowing from overseas. This, in turn, has short-changed investments in our own people, and contributed to record deficits.

Other Democrats have also tried to deceive voters into believing that the the Iraq operation was the largest expenditure of the past few years and the primary cause of the enormous, unprecedented deficits of 2009 and 2010.

But the truth contradicts the President and the Democrats.

According to the Congressional Budget Office (CBO) a trillion dollars includes the cost of Afghanistan, which Obama has always said was the legitimate, necessary war.   So far, according to CBO, the Iraq operation has cost $750 Billion since the invasion in 2003, or an average of $107 Billion per year.

$107 Billion is of course a lot of money.  But it isn’t nearly enough to justify Obama’s insinuation that war spending crowded other priorities out of the budget.  Sad but true, $107 Billion is but a tiny portion of the federal budget.

Obama claimed $1 Trillion in war spending over seven years had “short-changed investments in our own people,”  But the numbers don’t support his assertion.  Each year the Office of Management and Budget adds up “investments in our own people” and issues a report called “Payments for Individuals.”  These payments include:

• Medical programs
• Housing subsidies
• Food stamps and nutritional assistance
• Education grants, loans and training programs
• Medicare
• Income security programs
• Social Security
• Veterans benefits

The payments-for-individuals category does not include salaries paid to the military or to federal employees.  It does not include fees paid to contractors who do work for the government.

From October, 2001, when the war on terror began with the invasion of Afghanistan, through September, 2010 Payments for Individuals (“investments in our own people”) total $15 Trillion, compared to about $1 Trillion for Iraq and Afghanistan.

This last chart compares payments for individuals with total military spending and all other spending for the current budget year.  The actual data demonstrates that Obama’s claim is preposterous.

Government economists issued their quarterly GDP report on Friday, confirming what has become obvious to most Americans: the recovery is faltering and there is little chance of restoring the 7.8 million jobs lost since the beginning of 2008 until government dramatically changes course.

GDP growth in the second quarter of 2010 was an anemic 1.6%.  Third (current) quarter results are not likely to be any better and could even be negative.  The chart compares current, lackluster, GDP growth with the first ten quarters of the nine year growth era that began in 1983.

Presidents Reagan and Obama each inherited recessions that were similar in their length and severity.  By one measure, unemployment rate, Reagan inherited a worse crisis than Obama.

But the similarity ends with policy responses and the resulting recovery

• The centerpiece of Obamanomics is the $860 billion “stimulus” diverting resources from private sector spending and investment to additional government spending, over and above the already bloated federal budget.  This is textbook Keynesian doctrine and has utterly failed to do what the President promised, “jumpstart job creation.” President Reagan had no such program.
  
• Presidents Bush and Obama implemented a massive bailout to save Wall Street firms, and unionized car companies from the consequences of their own bad judgments.  Reagan allowed the market and the bankruptcy process to clear away business failures quickly.
  
• Reagan pulled back government intervention and regulation, while Obama has dramatically expanded government interference in the private sector.
• Reagan worked with Democrats in Congress to enact broad based, sweeping tax cuts, leaving more wealth in the hands of the entrepreneurs who created it, to be reinvested in business expansion and job creation.  Obama and the Democrats promise large tax increases on investors and on the most successful small businesses.
  

The Bottom Line

As the chart shows, quarterly GDP growth is trending in the wrong direction under the Obama-Keynesian approach.  There is no reason to believe that allowing Obama and the Democrats to continue their policy of enacting stimulus after stimulus, including cash for clunkers, subsidies to home buyers, and subsidies to blue-sky energy schemes will ever result in a return to growth and prosperity.

Entrepreneurs and those who invest in entrepreneurs are the creative, innovative energy that drives the American, and indeed the world’s economy.  Even Democrats admit that entrepreneurial small businesses provide most of the new jobs in the American economy.

But, since the government-caused the financial crisis in 2008 most of the political energy and well over a Trillion tax dollars have been focused on:

• Saving giant financial institutions from the consequences of their mistakes and misjudgments;
• Saving auto companies and their unionized work forces from the consequences of decades of ludicrously expensive union contracts
• Subsidizing employees of state and local governments and their unions.

Entrepreneurs on the other hand face absurdly complex new health care regulations now being written by some 51 new bureaucracies created by the ObamaCare legislation.  the most successful entrepreneurs, who are in the best position to hire the most employees are the target for punitive  tax increase scheduled for January 1.

Obviously, when a small business closes the self-employed owner isn’t the only one who joins he ranks of the unemployed.  His employees go down as well. Instead of being a source of new jobs for unemployed workers, the former entrepreneur becomes another competitor for one of the few jobs created by the remaining entrepreneurs.

If politicians who claim to be “fighting for jobs” were sincere they would reduce rather than increase the tax and regulatory burdens on small businesses.  They would do whatever possible to remove bureaucratic barriers to small business start-up and expansion.

• In July there were 1,198,000 fewer self employed Americans than there were at the beginning of 2007.
• In July 5.72% of the workforce was self employed.  This was the lowest percentage since The Labor Department began monthly counts of the self employed in 1946.

The Bottom Line

The message Congress and state legislatures must hear from all of us is that the economy cannot restore the 8 million private sector jobs lost in the recession, plus add millions of additional jobs to accommodate population growth, as long as the number of job creators is shrinking.

Story of the St. Nicholas Greek Orthodox Church here

This chart compares Weekly Unemployment claims in the second year of the Obama stimulus with the second year of the Bush tax cuts.

We’re half way through the second year of the $887 Billion “stimulus” that President Obama promised would, in his words, “immediately jumpstart job creation and long term growth.”

Obama and his supporters continuously blame President Bush’s “policies” for  current economic misery, without connecting the dots between specific policies and economic results.  Bush does have a mixed economic record, but one “policy” that turned out to be an unqualified success was the round of tax cuts enacted in 2003, reversing 31 months of job losses.

Even in the best of times there are always some layoffs.  But as the economy improved after the tax cuts of 2003 the number of job losses declined, the unemployment rate declined and the number of unemployment insurance claims declined.

The high number of claims every week since the stimulus was enacted, is one of several indicators of continued severe weakness in the economy, and the failure of current policies of massive borrowing, spending and expanding government intervention in the economy.

The current level of weekly jobless claims is inconsistent with a growing economy and predicts higher long term unemployment in the future.

This is the second post on this topic.  In the previous post I discussed President Obama’s defense of an Islamic Mosque adjacent to ground-zero where Islamic terrorists murdered some 2,700 people on 9-11.  During a speech to a group of Muslims last week The President said, in part:

I believe that Muslims have the same right to practice their religion as anyone else in this country. That includes the right to build a place of worship and a community center on private property in lower Manhattan, in accordance with local laws and ordinances.

In the previous post I reviewed a few of the battles Christian churches have had with local zoning authorities all across the country and wondered if the President was equally concerned about the property and religious freedom rights of all churches.

Email, Twitter and comment reaction to my previous post indicates that I did not make my position clear.  So I’ll give it another try.

First, lets consider the tiny St. Nicholas Greek Orthodox Church, built in the 1960s.  It was across the street from the World Trade Center and was destroyed on 9-11.  It still has not been rebuilt.

Before 9-11 St. Nicholas was on a small parcel of land and was surrounded by a parking lot.  After 9-11 the Port Authority took over planning, zoning and permitting for the entire Ground Zero area, purchased the parking lot, and announced plans to turn it into a park.

Several years ago the Port Authority offered the church another, nearby parcel in exchange for it’s land, which would become part of the park.  But later the Port Authority apparently reneged on the land exchange offer and has since blocked the church from rebuilding on it’s own land.

A 2008 New York Times article quoted Port Authority Director Chris Ward:

We understand the church’s mission.  It is part of the history of the site and we want to maintain that. We just need to put the project in the right context.

Context?

Isn’t context why a majority of Americans and a majority of New Yorkers oppose siting a Mosque adjacent to what even President Obama called “hallowed ground?”  Apparently municipal authorities can raise “context” as a condition to be met by a Christian Church.  But The People have been rebuked from the President’s bully pulpit for objecting that Ground Zero is the wrong context for a Mosque.

If local authorities across America and in New York consistently adhered to the principles of religious freedom and property rights enshrined in America’s founding documents any church would be free to pick any location that did not infringe on the property rights of others.  If that were reality in America I would, however reluctantly, agree that the Muslims had religious and property rights to occupy the site they have chosen near ground zero.

But throughout the country powerful and capricious zoning boards regularly infringe on property rights, and when churches are involved, they infringe on religious freedom as well.   New York and Port Authority zoning officials appear to be among the most powerful and capricious in the nation and could easily respect the will of The People and reject a Mosque at ground zero, especially if “context” were a consideration!  Instead they have offended The People and stirred up unnecessary conflict.

I agree with Randy Altschuler, a candidate for Congress from a nearby district in New York who called the President’s statement “political correctness run amok.”   By invoking religious liberty and property rights only on behalf of Islam Obama demonstrates rank hypocrisy.

But this isn’t really about religious rights.  It’s about Obama’s desires to see himself as more “tolerant” than the rest of us, and to be embraced by the Islamic world.

By planning a Mosque at Ground Zero Islam offends the memory of those who perished on 9-11 and offends the sensibilities of millions of Americans.  Obama’s sanctimonious call for us to stifle and respect the religious rights of Muslims, when the same rights of other religions are regularly infringed, turns offense into outrage.

Most readers are aware of the heated national debate over plans to build a 13 story Islamic Mosque (and maybe it’s also a cultural center – the propaganda is inconsistent) adjacent to ground zero in Manhattan where some 2,700 people were slaughtered by Islamic terrorists on 9-11.

Astoundingly,  President Obama, who has no obligation to become involved in this local issue, chose to step up in vigorous support of a Ground Zero Mosque in remarks at a White House event Friday evening.  After insincere acknowledgment of the World Trade Center site as “hallowed ground” and the pain and suffering of those who lost loved ones, he simply dismissed without consideration any objections to allowing the Mosque to be built:

But let me be clear: as a citizen, and as President, I believe that Muslims have the same right to practice their religion as anyone else in this country. That includes the right to build a place of worship and a community center on private property in lower Manhattan, in accordance with local laws and ordinances. This is America, and our commitment to religious freedom must be unshakable. The principle that people of all faiths are welcome in this country, and will not be treated differently by their government, is essential to who we are.

The President’s sanctimonious invocation of the right to practice religion is a diversion.  Nobody is calling for denial of the right to “practice” Islam.  The controversy is over the location of one Mosque, in a city that already has scores of Mosques, where there are no restrictions of “practice.”

As a former member of a Church Board, I happen to have learned that what Obama claims is a right – to build a place of worship on private property – is, in pratice, not really a right at all.  Churches are subject to the authority of zoning officials and routinely face barriers that secular building projects do not.

The President should, and probably does know that where local governments are dominated by people with his Leftist point of view, churches are often denied what he claims is their right unless they have the resources and time to litigate in court. In fact, if the Muslims have to find another site in Manhattan their setback will have been be less than zoning setbacks suffered by of Christian churches all across the country.

Local zoning boards publish lists of land-use designations with the types of uses permitted within each designation “as a matter of right,” meaning no special action by the zoning board is required.  For example, in a “commercial” zone one may build a retail store as a matter of right, but not a factory.  To use a property for an activity not on the list for that property’s zoning designation, one must apply for a “variance” which can be granted or denied, for virtually any reason, at the discretion of the zoning board.

A study of over 200 municipalities by the Chicago law firm Mauck & Baker, found that more than half had no zone whatsoever where houses of worship could locate as a matter of right. Thus, worship is virtually the only activity that may not locate anywhere in those municipalities without first applying to and receiving permission from zoning officials, who operate with the power to deny permission for any reason or no reason.  Here are just a few of numerous examples:

• Just last week in Pemberton Borough New Jersey, 80 miles South of Manhattan, the local zoning board rejected a church’s application for permission to renovate an abandoned cheese factory for use as a worship center.  The Board admitted its land use plan did not permit a church to locate anywhere without applying for and being granted a variance.
• In 2004 the Vineyard Christian Fellowship of Evanston, Ill had to sue in federal court after the zoning board ruled it could convert an old office building for use as a concert hall but not a for worship.  Any legitimate justification to reject a house of worship, such as traffic congestion would, of course, also apply to a concert hall.
• In May the 10Th U.S. Circuit Court of Appeals ruled in favor of the Rocky Mountain Christian Church and school that had been denied building permits to expand its facilities by the Boulder County Colorado zoning board.   The Court found that in considering the church’s application for a building permit officials had used a different interpretation of zoning regulations than it had applied when granting permission to a non-religious private school to expand on land with the same zoning and similar circumstances.

These examples were noticed and documented by the media because of litigation.  But there is little public record of cases where a church that lacks the resources to mount extended litigation simply gives up after application for land use is denied by local officials.

In a case that was reported Miami’s Church of God Holiness in Christ wanted to convert an abandoned commercial building in the impoverished, crime-ridden, Little Haiti section of Miami.  After enduring the city’s autocratic zoning process they finally received permission and made a $40,000 down payment on the property.  But then a neighboring business, a strip club, objected and city zoning authorities withdrew permission.

Opponents of the Mosque project note that its name, Cordoba House proves the intended purpose is to serve as a shrine to Islamic triumph over the “infidels” of American liberty and free markets.  The original Cordoba Mosque was founded in what is now Spain after Muslims conquered and occupied the area in the eighth century, and sold much of the local population into slavery.

If the real reason for building this Mosque is a genuine need for one more in a city that already has many, the Muslims could do what Christian churches have had to do all across the nation, find another site.

If New York officials wanted to support the 9-11 survivors and respect national sensibilities they have the authority and could easily find justification within the City’s byzantine zoning regulations to rule against a Mosque in this particular location.

The one-month deficit for July was $165,043,000,000, or $5 Billion more than the “irresponsible Bush deficit” for the entire year of 2007.

Since the first day of his Administration President Obama has fully exploited a recirculating funding and campaign support system with public employee unions that has no equivalent on the Republican side.

The system is simple:  Democrats pass legislation to fund or subsidize states and municipalities that then hire more employees, who then pay more union dues, a portion of which is contributed to Democrats.  Today we see this system in action.

Congress is in recess for the entire  month of August.  But Speaker Pelosi called the House of Representatives back to Washington for two days to pass an “emergency” bill that will provide Billions to shore up employment in state and local governments whose tax revenue has declined in the recession.  President Obama signed it into law immediately.

In a press release Gerry McEntee, president of the Association of Federal, State, County and Municipal Employees (AFSCME) previewed his union’s plans to reciprocate:

We are set to launch a robust field plan across the country during the month of August, including advertising and grassroots events.  We intend to highlight the clear choice Americans will make in November between Democrats who are working to protect jobs and move the economy forward and Republicans who are willing to wreck the economy for political gain.

Mr McEntee apparently believes the only jobs that matter are public sector jobs.  As we demonstrated here the Democrats have utterly failed to prevent the loss of millions of private sector jobs since they took control of Congress in 2007 and the White House in 2009.

President Obama and the Democrats claim today’s emergency vote in the House of Representatives is vital to prevent layoffs.  But all across the country public employee unions have refused to negotiate concessions that would reduce costs and thus prevent layoffs.  The Milwaukee school district is in financial crisis with no options left other than layoffs.  Yet the teachers union has gone to court seeking to force the insolvent district to provide free Viagra to its members.

It seems that public employee unions believe they are owed unlimited bailouts from Congressional Democrats and do not have to agree to less generous benefit packages in order to save the jobs of their own members.  And, it seems the President and his party agree.

We know from studying the lessons of past recessions that climbing out of any recession, especially one as deep as this one takes some time. the road to recovery doesn’t follow a straight line

But the President and the Democratic Congress have implemented a series of measures that defy  the lessons of past recessions, especially 1981 that was, by some measures, worse than this one.

Ninteen months ago President Obama inherited a deep recession.  The center-piece of his response was the so-called Stimulus, $887 Billion in extra borrowing and spending, over and above the government’s already bloated budget.  Obama promoted the stimulus aggressively, promising that it would, in his words “immediately jumpstart job creation.”  Additional responses to the recession were to

• Expand the bailout program begun under the Bush administration;
• Enshrine as explicit government policy the theory that some companies, such as GM and Chrysler are deemed too-big-to-fail and will always be rescued from the consequences of their own mistakes, especially if their workforce is unionized;
• Offer The “cash for clunkers” subsidy to new car purchasers
• Subsidize blue-sky energy schemes that are too expensive and unreliable to survive in the competitive marketplace;
• Schedule tax increases on small businesses and investors to begin in 2011;
• Continuously threaten employers with hyper-regulation, new health care mandates, and an artificial energy shortage imposed by government.

Like President Obama, President Reagan inherited a deep recession as he took office in 1981. By some measures it was worse than the current downturn.  Reagan’s economic program, based on his commitment to liberty, was the opposite of Obama’s:

• Reduce regulation and government intervention in the economy;
• Enact sweeping tax cuts that were phased in over three years.  Each of the 16 income tax bracket rates were reduced by at least 25%.  The top bracket rate was cut from 70% to 50%.  Tax cuts left capital in the hands of those who had earned it and were best equipped to invest in job creating enterprises;
• Release the creative and productive energies of The People from the yoke of imperial government.

The upper chart shows the job market recovery is faltering at best, after 31 months of Bush/Obama policies.  There are 8 million fewer Americans now employed than in December, 2007.

The results, in the lower chart, speak for themselves.  Reagan’s policies turned the job market around after 16 months of losses. The Reagan economy grew continuously for 90 months, creating a total of 21 million new jobs, or a 24% increase in the number of Americans who were employed.

President Obama and Democrat leaders in Congress have decided that income tax rates for “the rich,” those earning more than $200,000, must be increased.

One of their justifications is the claim that at current rates these taxpayers are paying “less than their fair share.” But they always assert “the wealthy” aren’t paying their fair share.  When asked how much the wealthy should pay their answer is always the same:

More!

.

Obviously, “fair” has no definition. But we thought it would be interesting to see just what portion of the total those being targeted for a tax hike actually do pay.

The above-$200,000 group includes only 3.1% of all taxpayers.  In 2007 they paid 54.6% of all income tax revenue collected by the government, the highest in history.  The 2007 percentage was almost ten points higher than the highest of the Clinton years.

As we reported here most of the taxpayers in the over-$200,000 bracket are small business, the employers who usually create most of the new jobs that lead America out of  recessions.  Obama and the Democrats should have to explain how they think a tax increase on these businesses would help create more jobs.

The establishment politicians and commentators who make this claim expect you to conclude that the rich paid less income tax after the Bush tax tax rate reductions than before.   This chart, showing the most recent figures available from the IRS tells the truth.

As the chart shows, revenue from the top group was falling each year until the Bush tax cuts were enacted in 2003.  Then revenue increased every year until taxable small business profits were hit by the recession that began in 1988.

If government had collected less tax revenue from “the rich” – mostly small business owners – after the rate reductions they might deserve a share of the blame for deficits.  But in fact, the rich paid more – a lot more.

The establishment elite demonstrate their understanding of the disincentive effect of taxation when they call for taxes on choices and behaviors they dislike.  They advocate:

• Higher gasoline tax to “nudge” us out of cars and into mass transit;
• Taxes on sodas and sweets to keep us from getting fat and burdening their government dominated health care “system.”

But those same elites scoff at the obvious disincentives inherent in high income tax rates.   The income tax is a tax on risk-taking, saving, investment, and productive work – all the activities necessary for job creation.

Because higher rates on “the rich,” especially small business owners, discourage work, saving and investing, the people they are designed to target respond by curtailing business activities and thus earning less taxable income.   As a result, higher rates don’t necessarily generate more revenue.  Lower rates are less of a barrier to risk-taking, investment, business expansion and hiring, all the activities that generate more taxable profits.

In fact, as this chart shows, after the tax cuts of 2003 the deficit declined, as the rich paid more income tax.
This is not the first time higher income folks paid more income tax after a rate reductions.  During the Reagan Administration there was a series of phased in rate reductions from 1981-83, and another rate reduction in 1986.  The results:

• In 1980 there were eight tax brackets and the highest was 70%.   People earning more than $200,000 reported a total of $36 Billion in income and paid $19 Billion in tax.
• In 1988 there were only two tax brackets, 15% and 28%.  The over-$200,000 group reported $353 Billion in income and paid $99.7 Billion in tax.

Over eight years taxable income reported by “the rich” rose 881% and income tax collected from them rose 425%!  But even though the government was the beneficiary of this huge windfall the political-media establishment still promotes the deception that the Reagan tax cuts caused deficits.