Obama's Virtual Economy

It's endless fun, fiddling with the dials on the real world.

• By DANIEL HENNINGER

If you were a president who for three years presided over an economy with more than 13 million unemployed, a growth rate gasping around 2%, an historic credit downgrade and underwater home mortgages drifting like icebergs toward the American Titanic, what would you do?

You'd do what Barack Obama's done: Reboot.

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Welcome to the Sim City Economy. You really can make it up.

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With his recently announced campaign platform—An Economy Built to Last—President Obama has essentially constructed a virtual economy. Instead of the economy we all live in, he's making one up and inviting us to pretend we are living in it. Welcome to the Sim City Economy.

Sim City, one of the most popular products ever in the imaginary world of video games, lets players bring to life towns of their own devising in great detail. It's endless fun, fiddling with the dials on the real world.

In his State of the Union Address, Mr. Obama described what will be a major claim of his re-election campaign—that he renewed the American dream by bailing out General Motors. About the defensibility of this policy we can argue. But as is his wont, Mr. Obama erected a generalized theory of social betterment atop this one event. "What's happening in Detroit can happen in other industries." Mr. Obama announced. "It can happen in Cleveland and Pittsburgh and Raleigh."

It can?

What's interesting about this claim is that the corridor between Cleveland and Pittsburgh, much of it economically moribund for years, is experiencing a rebirth thanks to real economic forces, not a president who types in the name of another beleaguered city and hits Ctrl-Shift-Enter to solve its problems.

Most of this revival is taking place around the godforsaken city of Youngstown, Ohio, and the formerly dying steel towns west of Pittsburgh, an area better known today as the Marcellus Shale Natural Gas Field. Last summer, a French steel company, Vallourec & Mannesmann Holdings Inc., began construction on a new $650 million plant to make steel tubes for the hydraulic fracking industry. About 400 workers are building it. Nothing Barack Obama has done in three years—not the $800 billion stimulus or anything in his four, $3 trillion-plus budgets—is remotely related to the better times in Ohio and Pennsylvania.

But other than grudging acknowledgment of the private entrepreneurs' natural-gas success, don't expect to hear the carbon-based word "fracking" much in the president's stump speech when he paints in the numbers of the American economy as he imagines it. That pitch will run more toward the ideas in the Presidential Memorandum released this Tuesday, directing the Department of Agriculture to put in motion a program called "Promoting a Bioeconomy."

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Chad Crowe

The Obama Bioeconomy will come to life after the Ag Department "increases the purchase of biobased products" under a program that originated in the 2002 farm bill. After mandating a 50% increase in products designated as biobased, "items like paints, soaps and detergents . . . are developed from farm grown plants, rather than chemicals or petroleum bases." This, the president says, "will drive innovation and economic growth and create jobs at marginal cost to the American public."

You can't make this up. On the other hand, that's the point: You can make this up, and then sell it, or try to sell it, as An Economy Built to Last.

The announcement Tuesday of the impending Bioeconomy was of course overwhelmed that day by the president's White House speech celebrating Congress's one-year extension of his payroll tax cut. This was the biggest economic policy event in Washington the past two months. The president himself announced the payoff for the American people: "It means $40 extra in their paycheck." Sounds real, but barely.

Moments later, he drew attention to an initiative "we passed" that will "create jobs by expanding wireless broadband and ensuring that first responders have access to the latest lifesaving technologies." When Newt makes claims like this, he's nuts; with Barack Obama, it's a vision.

A cynic might argue that none of these pretend ideas for reviving a $15 trillion economy in the second term matters much because the lasting damage was done in the first term, with ObamaCare's redo of the health sector—16% of the economy—and Dodd-Frank, which even the bureaucrats asked to write things like the Volcker Rule admit they can't figure out.

A cynic might say further that much of what Mr. Obama is outputting from his laptop for the next four years are pop-gun ideas or phantom tax policy. The Buffett Rule will never become a real law. On Wednesday Mr. Obama proposed an array of corporate tax changes—some up, some down—but as the reporting noted repeatedly, with virtually "no specifics." Ctrl-Alt-Delete. The scheme to revive manufacturing—taxes overseas that are reprogrammed into domestic hires—would challenge even Sim City's programmers.

Cynical resignation and a president living in a videogame economy aren't what the U.S. needs at this turn in history. The biggest burden on this week's two Republican front-runners, Rick Santorum and Mitt Romney, will be to describe—in detail—what really happened to the U.S. economy the past three years. Against that reality, Mr. Obama will repeat until November that he wants an economy "where everyone plays by the same set of rules." If he's writing them, it may not compute.

Write to henninger@wsj.com

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Obama fails to deliver on deficit promise

FEBRUARY 23, 2012

Now that President Obama has gotten the platitudes out of the way, let’s see the real budget — one that combines necessary fiscal discipline with selected spending that will move the United States forward.

The spending end of his budget shows vision on the latter. His $3.8 trillion proposal also claims to reduce the deficit in the short run, assuming it is based on numbers that even come close to reality — a broad assumption; this is politics — and also cut it as a percentage of the gross domestic product within five years. But the national debt would continue to grow to $19.2 trillion by 2022. That’s the wrong direction.

The budget aims to increase spending for education, job creation and infrastructure improvements, all of which are connected on some level. He is right that we cannot “cut our way to growth” and that we must not allow our roads, bridges and institutions to deteriorate. But …

Obama promised to cut the deficit in half by the end of his first term, a promise this budget does not keep. It does cut the deficit to $901 billion next year and to $612 billion by 2017 (down from this year’s projected $1.3 trillion). His budget aims to do that in part by raising taxes, especially on people with the highest incomes.

In a column published below, Washington Post columnist Dana Milbank calls it a nonstarter — even Senate Democrats, who sit in the majority in that chamber, are balking. Republicans, pushing back against anything that could be construed as a tax increase, have effectively declared the plan dead on arrival.

Critics have a point that Obama’s budget recommendation is more than likely a campaign platform than a spending proposal with a realistic chance of getting through Congress. The Republican budget effort, led by Rep. Paul Ryan of Wisconsin, may have more than a hint of election-season flavor, too, and neither is likely to stand much chance of passage as written.

The budget fight promises to be contentious, pitting Republicans’ stated mission to slash government spending — the consequences of which would fall hardest on the lower and middle classes — against Democratic pressure and widespread public support for measures to increase taxes on the wealthiest Americans. Neither side has shown willingness to consider the reality that reducing the debt will take a combination of spending cuts and new revenue, including possible tax increases or expiration of President George W. Bush’s tax cut for the wealthy.

And there has been little if any movement toward meaningful debt-reduction talks since the issue came to a head last year over Obama’s proposal to increase the debt ceiling. A similar confrontation looms just around the corner.

The Bowles-Simpson commission provided a road map for cutting the debt, even if almost every American might have found something unpalatable in it. But this was a serious attempt to address a problem that, uncorrected, will pose a real risk to our economic and, possibly, national security. We may not be Greece, but we got a wake-up call when Standard & Poor’s downgraded the U.S. credit rating last year.

In an election year, when Republicans’ No. 1 goal is to make Obama a one-term president and his goal is to win another four years in the White House, it’s hard to imagine that any progress is possible.

In a small step in the right direction, it does appear that House and Senate negotiators have reached a compromise on extending the payroll tax. It would be good to see that cooperation extend into other areas where the two sides share some common ground.

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18 Statistics That Prove That The Economy Has Not Improved Since Barack Obama Became President

FEBRUARY 20, 2012

Has the economy improved since Barack Obama became the president of the United States?  Of course not.  Despite what you may be hearing in the mainstream media, the truth is that when you compare the U.S. economy on the day that Barack Obama was inaugurated to the U.S. economy today, there is really no comparison.  The unemployment crisis is worse than it was then, home values have fallen, the cost of health insurance is up, the cost of gas is way up, the number of Americans living in poverty has soared and the size of our national debt has absolutely exploded.  Anyone that believes that things are better than they were when Barack Obama was elected is simply being delusional.  Yes, things have stabilized somewhat and our economy is not in free fall mode at this point.  But don’t be fooled.  This bubble of false hope will be short-lived.  The problems we are seeing develop in Europe will erupt into another full-fledged global financial crisis and economic conditions in the United States will get even worse.  When that happens, what possible ” economic solutions” will Barack Obama have for us?  We never even came close to recovering from the last great financial crisis, and now something potentially even worse is staring us in the face.  This is not a great time to have a total lack of leadership in Washington.

The following are 18 statistics that prove that the economy has not improved since Barack Obama became the president of the United States….

#1 Today there are 88 million working age Americans that are not employed and that are not looking for employment.  That is an all-time record high.

#2 When Barack Obama was elected, the percentage of unemployed Americans that had been out of work for more than 52 weeks was less than 15%.  Today, it is above 30%.

#3 There are 1.2 million fewer jobs in America today than there were when Barack Obama was inaugurated.

#4 When Barack Obama first took office, the number of “long-term unemployed workers” in the United States was approximately 2.6 million.  Today, that number is sitting at 5.6 million.

#5 The average duration of unemployment in the United States is hovering close to an all-time record high.

#6 During the Obama administration, worker health insurance costs have risen by 23 percent.

#7 Since Barack Obama has been president, the average price of a gallon of gasoline in the United States has increased by 90 percent.

#8 Since Barack Obama has been president, home values in the United States have declined by another 13 percent.

#9 Under Barack Obama, new home sales in the U.S. set a brand new all-time record low in 2009, they set a brand new all-time record low again in 2010, and they set a brand new all-time record lowonce again during 2011.

#10 Since Barack Obama took office, the number of Americans living in poverty has risen by more than 6 million.

#11 Since Barack Obama entered the White House, the number of Americans on food stamps has increased from 32 million to 46 million.

#12 The amount of money that the federal government gives directly to Americans has increased by 32 percent since Barack Obama entered the White House.

#13 According to the U.S. Census Bureau, the percentage of Americans living in “extreme poverty” is now sitting at an all-time high.

#14 When Barack Obama first took office, an ounce of gold was going for about $850.  Today an ounce of gold costs more than $1700 an ounce.

#15 Since Barack Obama became president, the size of the U.S. national debt has increased by 44 percent.

#16 During Barack Obama’s first two years in office, the U.S. government added more to the U.S. national debt than the first 100 U.S. Congresses combined.

#17 During the Obama administration, the U.S. government has accumulated more debt than it did from the time that George Washington took office to the time that Bill Clinton took office.

#18 The U.S. national debt has been increasing by an average of more than 4 billion dollars per daysince the beginning of the Obama administration.

Oh, but Barack Obama is promising that things will be much better very soon.  Barack Obama is pledging that 2 million more jobs will be added to the economy in 2012.

Do you believe him?

Congress certainly seems to think that things will be getting better.  Congress has reduced the maximum amount of time that the unemployed can receive unemployment benefits to 73 weeks.  That change will go into effect later this year.

But there are still millions of very talented Americans that cannot find work after years of looking.

So what are they supposed to do?

A recent Business Insider article featured the story of Helen Hatat, a woman from southern California that has been unemployed since 2009….

She lost her job in public relationships in 2009 after more than 20 years of working in the entertainment industry, the Southern California resident said.

“When you don’t have a job, you don’t find a job, and when you don’t have a job, you don’t find a home,” she said.

At first she tried moving into a homeless shelter, but left because they treated her “like garbage.” Eventually she found a friend she could stay with, but this arrangement won’t last forever.

“I’ve found you lose most of your friends, you know. If you have money people love you. If you don’t have any money people hate you. They treat you like you are contagious.“

As government finances get tight, things are going to get really tough for women like her.

When evaluating the health of the American economy, the key is not to focus on the short-term economic numbers.  Sometimes they go up and sometimes they do down.

Instead, the key is to look at the long-term balance sheet numbers.  When you do that, it quickly becomes apparent how appalling our economic decline has been.

The size of federal government debt is exploding, state and local governments all over the country are drowning in debt, our collective national wealth is decreasing and our ability to produce new wealth is also being reduced as our economic infrastructure is systematically gutted.

Of course all of the blame should not go to Obama.  The truth is that the Federal Reserve has much more power over the economy than Obama does.  But the American people are constantly told that the Federal Reserve is “not political” and that we should not criticize the Fed.

So it is kind of ridiculous that presidents are judged by the performance of the economy.  Yes, Bush, Clinton, Bush and Obama have all greatly contributed to the mess that we are in, but they are not solely responsible for it.

In the end, however, the outcome of the next presidential election will probably be very heavily influenced by how the U.S. economy performs during the rest of 2012.

Sadly, as our economy declines it is bringing out the worst in many Americans.  For example, “sugar daddy” websites are absolutely exploding in popularity.  Young women that are hungry for cash are selling their “services” to sick older men who are willing to finance the lifestyles of these desperate young women in exchange for “companionship”.

The following comes from a recent article in The Independent….

In America’s booming online dating market, few sectors are hotter than so-called “sugar daddy” sites, which help rich men to make “arrangements” with attractive and financially needy younger women. Between them, these specialist sites now account for 10 percent of the entire industry. That’s no small beans, given that in the US the online dating business now generates profits estimated at $700m ($442m) per year and, according to the polling firm GlobeSpan, has helped just over one in five Americans to find their life partner.

As the economy gets even worse, millions upon millions of Americans are going to become extremely desperate and will do things for money that they never dreamed that they would do.

That is a very frightening thing.

America is changing, and not for the better.

You better get ready for what is ahead, because Barack Obama is not going to save you.

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Government Pays $600 Million to Dead People, Knew About it Since 2005

by dogwings@inbox.com (All American Blogger)

In 2005, an Inspector General report was released that showed the government paying out millions of dollars to dead people.
The government, which President Obama says will trim the deficit by eliminating wasteful spending, shrugged it off.  The payments continued to the tune of $600 million:

In one case, the son of a beneficiary continued receiving payments for 37 years after his father’s death in 1971. The payments — totaling more than $515,000 — were only discovered when the son died in 2008.
The government has been aware of the problem since a 2005 inspector general’s report revealed defects in the Civil Service Retirement and Disability Fund. Yet the improper payments have continued, despite more than a half dozen attempts to develop a system that can figure out which beneficiaries are still alive and which are dead, the report said.
“It is time to stop, once and for all, this waste of taxpayer money,” it said.
Office of Personnel Management spokesman Edmund Byrnes said he could not immediately comment on the findings. But the report said OPM Director John Berry agrees that stopping the improper payments should be a priority.

When shown a report that highlights millions in waste, nothing is done.  Yet we are supposed to accept Obama’s deficit reduction numbers when they include savings from improving government efficiency.
Not only does this need fixed, but those benefiting from this fraud need prosecuted.
Then, bring in a private company to design a system that will eliminate the waste.  Maybe even turn it over to them, rather than let the shiftless bureaucrats shelve their ideas until the next guy gets there.



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