Best of the Week
Most Popular
1.Is the Stocks Bull Market Over? Dow Trend Forecast into End January 2015 - Nadeem_Walayat
2.Gold and Silver Stocks Apocalypse Now, Bear Market Review - Rambus_Chartology
3.NHS Baldrick Plan to Spread Ebola Across UK - Sheffield, Newcastle, Liverpool, London Hospitals - Nadeem_Walayat
4.Ebola Terror Threat Suicide Bio-Weapons Threatens Multiple 9/11's, Global Plague - Nadeem_Walayat
5.Second-Richest Man Says Mortgages Now a "No Brainer" - Dr. Steve Sjuggerud
6.Gold And Silver Still No End In Sight - Michael_Noonan
7.NHS Baldrick Plan to Spread Ebola Across UK - Sheffield, Newcastle, Liverpool, London Hospitals - Nadeem_Walayat
8.The Gold Bug is Set to Bite Back - EWI
9.How Alibaba Could Capitalize on the EBay-PayPal Split - Frank_Holmes
10.The Consequences of the Economic Peace - John_Mauldin
Last 5 days
The Similarities Between Germany and China - 21st Oct 14
The REAL Reason Why the Stock Market Turned Down - 21st Oct 14
Petrobras is a 'Scheme, Not a Stock' - 21st Oct 14
Stocks Bear Market Indicator Is Off the Mark - 20th Oct 14
Stock Market Ideal Turning Point is at Hand - 20th Oct 14
Investors Quit Complaining, The Environment is Perfect Right Now - 20th Oct 14
Ebola Armageddon Could Trigger a Rebirth in Gold and Silver Prices - 20th Oct 14
Gold vs Euro Risk Due To Possible Return of Italian Lira - Drachmas, Escudos, Pesetas and Punts? - 20th Oct 14
Stocks Rebounded Following Recent Sell-Off, But Will It Last? - 20th Oct 14
U.S. Responsible for West Africa Ebola Outbreak Says Liberian Scientist - 20th Oct 14
Stock Market Intermediate B Wave has Started - 20th Oct 14
Gold Stocks Analysis – FNV, CG, NCM, SBM - 19th Oct 14
Stock Market Primary IV Wave Counter Trend Rally - 19th Oct 14
Gold And Silver - Financial World: House Of Cards Built On Sand - 18th Oct 14
Anatomy of a Stock Market Sell-Off - 18th Oct 14
Why OPEC Has Declared an Oil War on Russia - 18th Oct 14
Gold and Silver Extreme Shorting Peaks - 18th Oct 14
Bitcoin Price Fall to $350? - 18th Oct 14
Tesco Supermarket Crisis Worse To Come as Customers Vanish! - 18th Oct 14
Sheffield Roma Crisis School Place Application's Fraud Perfect Storm - 17th Oct 14
Stock Markets, Commodities and Indicators - 17th Oct 14
“Save Our Swiss Gold ” - Game Changer For Gold? - 17th Oct 14
How to Trade the Ebola Stock Market Sell-Off - 17th Oct 14
When... Not if... Crude Oil Price Drops Below $70 - 17th Oct 14
Either You're The Butcher or You're The Cattle - 17th Oct 14
Gold Benefits from Market Uncertainty - 17th Oct 14
Stock Market Pullback Underway, Euro downside, Commodities - 17th Oct 14
Stock Market Seven Year Cycle and A Correction Ahead? - 17th Oct 14
Three Ways to Play Uranium: Top Stock Picks - 17th Oct 14
America Flirts With Deflation - 17th Oct 14
Why the Fed Should Consider Delaying the End of QE - 16th Oct 14
Gold Prices Since 9-11 - 16th Oct 14
The Inflation Imputation, Dear Saver, May You RIP - 16th Oct 14
Flight To Safety - Gold Rises As Stocks, European Bonds Sink - 16th Oct 14
The March Of History And The End Of Nations - 16th Oct 14
Stocks Bear Markets Move Fast and Are Intensely Emotional - 16th Oct 14
Stocks Got Their Piece – Now It’s Our Turn - 16th Oct 14
Why This Stock Market Selloff Is the Next "Buy the Dip" Opportunity in Stocks - 15th Oct 14
Possible Stock Market Runing Correction - 15th Oct 14
Get Your Tactics Ready for the Ebola Stock Market Event - 15th Oct 14
Secret Scheme To Manipulate Silver Price - Lawsuits Against Banks Proceed - 15th Oct 14
Stocks Bull Market Over? Trend Forecast to End Jan 2015 - Video - 15th Oct 14
Stock Market Dow The Contrarian Play - 15th Oct 14
The Ukraine, As We Know It, Is Gone Forever - 15th Oct 14
We Can Police the Dark Web / Bitcoin - 15th Oct 14
The Safest Stocks in the World - 14th Oct 14
Building an Ark: How to Protect Public Revenues From the Next Financial Meltdown - 14th Oct 14
9 Ways to Retire Rich - 14th Oct 14
Silver, Warfare and Welfare - 14th Oct 14
Swiss Gold Referendum “Propaganda War” Begins - 14th Oct 14
What Happened To The Fourth Estate? - 14th Oct 14
How To Blow Up OPEC In 3 Easy Steps - 14th Oct 14
Investment Myth - Wars are bullish/bearish for Stocks - 14th Oct 14
Powerful Reversal and Shakeout in the Junior Gold Mining Stocks at May Lows Around $33 - 13th Oct 14
When The Economy Went Ponzi - 13th Oct 14
Stock Markets Get Ugly – and May Be Getting Uglier - 13th Oct 14
Cycle Failures Point to a Stock Market Correction - 13th Oct 14
Bill Ackman: I'm not a Crybaby Shareholder - 13th Oct 14
U.S. and World Stock Markets Chartology - 13th Oct 14
Stock Market Intermediate Downtrend Confirmed - 13th Oct 14
Gold and Silver Price To Rally Or Not To Rally - 13th Oct 14
Is the Stocks Bull Market Over? Dow Trend Forecast into End January 2015 - 12th Oct 14
Has Obama Changed His Mind About Syria? - 12th Oct 14
New Zero Bound Only Game In Town - 12th Oct 14
The 5–Year U.S. Treasury Bond is Emblematic of Careless Risk Taking in Bond Markets - 12th Oct 14

Free Instant Analysis

Free Instant Technical Analysis


Market Oracle FREE Newsletter

Stocks Epic Bear Market

President Obama's State of the Union Address Fuzzy on Maths

Politics / US Politics Feb 14, 2013 - 02:51 PM GMT

By: Money_Morning

Politics

Martin Hutchinson writes: President Obama's State of the Union Address on Tuesday night was high on rhetoric but short on math.

As with most Obama speeches, it was beautifully delivered. However, even where I agreed with the ideas, I couldn't quell a nagging suspicion that the numbers simply didn't add up, and indeed likely missed by a lot.


And let's face it, some of the ideas in the speech were just plain bad.

The Bad Ideas
At the top of the list was the proposed increase in the minimum wage to $9 an hour. It's sounds nice, but reality is a different story.

Economists pretty much universally agree that high minimum wages have the opposite effect: They increase the ranks of the unemployed.

Now admittedly, $9 an hour isn't likely to increase unemployment in costly areas like New York City or coastal California.

New York City Comptroller John Liu has already sent me an e-mail complaining that $9/hour is equivalent to only $4.97 in his overpriced city.

But it will certainly push up joblessness in St. Louis, Houston or Cleveland, where living costs are lower than the national average.

Of course, Houston can look after itself with high oil prices and a decent local economy, but you can't tell me that a $9 an hour minimum wage won't increase unemployment in Cleveland or even St. Louis, let alone in rural areas.

It's a bad idea, which fortunately won't get far in a Republican Congress. But it wasn't the only one.

His insistence that Congress must immediately address global warming, and his threat to do so by executive action if it didn't, are deeply controversial.

The reality is that global warming "investments" have already cost U.S. taxpayers billions upon billions, with very little to show for it. In fact, the extra $12 billion of wind power subsidies tucked into the "fiscal cliff" deal-- one fifth of the first year's tax increases-- is just the latest example.

What's more, when you look at the Antarctic as well as the Arctic, and at the global climate as a whole, there's evidence that global warming has at least paused since 1998, and that even by 2100 it will be limited to the 1-2 degrees Celsius change that we can easily handle without subjecting ourselves to infinitely costly command-and-control policies.

The Good Ideas
But the President's speech wasn't all bad.

President Obama made a considerable amount of sense on education. In fact, Education Secretary Arne Duncan is one of his most impressive Cabinet members.

He does want to increase access to early childhood education, the problem with which is that studies seem to show the current program does little good.

Coming from a different education system, my main beef with U.S. K-12 education is how slowly it goes in the early years.

Without any special coaching in Great Britain, I started calculus at 11. Here in the states, my son didn't get to it until he was undergoing the tribulations of college applications as a high school senior - far too late for him to have the reliable grasp of it necessary in a modern economy.

However, Obama's better education idea is to combine high school education with community colleges, so that those graduating high school have a vocational qualification that makes them useful to local employers.

If nothing else, that makes them employable if their dream job flames out. I now regret that my son, educated within 200 yards of the giant Tyson's Corner mall, didn't get a qualification in Mall Management - something a modern economy can always use!

The Fuzzy Math
The main problem I have with the speech, however, is the cost of his proposals.

Obama said specifically "Nothing I'm proposing tonight should increase our deficit by a single dime."

Then during the speech he proposed:

■15 manufacturing innovation institutes;
■An Energy Security Trust for new energy research;
■A "fix it first" program for more infrastructure spending;
■A big expansion of early childhood education;
■Incentives to companies to hire the long-term unemployed;
■Tax credits to businesses that invest in low-income couples;
■New spending on combating cyber-attacks.

That's without counting initiatives like the minimum wage and more regulation that provide a drag on the economy but don't cost the government any money directly.

Put politely, his numbers don't add up.

Eager to find something to like, The Financial Times declared that a potential U.S.-EU free trade agreement was "the centerpiece" of the speech. But that's nonsense - it was in one sentence out of over 6,000 words. But it's still a good idea.

In the end, it was a well-delivered speech, and there were some good ideas in it I hadn't heard before.

But let's face it, the government's overall current priority must be to reduce the budget deficit, and Obama's package as a whole was a hindrance, not a help to that objective.

Source :http://moneymorning.com/2013/02/12/u-s-economy-recovery-doesnt-fool-struggling-americans/

Money Morning/The Money Map Report

©2013 Monument Street Publishing. All Rights Reserved. Protected by copyright laws of the United States and international treaties. Any reproduction, copying, or redistribution (electronic or otherwise, including on the world wide web), of content from this website, in whole or in part, is strictly prohibited without the express written permission of Monument Street Publishing. 105 West Monument Street, Baltimore MD 21201, Email: customerservice@moneymorning.com

Disclaimer: Nothing published by Money Morning should be considered personalized investment advice. Although our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. No communication by our employees to you should be deemed as personalized investent advice. We expressly forbid our writers from having a financial interest in any security recommended to our readers. All of our employees and agents must wait 24 hours after on-line publication, or after the mailing of printed-only publication prior to following an initial recommendation. Any investments recommended by Money Morning should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company.

Money Morning Archive

© 2005-2014 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

Free Report - Financial Markets 2014