By Ed Morrissey
The economy took a small step back from its previous quarter, the Commerce Department reported today, with GDP up 3.2% in Q4. Overall, 2013 also took a big step back from 2012, however, even if it appears that the momentum may have shifted a bit toward the end of the year. The advance estimate of fourth-quarter growth dropped a bit from Q3′s 4.1%, but the inventory expansion factor lessened considerably as well:
Real gross domestic product — the output of goods and services produced by labor and property located in the United States — increased at an annual rate of 3.2 percent in the fourth quarter of 2013 (that is, from the third quarter to the fourth quarter), according to the “advance” estimate released by the Bureau of Economic Analysis. In the third quarter, real GDP increased 4.1 percent.Year on year, the story looks more grim:
The Bureau emphasized that the fourth-quarter advance estimate released today is based on source data that are incomplete or subject to further revision by the source agency (see the box on page 4 and “Comparisons of Revisions to GDP” on page 5). The “second” estimate for the fourth quarter, based on more complete data, will be released on February 28, 2014.
The increase in real GDP in the fourth quarter primarily reflected positive contributions from personal consumption expenditures (PCE), exports, nonresidential fixed investment, private inventory investment, and state and local government spending that were partly offset by negative contributions from federal government spending and residential fixed investment. Imports, which are a subtraction in the calculation of GDP, increased.
The deceleration in real GDP in the fourth quarter reflected a deceleration in private inventory investment, a larger decrease in federal government spending, a downturn in residential fixed investment, and decelerations in state and local government spending and in nonresidential fixed investment that were partly offset by accelerations in exports and in PCE and a deceleration in imports.
Real GDP increased 1.9 percent in 2013 (that is, from the 2012 annual level to the 2013 annual level), compared with an increase of 2.8 percent in 2012.We lost significant ground again, in an economy that’s supposed to be recovering. This throws a big dash of cold water on Obama’s State of the Union bragging about his economic policies.
By Amy Payne
Congress is very fond of two things: throwing a bunch of stuff into one bill and rushing bills through while Americans are focused on other news. While people were talking about the State of the Union, they’ve done it again with the $1 trillion farm bill.
The “farm bill” passed by the House yesterday has projected costs that are even greater than those of the Obama stimulus, and about 80 percent of the bill is just food stamps.
The bill is filled with special handouts to agriculture special interests and is a model of central planning. When it comes to food stamps, the bill is just as bad.
Food stamps should go to those truly in need. So it may surprise you to learn that you can qualify for food stamps even if you have millions in the bank. The new farm bill does nothing to address this absurd loophole.
A loophole like this undermines the legitimacy of the program and certainly does nothing to help people who really need help.
Food stamp recipients also aren’t required to work—a disservice to them and to the taxpayers who are assisting them. A work requirement empowers people, as we have seen with welfare reform.
So the food stamp program, with plenty of encouragement from the Obama Administration, has grown far beyond what it was supposed to be. Heritage expert Daren Bakst reports that “food stamp spending has quadrupled since [fiscal year] 2000 and doubled since 2008.”
The food stamp issue is not just about numbers. It’s about policy reform—developing policy that empowers Americans instead of creating a dependency that harms them.
Now this food stamp—er, farm—bill disaster goes to the Senate.
By Daren Bakst
Every five years, Congress takes a holiday from the principles that made this country great and turn to central planning policies that were in vogue in 1933. This nightmare holiday is the farm bill.
Right on cue, the current House passed a nearly $1 trillion farm bill Wednesday that puts faith in Washington, DC and disrespects the farmers and ranchers who actually make agriculture the booming industry that it is today. The policies put forward are just a continuation of the status quo, or worse, and an important procedural step to separate food stamps from farm programs inexcusably may not happen.
Real reforms in any negotiated bill are unlikely because of the substance of both the House and Senate bills. These bills maintain the central planning policies and government handouts that have characterized agricultural policy for too long now.
No program captures the farm bill's central planning better than the sugar program. The program controls supplies by limiting how much sugar that processors can sell each year and by import restrictions that reduce the amount of imports. This has led to domestic sugar prices that have generally been at least double world prices for decades.
In any other context, most legislators would find such government interference in the marketplace to be shocking. If there were a proposal for the government to control the candy supply to help candy companies, such a proposal would rightfully be mocked. Yet, even some legislators who claim to be in favor of free markets have turned a blind eye to the centrally planned programs in the farm bills.
The government handouts remain as generous as ever in the House and Senate farm bills. Even modest reforms have been completely ignored. For example, many farm programs have a cap on the amount of subsidies that can be received.
However, the largest farm program, crop insurance, has no such cap. Taxpayers subsidize about 62 percent of the premiums for farmers. According to the Government Accountability Office, a modest $40,000 cap on premium subsidies in 2011 would have saved taxpayers $1 billion and had no effect on the amount of subsidies received for 96 percent of participating farmers.
The negotiated farm bill may be worse than even feared. The very reason why such extremist central planning policies remain intact and reform never happens is because of farm bill politics. Ranking Member of the Senate Agriculture, Nutrition, and Forestry Committee, Senator Thad Cochran (R-MS), has argued that the farm bill should include food stamps "purely from a political perspective. It helps get the farm bill passed." Many legislators, who otherwise would seek reform, vote for the farm bill because they want to get food stamps passed, and vice versa.
Food stamps account for about 80 percent of the farm bill spending. The House bill took a critical step by reauthorizing food stamps and farm programs for different periods of time. The purpose was to ensure that in the future that these two distinct programs would be considered on their own merits in different bills. This separation would at least make it more likely that there would be reform in the future. Certainly, there needs to be substantive reform, but separation was an important step to achieving that goal.
The public overwhelmingly supports separation, and there's diverse support for separation in the media, from The Washington Post to The Wall Street Journal. Representative Marlin Stutzman (R-IN) led a group of 27 House members who sent a letter to the farm bill conferees expressing strong support for separation.
This current farm bill debate is the time for legislators to remember that centrally planned policies and massive handouts are bad policy for agriculture just as it is for any other sector of the economy. The government can no more properly plan the sugar market than it can plan the computer market. This free market principle doesn't change simply because agriculture is involved.
By Thomas Lifson
...Sen. Cruz asks Attorney General Holder, "I would call upon you to carry out the tradition of independence that attorneys general have honored that office with for centuries and protect the integrity of the Department of Justice, given the political sensitivities, given the fact that individual citizens believe they are being persecuted by the Department of Justice for partisan reasons. It would further Justice and further the integrity of the Department of Justice for you to appoint a special prosecutor with a meaningful degree of independence to investigate and find out what happened, and I would suggest that any special prosecutor should have integrity beyond reproach, and not be a major Obama donor."
General Holder responded, "I don't think that there is a basis for us to conclude on the information as it presently exists that there is any reason for the appointment of the independent counsel...The notion that somehow this has caused a loss of faith in this Justice Department is inconsistent with the facts."
With the cooperation of the media, which regards lane closures on a bridge as more important than the suppression of political opposition by the federal government's most feared agency, Holder and his boss plan to run out the clock, simply delaying any real investigation. The facts of the lackluster investigation are damning on their face - few if any victims have yet been interviewed. Obama and Holder feigned outrage when the scandal came to light, and should be held to their words by every GOP politician.
It is time to demand -- over and over again -- a Special Prosecutor. If Cruz runs for president, he can make a promise to appoint a Special Prosecutor part of his platform -- assuming the IRS hasn't harrassed Tea Party groups out of existence by 2016.
By Thomas Lifson
Yesterday was a bad, bad day for the Attorney General of the United States. Senator Mike Lee twice asked Eric Holder to explain the constitutional basis of President Obama's executive orders suspending parts of Obamacare, and the AG fumbled badly, essentially claiming the dog ate his homework. Joel Gehrke of the Washington Examiner:
Attorney General Eric Holder couldn't explain the constitutional basis for executive orders such as President Obama's delay of the employer mandate because he hasn't read the legal analysis -- or at least, hasn't seen it in a long time.
"I'll be honest with you, I have not seen -- I don't remember looking at or having seen the analysis in some time, so I'm not sure where along the spectrum that would come," Holder replied when Sen. Mike Lee, R-Utah, asked him to explain the nature of Obama's constitutional power to delay the mandate.
Lee had based his question on a standard legal test, first described by Supreme Court Justice Robert Jackson, who said the president's authority to issue executive orders is strongest when he does so with the backing of Congress (category one), more dubious when he issues an order pertaining to a topic on which Congress has not passed a law (category two), and weakest when the executive order is "incompatible with a congressional command" (category three), to use Lee's paraphrase.
Holder assured Lee that Obama's team accounts for Jackson's three-part analysis, but said he couldn't use that test to explain in any detail what kind of authority the president wielded when he delayed the employer mandate.
...John Hinderaker of Powerline comments:
This is a very serious matter. For a president to issue orders for which he has no constitutional authority is the gravest possible abuse of his office. And Holder's assurance that President Obama prefers to "work with Congress," and only issues executive orders when he can't get his way by "working with Congress," is itself outrageous. Congress has the power to enact legislation; the president does not. If Congress chooses not to enact a law that the president wants, that does not empower the president to legislate via executive order.
The Poison of Postmodern Lying
When truth is relative, political expediency becomes the truth.By Victor Hanson Davis
...In the gospel of postmodern relativism, what did it matter if the president of the United States promised that Obamacare would not alter existing health-care plans when it was clear that it would? Instead, the good intentions of universal health care are the only truth that matters.
For that matter, the “law” that requires a president to enforce legislation passed by Congress is likewise a construct. If ignoring bothersome laws — whether the individual mandate and timetable of Obamacare, or federal immigration law — serves a greater social justice, then such dereliction also becomes “truth.” Blindly enforcing legalistic details of the law that are deemed no longer in the interest of the people would be the real lie, or so the reasoning goes.
...Part of old America still abides by absolute truth and falsity. A door is either hung plumb or not. The calibrations of the Atlas rocket either are accurate and it takes off or inaccurate and it blows up. Noble intentions cannot make prime numbers like five or seven divisible.
But outside of math and science, whose natural truth man so far cannot impugn, almost everything else in America has become “it depends.” Admissions, hiring, evaluations, autobiographies, and the statements of politicians and government officials all become truthful if they serve the correct cause — and damn any reactionary discrepancies.
To paraphrase George Orwell, everything is relative, but some things are more relative than others.
By Lachlan Markay
President Barack Obama praised Costco, whose founder and former chief executive has raised millions for the president and hosted him for fundraisers at his palatial Seattle home, in a Wednesday speech at a Costco store.
Touting the supposed benefits of a federal minimum wage hike, Obama said, “Business leaders today, some of them understand this same concept. Costco’s CEO, he understands this.”
He went on to laud the company’s “commitment to fairness.”
Jim Sinegal, Costco’s former CEO, is a long-time supporter of the president and the Democratic Party.
He hosted two high-dollar fundraisers for Obama at his home in Hunts Point, WA, a wealthy waterside enclave near Seattle. They reportedly brought in $2 million for the president’s reelection effort.
Sinegal received a speaking slot at the Democratic National Convention a month later, where he proclaimed that Obama was “making an economy built to last.”
Sinegal himself has donated more than $800,000 to Democratic candidates, committees, and interest groups, including more than $11,000 in contributions to Obama and $35,000 to the Obama Victory Fund.
He’s given a mere $500 to a single Republican, former Indiana Sen. Dick Lugar.
His wife, Janet Sinegal, has made nearly $300,000 worth of political contributions, all to Democratic candidates and groups.
Some see Sinegal’s financial support for Obama and the president’s rhetorical support for Costco as mutual back scratching.
“This is Obamanomics,” wrote Washington Examiner columnist Tim Carney last year “If you’re cozy with government, your business gets plenty of help.”
By Bill McMorris
....The vast majority of retailers do not share Jelinek’s optimism about the economic benefits of increased labor costs. The National Retail Federation, the nation’s largest retail trade association, said that the president’s minimum wage agenda would translate to “minimum opportunities.”
“If you want to create minimum opportunities, then raise the minimum wage,” NRF President Matthew Shay said in a press release. “We welcome the president’s focus on the economy and jobs, but a minimum wage hike runs counter to that goal.” “Raising the minimum wage would place a new burden on employers at a time when national policy should be focused on removing barriers to job creation, not creating new regulations or mandates. It’s simple math—if the cost of hiring goes up, hiring goes down.”
Shay added that the president’s agenda was a solution in search of a problem since only 5 percent of retail workers earn the minimum wage and many of them will see their wages increase as they gain more experience.
“It’s really a starting wage that allows teenagers or others with little job experience to enter the workforce,” he said. “A mandated hike in labor costs would negatively impact businesses that employ people in entry-level jobs and ultimately hurt the people it is intended to help.”
Saltsman said that President Obama’s attempt to force all retailers to adopt Costco-esque pay policies would have a negative effect on other retailers that operate on different business models. A key factor to Costco’s profitability, for example, is the fact that the retailer does not employ as many people as its competitors.
“Costco is able to offer lower prices and better values by eliminating virtually all the frills and costs historically associated with conventional wholesalers and retailers, including salespeople, fancy buildings, delivery, billing, and accounts receivable,” Costco co-founder and DNC speaker Jim Sinegal said. “We run a tight operation with extremely low overhead which enables us to pass on dramatic savings to our members.”
By Matt Towery
....While state, county and municipal governments all seemed helpless, public citizens took matters into their own hands. As government stumbled, one person on Facebook formed a site known as "SnowedOutAtlanta" where stranded citizens could post their desperate needs and others near them could offer to provide shelter, food or even come to their rescue. Within hours, tens of thousands had joined in the effort. It was an amazing testament to what big government can't do and what "we the people" can get done.
Ironically, this was all taking place as President Obama was threatening Congress, in his State of the Union Address, to use executive powers to get around them to expand government even more. While many Atlantans remained stuck in cars as the sun rose on Wednesday, Obama was off on a tour of other states touting his newest big government gimmicks.
Meanwhile, Georgia's incumbent Republican Gov. Nathan Deal and Atlanta's Democrat Mayor Kasim Reed were holding disastrous press conferences in which Reed was openly combative with reporters and Deal seemed mixed up on his meteorology and what the warnings actually were for the storm.
Perhaps the worst of this political theater came when Georgia's director in charge of emergency response, in front of his boss, told the press that an emergency had yet to emerge Tuesday afternoon as vehicles were stalling and colliding all over the place. That sent Georgia's governor racing to the microphones to disagree with his own director, who clearly let his leader down.
No doubt the political finger pointing will continue for weeks, if not months to come. And for Deal, who faces a reelection challenge from the grandson of former President Jimmy Carter, state Sen. Jason Carter, the timing could not be worse.
To their credit, both Reed and Deal ultimately apologized for various aspects of the response to the storm. And to be fair, because of the area's unusual location and weather patterns, Atlantans are often given dire predictions of winter weather, only to learn at the last moment that not a single flake of snow will fall.
The lesson learned from this episode, which will likely cost a fortune in insurance claims, out-of-pocket expenses and costs for government efforts at responding, is that we should never fully rely on government to solve all of our problems.
In the case of Atlanta, the official storm warning was issued long before daybreak on Tuesday. Corporations, schools and government entities could have simply said "stay home." They did not.
So once a crisis arose, private citizens did what government could not. They rolled up their sleeves quickly, used modern technology and with caring hearts took on Mother Nature's mess.
No speeches were made. No staff or palace guards stood between those in need and those who wanted to help. And no taxes were required.
Once again, it was individual citizens who saved the day.
A mindset that's killing our economy
....But I'll share a recent personal experience with the government that still managed to shock me. And I think it captures well the magical thinking at the heart of our national dysfunction.
A relative of mine is in her senior years now without any savings to lean on. (By the way, that puts her in the company of 22% of US seniors over 65. In fact, a shocking 4 out of 5 of all U.S. working households have retirement savings totaling less than one year's worth of income – so it looks like there will be many more in her situation soon)
There's no way to sugar-coat her financial condition. She's in a tough situation with limited options. But we're doing what we can to support her.
Which led my ears to perk up when a friend suggested there may be a relatively easy way to boost her monthly Social Security payment. It turns out that, despite being divorced for over 40 years from her former husband, she can claim a portion of his Social Security benefits. If you were married for over 10 years, the government allows this.
Okay, I thought. Good for her. But what about her ex-husband? I doubt he's going to be happy seeing a drop in his Social Security check, and even less happy learning that it's because the government decided to give the difference to someone he divorced four decades ago.
But here's the thing that bowled me over: His doesn't drop.
The government makes it clear that if a divorced spouse is awarded any claim to your Social Security benefits, the benefits you receive remain untouched. From the SSA.gov website:
Note: The amount of benefits your divorced spouse gets has no effect on the amount of benefits you or your current spouse may receive.As the one investigating this opportunity, I spent a day on the phone with the Social Security Administration, and, sure enough, that's the way it works.
I couldn't help asking the nice folks at the SSA: Who funds this? Where does this extra money come from?
In theory, the Social Security trust fund is a kitty paid into by workers as they earn income during their lifetime. (In practice, we know the kitty is empty, having been raided by politicians for decades). In this case, the ex-husband worked for a certain number of years and had a certain amount of his income directed into Social Security to finance the payments he would later receive in retirement. Payments that he now is, in fact, receiving.
So, if the government later decides that his ex-spouse should also get a check based on his years of employment, but no extra hours were worked to fund that second check, how does that math work?
Well, as probably comes as no surprise, math doesn't factor into the answer I received. "It's just how the system is set up" I was told. "The government comes up with the money."
And that – to me – succinctly sums up why we deserve the economic predicament we find ourselves in: too many of our leaders and too much of the populace look at the government as a perpetual font of money. The curiosity to ask the questions: Is this sustainable? Is this wise? isn't there. Either because we're too lazy or too fearful to learn the answers.
For the record, I did prod further into how such a payment system could remain solvent. But it was clear to me that, not only was this a strange question to the folks I was asking it of, but it was something they had never even thought about before. It didn't take very long before they conceded that it probably doesn't make sense, but folks who qualify for the extra money would be crazy not to take it.
In the end, my family member did qualify. But not for very much. (There were uncommon exceptions that ended up reducing her claim)
And while I understand why she feels the need to take the money, I'm conflicted about my role in the affair. Because it's this very behavior of treating the government like a free money ATM (or a benevolent uncle with a bottomless wallet – use whatever analogy you like) that's ruining us.
By Guy Benson
Andrea Mitchell is an MSNBC host, and her politics fall accordingly. But from time to time, NBC News trots her out as a straight journalist, often with predictable results. Mitchell's official title with the network is "Chief Foreign Affairs Correspondent," which makes this little analytical morsel even more mind-numbing:
“Up until that moment, Iran was cooperating with the United States on the border of Afghanistan, post 9/11. Iran was more or less an American ally but being included in the Axis of Evil, it turned the Iranian government in a completely different direction and it was a turning point in American politics and foreign policy.”Got that, America? The Iranian mullahs were practically blowing us kisses until Cowboy Bushie McStupid recklessly included them in the 'axis of evil' with Iraq and North Korea. The degree of historical ignorance here is stunning, especially given this woman's alleged expertise. The US hasn't operated an embassy in Tehran since the 1979 revolution. Perhaps Andrea has heard something about the unpleasantness that followed. There was even a hit movie made about it -- recently, no less! Iran is the world's top exporter of international terrorism. They've helped murder US soldiers in Iraq. Their satellite organization in Lebanon has made a habit of terrorizing Israeli civilians. Iran teamed up with Al Qaeda to help train jihadists, playing a major role in the 1996 Khobar Towers bombing, as well as the twin 1998 US embassy attacks in East Africa. The Iranian regime denounces the Unites States as the "Great Satan," has been pursuing an illegal nuclear weapons program for years, is committed to the destruction of Israel, and massacres its own people.
I'll leave you with Allahpundit offering a slightly more charitable take on Mitchell's commentary. Slightly:
The point she’s trying to make here, in her own doofy way, is that the U.S. and Iran had a few shared interests after 9/11. America was about to invade Afghanistan and smash a bunch of Sunni fundamentalists; the great Shiite power next door obviously had reason to keep an eye on the border as it happened, whether to stop fleeing refugees/jihadis or simply avoid pissing off a very angry, wounded superpower. Besides, we were already thinking of hopping across their other border and smashing their archenemy Saddam. Better to lie low and play nice for awhile to keep that plan on track, they must have thought. In reality, though, Iran was already sheltering top members of Al Qaeda by the time Bush delivered his “axis of evil” line...
The punchline here is that, more than a year after the “axis of evil” line that Mitchell thinks dissolved the burgeoning U.S./Iran alliance, Iranian operatives reached out to Washington with an offer of a “grand bargain.” End sanctions, guarantee Iran’s security, and formally recognize the regime, the offer read, and Iran would be willing to make major concessions on terrorism and nukes. Needless to say, they didn’t float that offer because they missed their old “ally;” they floated it because they were terrified that Bush might squash Saddam and then decide to roll on to Tehran. America rejected the proposal, concluding that Iran’s “moderate” president either wouldn’t or couldn’t deliver on his promises.
By Anthony Deutsch
Syria has given up less than five percent of its chemical weapons arsenal and will miss next week’s deadline to send all toxic agents abroad for destruction, sources familiar with the matter said on Wednesday.
The deliveries, in two shipments this month, to the northern Syrian port of Latakia totaled 4.1 percent of the roughly 1,300 metric tons of toxic agents reported by Damascus to the Organisation for the Prohibition of Chemical Weapons (OPCW), said the sources, who spoke on condition of anonymity.
The internationally backed operation, overseen by a joint OPCW-United Nations mission, is now 6-8 weeks behind schedule. Damascus needs to show it is still serious about relinquishing its chemical weapons, the sources told Reuters.
U.N. Secretary-General Ban Ki-moon said in a report to the Security Council this week that shipments had been unnecessarily delayed and urged the government of President Bashar al-Assad to speed up the process.
Intel Chairman: White House Must ‘Strongly Confront’ Russia Over Apparent Violation of Nuclear Treaty
By Bridget Johnson
The chairman of the House Intelligence Committee said Russia’s apparent violation of the Intermediate Nuclear Forces Treaty could thrust relations with the former Soviet Union back toward the Cold War era.
The New York Times cited anonymous U.S. officials as saying Russia has been testing medium-range nuclear missiles since 2008. Washington has reportedly brought up the issue with Russia several times and is now taking its concerns over compliance to NATO.
...The report would mean that Russia was testing the ground-launched cruise missile in potential defiance of the treaty when Obama lobbied the Senate hard to ratify the New START Treaty in 2009 despite lawmakers’ concerns about Russia and the administration’s attitude toward the U.S. stockpile.
Lawmakers in both chambers have spent much energy since the suspicions came to light in 2012 pressing the administration on why it wasn’t taking the apparent violations more seriously.
“Since October, we have written to you twice with our concerns about a massive Russian violation and circumvention of an arms control obligation to the United States of great significance to this nation and to its NATO allies,” Rogers and House Armed Services Committee Chairman Buck McKeon (R-Calif.) wrote in an April letter to Obama. “Briefings provided by your administration have agreed with your assessment that Russian actions are serious and troubling, but have failed to offer any assurance of any concrete action to address these Russian actions.”
A November article in Pravda claims that the Russian Foreign Ministry “notified the Americans in accordance with adequate procedures” before the test of the RS-26, an ICBM that has also been tested at medium range. Deputy Prime Minister Dmitry Rogozin called the missile a “killer of U.S. missile defense.”
The U.S. government is keeping tens of millions of dollars flowing to Afghanistan despite a pair of private audits that found Afghan ministries could not properly account for the funds, according to a pointed watchdog report released on Thursday.
The lengthy study from the Special Inspector General for Afghanistan Reconstruction revealed the audits produced 696 recommendations, with 41 percent labeled as "critical" or "high risk." The U.S. agency administering the funds, USAID, worked to address some of these -- but despite concluding it would not approve direct aid "under normal circumstances," the money continued to flow.
According to the report, USAID has committed just more than $1 billion to Afghanistan.
"The decision to continue with direct assistance seemingly conflicts with the 2012 congressional requirement, which mandates that funds be made available 'only if ... no level of acceptable fraud is assumed,'" the report said, adding that congressional oversight of the money is now "compromised."
The report doesn't point to specific wrongdoing with how money was spent, but rather glaring holes in the system that allow money to pour in with questionable accountability. Among the concerns were that the Ministry of Public Health was at risk of misspending cash due to the payment of salaries in cash, and that the mines and petroleum ministry risked paying higher prices "to finance kickbacks and bribes."