Bankrupt California

It is depressing to think about California, my adopted home state.  Having spent my high school years there I fell in love with the state and the people I met there.  When I left to attend college in Tennessee I planned on returning, having experienced the hospitality and slower paced life of the south.

Then the economic crash of 2008 hit.  What few outside of California know is that California was headed down a recessionary path already.  High regulation, higher taxes, and some hair-brained elected officials believed they were on the right path (and they probably were in their own minds), but the recession accelerated the decline of the largest state in the Union.

Faced with this economic reality (unemployment numbers for my adopted home town’s county) and a girl I wanted to marry, I remained in Tennessee.  I think often of California and while I desire to return to the one of the world’s largest economic engines, I cannot return.  California is bankrupt.  Tax revenues are down, high income earners are fleeing, entrepreneurs, who can now start and grow profitable businesses anywhere, are fleeing or avoiding the state that boasts the likes of Apple, Google, Facebook, Twitter, and more.  California is pursuing ideas like a high speed rail that will surely lose as much money as the Amtrak line it mirrors, while destroying acres of profitable farmland in the process, revealing a bankrupt leadership unwilling to acknowledge simple realities, challenge the status quo, and lead.

Victor Davis Hanson reminded me of these thoughts today.  And I thought I would share them, and his work, with you today.

The Daily Show on the Debate

I cannot believe I missed this.  This is golden.  Warning:  It is the Daily Show.

The Daily Show on the Debate.

The Unemployment Rate

New broke in the middle of Friday morning that the unemployment rate had dropped from 8.1% to 7.8%, he lowest rate since President Obama took office.  Hooray!  Right?  It probably depends on which candidate you’re supporting for President.  Democrats are trumpeting this as proof that the President’s policies are working:  “We’ve made it back through the mess to where we started” has been the general refrain (James Taranto has one of my favorite tweets about this reaction).

I was surprised by the number.  I had heard through Twitter that economists expected the rate to remain at 8.1% or jump to 8.2% (less likely) and were not expecting a drop in the number.  So when it happened there was some immediate skepticism from the right about the legitimacy of the numbers.  Jack Welch, former CEO of General Electric, was one of the first to publicly express some doubts about the numbers.  He was promptly blasted by the MSM and praised by hard core government skeptic conservatives.  In order to give Jack Welch an opportunity to defend himself, please check out his interview with Chris Matthews, where he explains his opinion fully.

What then do we make of these numbers?  First, let us note that conservatives are skeptical of the government.  There are some who believe the government is evil, and liberals are quick to claim they represent the majority of those on the right in an effort to discredit them and the right’s attempts to contribute to media coverage.  Second, let us note that as President, President Obama has some power to influence things.  Jay Cost with The Weekly Standard went through a long list of past presidential election manipulation that is worth reading for the history lesson.  And the reminder that Presidents (and Congressmen) will do anything to preserve their jobs.  I point this out because we must remember the President, like any CEO, Congressman, salesperson or assembly line worker, is interested in keeping his job.  He may be more interested because his directly affects his public legacy unlike any other (think very quickly about your opinions of Jimmy Carter and George H. W. Bush, the last two presidents to lose their reelection campaign.  The public psyche assumes they were far lessor presidents that Reagan, Clinton, and George W. Bush because they failed to secure a second term).

Naturally, the Romney campaign has dived into the numbers and expressed skepticism in the validity of the numbers, stating simply “this is not what a real recovery looks like“.  The biggest surprise about the BLS report is the discrepancy between the two surveys they reference (and the reason the right is rolling their eyes at this).  Again, stated simply, The Household Survey showed a gain of 873,000 people employed in September – resulting in the surprise drop in the unemployment rate – while the Establishment Survey only showed a rise of 114,000 [people employed].” So one survey shows 114,000 new jobs added, and another showed 873,000 more people employed.  Throw in that this is the single largest drop in the unemployment rate in 29 years in a period of time when other economic indicators are showing stagnation across much of the economy, and you can queue the right’s head scratching and, honestly, I think it is completely legitimate.

The president will be trumpeting this for the next month, as he should, and Romney’s response is going to have to be strong.  He can state, simply and accurately, that the primary reason for this drop is workforce participation keeps dropping, and he is accurate.  How much of this is due to the retirement of elderly workers as the American workforce ages is up for debate (Federal Reserve Bank of Chicago says potentially as much as half).  Either way, Romney can argue the rate would be 8.5% is the same people were working now as in January of 2012, and that the rate would be around 10.7%.  It is a convincing counterargument if it is heeded, and only time will tell if it is.  The heat has been turned up.

Edit:  Just had this thought:  does this mean President Obama thinks he is vulnerable on the economy and unemployment rate?  I would argue yes.  Romney probably needs to keep the attacks up.

Debate Thoughts

Normally I do not like presidential campaign debates very much.  I think they’re designed for talking points and very little substantive discussion of ideas.  Because of this structure we pay way more attention to the theater of the debate and the overall campaign than I think is healthy and we end up awarding a victor based on feeling, look, body language.  All of these things matter, but not nearly as much as the ideas the candidates who carry these characteristics bring to the table.

That said, I loved the debate on Wednesday.  Jim Lehrer (God rest is soul for all of the crap he is getting for letting these men discuss ideas) actually let President Obama and Governor Romney discuss, argue, debate for crying out loud.  There was a very healthy back and forth allowing each candidate to attack their opponent’s ideas and defend himself from the same.  It was fantastic.  What is unfortunate is that this “style” was terrible for President Obama.  It has always been clear the President prefers to discuss things in a prepared statement, with carefully considered wording and a teleprompter to boot, and Democratic consultants and operatives spent much of the week before the debate trying to lower expectations for the President.  And they were right:  the President looked awful.  Theories abound about why the President performed so poorly (Al Gore’s is still my favorite), and you can see some of them here.

My own theories is this:  President Obama is a speaker, and in his vaunted speeches creates straw men and ruthlessly attacks them.  Without someone to defend his opponents position, the President can get away saying anything he wants.  Enter Mitt Romney, whose command of facts and figures (e.g., $90 billion hires 2 million teachers comment) and the President’s inability to defend himself gave the Governor a considerable advantage.

Why this aggressive Romney?  I think there are two reasons.  First, Romney, by his nature, is a “wonk”, more interested in facts and figures than in high rhetoric.  By the nature of his preparation, he was going to come ready to debate.  Secondly, and maybe more importantly, Romney  and his campaign finally figured out he needed to rock President Obama to gain some momentum after his lukewarm convention performance.  Fuller thoughts on this topic can be found here courtesy of Michael Gerson.

Debate Prep

If you are stumbling across this blog (a miracle, I can assure you) before the first 2012 Presidential Debate between Mitt Romney and President Barack Obama starts this evening, I encourage you to read this.  It is a fantastic piece of prep work.

An Alternative Approach – Health Care Vouchers

I cannot say I hate the idea entirely.

An Alternative Approach To Health Reform: Vouchers For All

Republican Sloth

Michael Gerson nails it.