Tag Archives: stimulus

The Battle for Nevada — The Buffalo News

Interesting story on the state of affairs in Nevada from The Buffalo News. They take and in-depth look at the lay of the land in this Battleground with its cross-currents of issues and needs through the eyes of some Buffalo ex-pats in the Silver State:

CoreLogic, a company that tracks real estate data, says 64.7 percent of Las Vegas-area homeowners were “under water” early this year – meaning the value of their homes plunged so far that they owe more on the mortgage than the place is worth. Welcome to Nevada, land of the endless Great Recession, where the 12.1 percent unemployment rate leads the nation and where President Obama and his Republican challenger, Mitt Romney, are fighting fiercely for six electoral votes and the loyalty of voters like John McGinty. The choice, undecided voters and some experts said, pits a Democratic president who has tried and failed to end an economic nightmare against a Republican who might just make things better – or worse. The real estate collapse that happened here and around the nation four years ago is not Obama’s fault, nor Romney’s. It’s the fault of a nation that turned its real estate market into Las Vegas – and left 60 percent of the homeowners in Nevada, and more than a third of those in Arizona, Florida, Georgia and Michigan, under water in the process. All the boom towns went on the same real estate roller coaster ride. As the government encouraged home ownership, banks took to bundling and selling off their mortgages in packages and relaxed lending standards along the way.

Las Vegas

The result was evident in Las Vegas by the mid-2000s. Fueled by such speculation, the median home value in Las Vegas shot up from $205,200 in January 2004 to a peak of $315,000 in June of 2006. But then came the financial crisis. Confidence fell, lending standards tightened, investors started bailing on their properties – and the median home price here plummeted to a low of $118,000 this January. It’s bounced back to $138,000 since then, but signs of the collapse can still be seen everywhere. Two would-be casinos on the Strip have stood unfinished for years. Started and abandoned developments dot the suburban landscape.

Housing bust reality

And at Johnny Mac’s, John McGinty finds himself handing out the occasional free lunch and personal loan to loyal customers in need. “I do what I can to help,” McGinty said. He does this while coping with a downturn in business and mortgage payments on a three-bedroom, 1,800-square-foot home he bought for $495,000 in the mid-2000s that, he reckons, is worth about $210,000 today. Countless Las Vegas homeowners, most of them speculators, have found themselves in McGinty’s situation and walked away, intentionally defaulting on their mortgages. Economic experts say the real estate crash wrecked consumer confidence and crushed the job market, leading to an unemployment rate that’s three full percentage points higher than Buffalo’s.

Frequent visitors, Different ideas

Obama and Romney have had plenty of time for Nevada. The president will arrive here today for three days of debate preparation; it’s his ninth visit of the campaign. Romney, meanwhile, has been here six times. Yet what they’re offering voters could not be more different.

The Obama Plan for Nevada

Obama sticks by the Dodd-Frank financial reform bill, which is aimed at curbing the excesses that caused the financial crisis. In addition, he touts elements of his 2009 stimulus bill that aimed to make it easier for troubled homeowners to refinance, or even to get lenders to agree to reduce the amount of principal on troubled loans, and criticizes Congress for not expanding the refinancing program as he suggested. The trouble is, banks seem to be reluctant to take part in the original Obama refinancing and principal-reduction programs, said Kelley, head of the Realtors group. Besides, many troubled homeowners have second mortgages – and the holders of those loans are not cooperating.

The Romney Plan for Nevada

Romney wants to repeal the Dodd-Frank law, saying it’s so burdensome that lenders are now reluctant to make home loans. He also offers varying free-market proposals for addressing the Nevada housing crisis. “Don’t try to stop the foreclosure process,” he told the Las Vegas Review Journal last October. “Let it run its course and hit the bottom.” And on a Sept. 21 trip to Sin City, the GOP nominee went a step further. “The federal government has about 200,000 foreclosed homes they are holding onto,” Romney said. “I’ll make sure we get them sold, so every home is occupied, we fix our neighborhoods,” The trouble with Romney’s comments is twofold, Las Vegas-area economic experts and political pundits said. First off, letting foreclosures move forward, or putting 200,000 more homes on the market all at once, very well could depress housing values further.
On the political side, Romney’s let-them-eat-cake comments on foreclosures reinforced the Democratic caricature of him as an out-of-touch plutocrat. “It’s a very bad sound byte for him,” said Jon Ralston, a Buffalo native and longtime Las Vegas political reporter who now publishes RalstonFlash.com, a political newsletter.

Ground game is key

Ralston finds it “astonishing” that Obama appears to have an edge in a state with a 12.1 percent unemployment rate, but that appears to be the case. The latest Real Clear Politics average of polls in the Silver State finds Obama 3.8 points ahead, and political pundits say there are plenty of explanations for that edge. “The state Republican party is very much a broken party,” said David Damore, a UNLV political scientist. Party control swung to a faction loyal to Rep. Ron Paul, R-Texas, in May. The result: the Romney campaign has had to build a get-out-the-vote effort from scratch to compete with a Democratic effort honed in Obama’s 2008 victory here and the re-election of Senate Majority Leader Harry Reid two years later. “The Democrats have a very effective ground game,” said former U.S. Sen. Richard Bryan, a Democrat who nonetheless said the race remains “too close for any comfort.”

Demographics

Obama is getting a boost, too, from the state’s Hispanics, who now account for more than a quarter of the state population. Political pros here say heated GOP rhetoric on the immigration issue has helped propel the president to a 43-point lead among Hispanics in a Public Policy Polling survey last month. “A lot of (Hispanics) don’t understand how powerful the vote is,” said Arianni Valencia, 20, a Romney volunteer who specializes in reaching out to the Hispanic community. “They’re not even sure what it is to be a Republican or a Democrat. But they see the other side reaching out to them, and we’re trying to catch up.”

The deciding factor

Sherman Conley, 71, seemed to sum up the thoughts of many of the dozens of Nevada voters interviewed last week by The Buffalo News. “It’s a critical election,” said Conley, a Buffalo native, “and I’ve got to figure out who will do me the least amount of harm.”

Obama Leaving the Economy Exactly How He Found It

Barack Obama likes to talk about how he was handed the economy in horrible shape.  Well I guess he learned his lesson about leaving things how you find them. The drumbeat of bad news drones on and on now 4 years after $1 trillion dollars in “stimulus” was wasted on crony capitalism that created no jobs and has yet to revive the economy.  The latest comes from business slowing and dropping investment orders for large manufacturing equipment as well as a revision to just how bad the economy has been this year:

The precarious position of the U.S. economy was evident Thursday as separate reports showed a steep decline in orders for big-ticket items in August and growth in the spring was lower than forecast. Orders for durable goods—those designed to last longer than three years, such as cars and televisions—fell 13% from July to a seasonally adjusted $198.5 billion, the Commerce Department said. The drop, the largest since January 2009, largely reflected fewer purchases of commercial aircraft, a volatile category that can skew the data. However, demand for most other items, including automobiles, also fell, albeit at more modest pace, which could mean continued sluggishness in the economy through the rest of 2012.

The report came as the government said the economy grew more slowly in the second quarter than previously thought. The Commerce Department said gross domestic product grew at an annual pace of 1.3% in the April-through-June quarter instead of 1.7%, as weak consumer spending and the drought in the Midwest held back growth. The decline in durable-goods orders caused concern that businesses and consumers are hunkering down as threats to the U.S. economy loom—including the prospect of tax increases and spending cuts at home, and a broad slowdown in economies abroad.

Notice the part highlighted above.  Business long-term faith in any economic revival is apace the exact time Obama entered the White House. Chilling if you think about it.

This is much the same as the manufacturing  sector which contracted for the third straight month in August.  We’ll find out next week of Obama can make it four-in-a-row.  There had not been three straight readings below this contraction line since May-July 2009.

And the job picture, already embarrassingly ugly,  grows gloomier by the day:

Putting pressure on an already lousy job market, the mass layoff is making a comeback. In the past week, Cisco, Lockheed Martin and Borders announced a combined 23,000 in job cuts.  Those announcements follow 41,432 in planned cuts in June, up 11.6% from May and 5.3% vs. a year earlier, according to Challenger, Gray & Christmas. Meanwhile, state and local governments have cut 142,000 jobs this year, The WSJ reports, and Wall Street is braced for another round of cutbacks. This week, Goldman Sachs announced plans to let go 1000 fixed-income traders.

This only adds to Business Insiders damning list of the 21 Biggest Layoffs of 2012. And next week’s monthly jobs report will most likely be another sad reminder of Obama’s inability to get America working again as well as the unbelievable truth that he has no plans to change anything in the future.

This is the reality of 4 years with Barack Obama as President.  No one, least of all the remaining employed Americans. can afford another four years of Obama’s “Economic Patriotism.”

Obama Rejects Disaster Relief Funds for Florida as Political Payback

No one is more petty and partisan than our President. Remember Hurricane Isaac right before the Republican Convention in Tampa, Florida that was so fierce the media said Republicans should consider cancelling the Convention?  Well disaster relief funds are being denied to the state as political payback because Governor Rick Scott rejected wasteful “stimulus” funds early in his term.  I guess Team Obama’s internal polling is saying Florida is out of reach because this type of payback is both juvenile and politically stupid:

Time after time since taking office, Gov. Rick Scott has boasted of rejecting billions of dollars from the federal government. Now, Washington has turned the tables, shutting down Scott’s plea for financial aid in a move that almost instantly took on political tones. The Federal Emergency Management Agency refused Scott’s request for a presidential declaration of disaster for damage caused by Tropical Storm Isaac, declining to provide $26.9 million in aid to hard-hit counties. Scott moved this week to appeal the decision, but not before the issue was cast in a political light, highlighting Florida’s importance in the presidential election and the rocky relationship between Washington and the Sunshine State.

“Today, I asked the Division of Emergency Management to appeal the denial to ensure Florida communities have the full capability to recover from Isaac’s damage,” Scott wrote to FEMA’s director, Craig Fugate, this week. The letter states that the cost of damage to Monroe, Broward, Palm Beach, Collier, Bay, Escambia, Okaloosa, Santa Rosa, Franklin and Martin counties is actually about $10 million worse than originally thought, at about $36.6 million.

Scott originally wrote to Obama and Fugate to request aid about two weeks after Isaac — which became a hurricane days after sideswiping Florida — caused flooding in Palm Beach County and the Panhandle. Fugate, who served as director of the Florida Division of Emergency Management from 2001-09, responded this week to let Scott know his request had been denied. Fugate’s letter stated that the damage was not severe enough to require federal aid, and basically argued that Florida could handle the costs on its own. The rejection is the latest dust-up in a tenuous relationship between Scott and the federal government, even as Florida stands as a key swing state crucial to the outcome of the presidential election.

FEMA did provide disaster aid for Louisiana and Mississippi, which had significant flooding after Isaac. Louisiana Gov. Bobby Jindal objected that the approved funding was not sufficient. On Friday, FEMA announced that it had approved a disaster declaration for Alabama, which also was hit by Isaac.

It’s the second time since June that FEMA has turned down Scott’s request for aid. After heavy rains caused flooding in the Florida Panhandle in early June, Scott wrote letters to FEMA and Obama requesting federal intervention.

Barack Obama: the competence of Carter with the ethics of Nixon.

New Battleground State: Obamavania

Earlier today Jay Cost posted this graph regarding the jobs gap between Obama’s promises if we pass his $1tr stimulus and today’s reality:

Moe Lane saw that graphic, thought about all those jobless filling out an entire state in Obama’s America.  And with that we had the birth of Obamavania:

The Drumbeat of a Bad Economy

No matter how hard the media tries to “flood the zone” on any topic that will help Obama or hurt Romney, the relentlessly weak economy 4 years into the Obama Presidency continues to trump all. Two stories in major news papers today reflect this reality. First the New York Times writes on how quickly attention turns to the failing economy even after the media circus around national conventions:

Only hours after accepting his party’s nomination for a second term, President Obama found himself on the defensive over a jobs report that was weak in almost every way. The disappointing report leaves the president and his advisers with fading hopes that the economy will surge ahead before Election Day — much as it did late last year — and allow them to amplify his case that the country is on the road to recovery. And so on Friday Mr. Obama found himself making the complicated argument that the flagging recovery, while not good enough, is at least persistent enough to show that he has put the country on the right path. He has also found himself in the bleak position of having to prove to voters in the 59 days before they head to the polls that despite the sluggish economy and high unemployment, Americans would be even worse off with Mitt Romney at the helm.

For the past two years, Mr. Obama based his campaign on the argument that Democrats had reversed an economic free fall and helped put millions of people back to work. But that argument has proved harder to make with middling-or-worse jobs reports month after month. The August report shows that the unemployment rate fell only slightly, and even that drop was largely because hundreds of thousand of workers had given up looking for jobs. The bad economic news, with the August jobs report showing continued misery particularly for the less-educated and the long-term unemployed, electrified Republican pollsters and politicians eager to interpret it as yet more evidence of the failure of Mr. Obama’s economic policies. On Friday, Mr. Romney made a full-throated argument that Mr. Obama is failing as an economic steward, referring on Twitter to the Democratic National Convention as a party and the jobs report as the hangover. “There’s almost nothing the president has done in the past three and a half, four years that gives the American people confidence that he knows what he’s doing when it comes to jobs and the economy,” Mr. Romney said on his way to a campaign stop in Sioux City, Iowa.

And then the Wall Street Journal piles on with 2008 Obama supporter and now Romney supporter Mort Zuckerman pointing out the bad jobs results are even worse than the already bad headlines imply:

Don’t be fooled by the headline unemployment number of 8.1% announced on Friday. The reason the number dropped to 8.1% from 8.3% in July was not because more jobs were created, but because more people quit looking for work. The number for August reflects only people who have actively applied for a job in the past four weeks, either by interview or by filling an application form. But when the average period of unemployment is nearly 40 weeks, it is unrealistic to expect everyone who needs a job to keep seeking work consistently for months on end. You don’t have to be lazy to recoil from the heartbreaking futility of knocking, week after week, on closed doors.

The alarming numbers proliferate the deeper you look: 40.7% of the people counted as unemployed have been out of work for 27 weeks or more—that’s 5.2 million “long-term” unemployed. Fewer Americans are at work today than in April 2000, even though the population since then has grown by 31 million. We are still almost five million payrolls shy of where we were at the end of 2007, when the recession began. Think about that when you hear the Obama administration’s talk of an economic recovery. The key indicator of our employment health, in all the statistics, is what the government calls U-6. This is the number who have applied for work in the past six months and includes people who are involuntary part-time workers—government-speak for those individuals whose jobs have been cut back to two or three days a week.

They are working part-time only because they’ve been unable to find full-time work. This involuntary army of what’s called “underutilized labor” has been hovering for months at about 15% of the workforce. Include the eight million who have simply given up looking, and the real unemployment rate is closer to 19%.

In short, the president’s ill-designed stimulus program was a failure. For all our other national concerns, and the red herrings that typically swim in electoral waters, American voters refuse to be distracted from the No. 1 issue: the economy. And even many of those who have jobs are hurting, because annual wage increases have dropped to an average of 1.6%, the lowest in the past 30 years. Adjusting for inflation, wages are contracting.

We are experiencing, in effect, a modern-day depression. Consider two indicators: First, food stamps: More than 45 million Americans are in the program! An almost incredible record. It’s 15% of the population compared with the 7.9% participation from 1970-2000. Food-stamp enrollment has been rising at a rate of 400,000 per month over the past four years. Second, Social Security disability—another record. More than 11 million Americans are collecting federal disability checks. Half of these beneficiaries have signed on since President Obama took office more than three years ago.