The U.S. has tumbled further down a global ranking of the world’s most competitive economies, landing at fifth place because of its huge deficits and declining public faith in government, a global economic group said Wednesday.
The announcement by the World Economic Forum was the latest bad news for the Obama administration, which has been struggling to boost the sinking U.S. economy and lower an unemployment rate of more than 9 percent.
Switzerland held onto the top spot for the third consecutive year in the annual ranking by the Geneva-based forum, which is best known for its exclusive meeting of luminaries in Davos, Switzerland, each January.
Singapore moved up to second place, bumping Sweden down to third. Finland moved up to fourth place, from seventh last year. The U.S. was in fourth place last year, after falling from No. 1 in 2008.
The rankings, which the forum has issued for more than three decades, are based on economic data and a survey of 15,000 business executives.
The forum praised the U.S. for its productivity, highly sophisticated and innovative companies, excellent universities and flexible labor market. But it also cited “a number of escalating weaknesses” such as rising government debt and declining public faith in political leaders and corporate ethics.
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Under the esteemed leadership of Barack Obama, our federal deficit will break the $1 trillion mark for the third year in a row. At this point in the fiscal year, we’ve managed to acquire a $971 billion deficit. Just three years ago, this figure would have broken a record for the entire year of federal spending. Now we are spending that in just nine months.
So what if these clowns in Washington manage to come to a resolution on our debt ceiling, with $2 trillion in deficit reduction. None of it will even matter if we don’t grow our economy. The CBO estimates that the cumulative deficit over the next decade will be about $11 trillion. Keep in mind that the CBO analyzes these figures with a static view .. by law the CBO cannot allow for changes in economic behavior when tax rates go up or down. Nonetheless, let’s use this figure of $11 trillion over the next decade. If our economy continues to grow at just 2.25% of GDP, rather than the 3% that Obama predicts, our cumulative deficit will be closer to $13.7 trillion. For those of you who went to government schools, that is $2.7 trillion higher. So back to these deficit cuts … if we cut $2 trillion today but don’t get our economy moving again, it may all be for naught.
We’ve mentioned a lot of times on this one of the reasons small businesses aren’t hiring and are growing is because of the wonderful new regulations that Barack Obama is throwing their way. The Small Business Administration recently released a report which said that the total regulatory costs in our economy amount to about $1.75 trillion a year. This means that the costs due to regulation are twice as high as all of the individual income taxes collected every year by our federal government.
I just wanted to share with you an example of absurd, insipid, asinine and altogether idiotic government regulation. This is an example of how totally inflexible and outrageous government can be.
Near my home there’s a part of the Everglades called the Big Cypress Natural Preserve. Even though this is part of the Everglades it is called a natural preserve because there are still individuals who have property rights in the area. Throughout Big Cypress you will find small privately owned hunting cabins. To call these things cabins is a stretch. They really consist of a plywood floor, plywood walls, a plywood roof all sitting on some pilings. These so-called cabins belong to hunters who use them for shelter during their weeklong hunting trips into the preserve. Sometimes, depending on the water level, it takes these people as long as five hours in a swamp buggy to get to their cabin. Not my idea of fun … but whatever floats their boats.
As luck would have it there were some rather nasty and widespread fires in the preserve during the spring and early summer. Many of these cabins were destroyed. The people who own them now want to rebuild them, but the government has other ideas. Now, it seems, if you want to rebuild these cabins you have to do so according to code. The old cabins were grandfathered, so the building codes didn’t matter. But this would be new construction, so all of the applicable building codes would apply. This means that these cabins, that used to consist of nothing but plywood and pilings, will have to have a septic system, a working toilet, a sink with running water, and various other options and luxuries that a hunter could not possibly care less about in the middle of a swamp. The bottom line is that these cabins simply will not be rebuilt.
Now I know this is a pretty small scale when it comes to commerce and jobs, but this also means that there is plywood, fasteners, and various building hardware and materials that will not be sold. If these materials are not sold, they will not have to be produced. And if these materials are not produced, then there is no need to hire people to produce them, to market them, to transport them, or to sell them.
Now as I said, this is on a small scale. But this happens thousands of times a day, every single day across this country. Barely a moment goes by that some small businessman or individual doesn’t make a decision to forgo a building project, a home-improvement idea, or some other business activity simply because they have run into a government regulation and some government regulators that have made the task simply not worthwhile.
Let me ask you, are you dead sure that there is not a cockroach anywhere in your kitchen today. Yeah, I know, you do everything you can to keep those land-based mini-lobsters out of your home, but there’s really no way you can do that. So on the topic of cockroaches I have another little story for you from Southwest Florida. This one concerns a restaurant inspector in the city of Naples. Now I don’t have a problem with restaurant inspections. I got e-coli about two years ago from a bad taco salad. It’s a great weight loss program, but I really wouldn’t recommend it; especially the night before you’re supposed to fly off to join your family and some friends in Las Vegas for New Year’s Eve.
But back to this Naples restaurant inspector: It seemed that if this lady inspector walked into a restaurant and saw a cockroach she would even immediately, on the spot, shut the restaurant down. The kitchen would be closed, the customers told to leave, and the restaurant would be out of business until a subsequent inspection turned up no cockroaches. There again, revenue lost, wages lost, businesses adversely affected by over-zealous government workers — most of whom couldn’t get a job in the private sector no matter how hard they tried.
The point here is that we have gone completely overboard in the area of regulation. If the present level of regulation and with this 50 years ago life in America would not be anything like it is today. My friend Bernie Marcus, one of the founders of Home Depot, has told me many times that the Home Depot miracle simply could not be reproduced today. This is a man who, along with Arthur Blank, created a retail empire that produced almost 4000 millionaires among its investors and employees. That was then, this is now. Now Bernie and Arthur would not be able to reproduce what they have done. Two reasons: government regulations and trial lawyers.
Whenever small business owners are questioned about their failure to expand and hire new people government regulations always get part of the blame. More specifically, the new regulations that are being brought to us by ObamaCare, and the thousands of new regulations that will come with Obama’s consumer finance reform law, are cited as principal culprits. Heritage foundation calculations based on numbers from the US Office of Management and Budget shown that the year 2010 was an all-time champion when it came to the cost of major new government regulations. The total? $26.5 billion.
Scattered about in all of those fancy looking buildings in Washington DC we have tens of thousands of nameless, faceless bureaucrats sitting in cubicles who spend their days writing regulations. These bureaucrats are handed a few pages out of a piece of legislation and are then told to create a set of rules and regulations to enforce that particular section of that particular legislation. Just two or three pages from a piece of legislation can be transformed into hundreds of regulations by just one of these bureaucrats. And for everyone of these bureaucrats in Washington there’s a counterpart at the state level who was worried about whether or not a hunting cabin is going to have a working toilet, or a restaurant inspector at the local level who is going to shut down a business enterprise at the site of one cockroach.
There are certainly a lot of reasons why our economy is not growing. The fear of additional taxes is one. A lack of desire to expand a private business during the reign of a president who has declared the free market to be the “enemy” is another. And then there’s the regulations. And this is how were supposed to grow an economy and employ people?
SPEAKER: Steven Lerner. Speaker at the Left Forum 2011 “Towards a Politics of Solidarity” Pace University March 19, 2011
Speaker Bio: Stephen Lerner is the architect of the SEIU’s groundbreaking Justice for Janitors campaign. He led the union’s banking and finance campaign and has partnered with unions and groups in Europe, South American and elsewhere in campaigns to hold financial institutions accountable. As director of the union’s private equity project, he launched a long campaign to expose the over-leveraged feeding frenzy of private equity firms during the boom years that led to the ensuing economic disaster.
It feels to me after a long time of being on defense that something is starting to turn in the world and we just have to decide if we are on defense or offense
Maybe there is a different way to look at some of theses questions it’s hard for me to think about any part of organizing without thinking what just happened with this economic crisis and what it means
I don’t know how to have a discussion about labor and community if we don’t first say what do we need to do at this time in history what is the strategy that gives us some chance of winning because I spent my life time as a union organizer justice for janitors a lot of things
It seems we are at a moment where the world is going to get much much worse or much much better
Unions are almost dead we cannot survive doing what we do but the simple fact of the matter is community organizations are almost dead also and if you think about what we need to do it may give us some direction which is essentially what the folks that are in charge – the big banks and everything – what they want is stability
Every time there is a crisis in the world they say, well, the markets are stable.
What’s changed in America is the economy doing well has nothing to do with the rest of us
They figured out that they don’t need us to be rich they can do very well in a global market without us so what does this have to do with community and labor organizing more.
We need to figure out in a much more through direct action more concrete way how we are really trying to disrupt and create uncertainty for capital for how corporations operate
The thing about a boom and bust economy is it is actually incredibly fragile.
There are actually extraordinary things we could do right now to start to destabilize the folks that are in power and start to rebuild a movement.
For example, 10% of homeowners are underwater right their home they are paying more for it then its worth 10% of those people are in strategic default, meaning they are refusing to pay but they are staying in their home that’s totally spontaneous they figured out it takes a year to kick me out of my home because foreclosure is backed up
If you could double that number you would you could put banks at the edge of insolvency again.
Students have a trillion dollar debt
We have an entire economy that is built on debt and banks so the question would be what would happen if we organized homeowners in mass to do a mortgage strike if we get half a million people to agree it would literally cause a new finical crisis for the banks not for us we would be doing quite well we wouldn’t be paying anything.
Government is being strangled by debt
The four things we could do that could really upset wall street
One is if city and state and other government entities demanded to renegotiate their debt
and you might say why would the banks ever do it – because city and counties could say we won’t do business with you in the future if you won’t renegotiate the debt now
So we could leverage the power we have of government and say two things we won’t do business with you JP Morgan Chase anymore unless you do two things: you reduce the price of our interest and second you rewrite the mortgages for everybody in the communities
We could make them do that
The second thing is there is a whole question in Europe about students’ rates in debt structure. What would happen if students said we are not going to pay. It’s a trillion dollars. Think about republicans screaming about debt a trillion dollars in student debt
There is a third thing we can think about what if public employee unions instead of just being on the defensive put on the collective bargaining table when they negotiate they say we demand as a condition of negotiation that the government renegotiate – it’s crazy that you’re paying too much interest to your buddies the bankers it’s a strike issue – we will strike unless you force the banks to renegotiate/
Then if you add on top of that if we really thought about moving the kind of disruption in Madison but moving that to Wall Street and moving that to other cities around the country
We basically said you stole seventeen trillion dollars – you’ve improvised us and we are going to make it impossible for you to operate
Labor can’t lead this right now so if labor can’t lead but we are a critical part of it we do have money we have millions of members who are furious
But I don’t think this kind of movement can happen unless community groups and other activists take the lead.
If we really believe that we are in a transformative stage of what’s happening in capitalism
Then we need to confront this in a serious way and develop really ability to put a boot in the wheel then we have to think not about labor and community alliances we have to think about how together we are building something that really has the capacity to disrupt how the system operates
We need to think about a whole new way of thinking about this not as a partnership but building something new.
We have to think much more creatively. The key thing… What does the other side fear the most – they fear disruption. They fear uncertainty. Every article about Europe says in they rioted in Greece the markets went down
The folks that control this country care about one thing how the stock market goes what the bond market does how the bonuses goes. We have a very simple strategy:
* How do we bring down the stock market
* How do we bring down their bonuses
* How do we interfere with there ability to be rich
And that means we have to politically isolate them, economically isolate them and disrupt them
It’s not all theory i’ll do a pitch.
So a bunch of us around the country think who would be a really good company to hate we decided that would be JP Morgan Chase and so we are going to roll out over the next couple of months what would hopefully be an exciting campaign about JP Morgan Chase that is really about challenge the power of Wall Street.
And so what we are looking at is the first week in May can we get enough people together starting now to really have an week of action in New York I don’t want to give any details because I don’t know if there are any police agents in the room.
The goal would be that we will roll out of New York the first week of May. We will connect three ideas
* that we are not broke there is plenty of money
* they have the money – we need to get it back
* and that they are using Bloomberg and other people in government as the vehicle to try and destroy us
And so we need to take on those folks at the same time
and that we will start here we are going to look at a week of civil disobedience – direct action all over the city
then roll into the JP Morgan shareholder meeting which they moved out of New York because I guess they were afraid because of Columbus.
There is going to be a ten state mobilization it try and shut down that meeting and then looking at bank shareholder meetings around the country and try and create some moments like Madison except where we are on offense instead of defense
Where we have brave and heroic battles challenging the power of the giant corporations. We hope to inspire a much bigger movement about redistributing wealth and power in the country and that labor can’t do itself that community groups can’t do themselves but maybe we can work something new and different that can be brave enough and daring and nimble enough to do that kind of thing.
Where would we be without labor unions? We would be much better off.
Americans do not understand what “labor unions” mean. Nothing prevents a group of workers at a plant or office from getting together, signing an agreement which delegates power to negotiate contracts to certain representatives, and then proceeding with collective bargaining by those workers who chose to sign the agreement. That is not unionism; it is simply a business arrangement, much like when an athlete has an agent or a client has a lawyer.
The problem with unionism is that those who do not feel such an agreement is needed are compelled to surrender their right to bargain for their working conditions and compelled, as well, to support a vast, expensive bureaucracy of labor satraps. It is coercion of workers masked as industrial democracy. If 49% of the “represented” workers want a wage freeze but more vacation time, and that is not the official union position, then the union bosses are working against the interest of these workers. If many workers feel union rules reduce efficiency, and so the prospects of more jobs, those workers have to pay for the privilege of their representatives doing exactly the opposite of what these wish.
Coerced unions were always unnecessary, wasteful, and immoral — and all unions today are coerced unions. Depending upon whether a state has a “closed shop” (only members of a union can be hired, and these must comply with union rules) or “union shop” (new employees must join the union after being hired), if a state has no right to work law, employers must negotiate with the union instead of the individual worker. Only 22 states now have right to work laws, although robust Republican state governments could add six more states to that column, five in the Great Lakes region alone.
Our Great Lakes Region was once the industrial dynamo of the world. Unions murdered its prosperity. Towns and cities in the Great Lakes that ought to be humming with activity are now dwindling into ghost towns.
Read more here.
Here is liberal mentality at work. How does a person as educated as this guy get to be so mindlessly braindead? We have Jeffrey Sachs, Director of the Earth Institute (whatever that is) at Columbia University and professor of economics. He appeared (where else?) on MSNBC to discuss the union issue in Wisconsin. To put this quote in context, Sachs is talking about how Wisconsin is not an isolated incident but what he believes is an orchestrated event for the Republicans and the wealthy to completely eradicate unions. Are you ready??
“What these billionaires have been doing is buying the whole Congress, now buying out the governors, to make sure they never have to pay taxes again. And then we have these huge budget deficits because they don’t pay taxes any more, and what do they want to do? Cut the benefits for the poor.”
Is there ANYTHING about this fool’s rantings that makes even the slightest bit of sense? It’s interesting to note the use of the word “billionaires.” Looks like the wealth-envy language has been ratcheted up a bit. When Obama first started talking about raising taxes on people who make over $200,000 a year the left referred to as “the rich.” In no time at all the rhetoric changed and these people were referred to as “millionaires and billionaires.” Now we’ve stepped up a bit and these $200,000+ earners are simply “billionaires.” Hard to say, but maybe the language needs to advance this way because fewer and fewer Americans are buying the wealth envy language. Thanks to the Internet and to talk radio more and more people actually have come to realize that the top 1% of income earners in this country pay about 40% of all individual income taxes collected by the government; yet they earn a much smaller percentage of the total income.
Another thing … This academic hack talks about these “billionaires … buying the whole congress.” You do know who’s trying to buy the congress, don’t you? Government sector unions, that’s who. How much did they contribute in the last election cycle? Try over $400 million dollars. Now … get out there and add up the campaign contributions from billionaires and see if you reach that figure.
The daunting tower of national, state and local debt in the United States will reach a level this year unmatched just after World War II and already exceeds the size of the entire economy, according to government estimates.
But any similarity between 1946 and now ends there. The U.S. debt levels tumbled in the years after World War II, but today they are still climbing and even deep cuts in spending won’t completely change that for several years.
As President Obama and Republicans squabble over whose programs to cut and which taxes to raise, slow growth and a rising tide of interest payments – largely beyond their control – are making the job of fixing the budget much harder than in the past. Statehouses and governors face similar challenges.
After World War II, the federal debt – including debt purchased by the Social Security Trust Fund – hit nearly 122 percent of gross domestic product. State and municipal debt back then was minimal. By the time Dwight Eisenhower was elected president six years later, the federal government’s debt had dipped to about three-fourths of GDP.
The key factor in the rapid drop in government debt, said Harvard University economist Kenneth Rogoff, was fast economic growth. Spurred by a young labor force, world-leading manufacturers, high personal savings rates, a pent-up demand for consumer goods after years of war and the Depression, and a bout of inflation, the economy grew 57 percent in six years. Thanks to sharp postwar cuts in defense outlays, federal government spending also tumbled for a couple of years.
But today the U.S. economy is in a polar opposite condition. The labor force is aging, U.S. manufacturing often lags behind Asian and European rivals, households are in hock up to their eyeballs, and consumer appetite for goods is tepid. In addition, inflation is tame and government spending locked into entitlement programs and debt service that will be hard or impossible to alter.
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President Obama projects that the gross federal debt will top $15 trillion this year, officially equalling the size of the entire U.S. economy, and will jump to nearly than $21 trillion in five years’ time.
Amid the other staggering numbers in the budget Mr. Obama sent to Congress on Monday, the debt stands out — both because Congress will need to vote to raise the debt limit later this year, and because the numbers are so large.
Mr. Obama‘s budget said 2011 will see the biggest one-year jump in debt in history, or nearly $2 trillion in a single year. And the administration says it will reach $15.476 trillion by Sept. 30, the end of the fiscal year, to reach 102.6 percent of gross domestic product (GDP) — the first time since World War II that dubious figure has been reached.
In one often-cited study, two economists have argued that when gross debt passes 90 percent it hinders overall economic growth.
The president’s budget said debt as a percentage of GDP will top out at 106 percent in 2013, but only if the economy booms.
“I still don’t see a sense of urgency from the president about the massive federal debt,” said Sen. Lamar Alexander, Tennessee Republican. “His budget calls for too much government borrowing – even though the debt is already at a level that makes it harder to create private-sector jobs.”
Speaking on MSNBC on Monday, Jacob “Jack” Lew, the White House budget director, said their long-term plan to lower deficits will stabilize the debt.
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Rob Fisher to Run For Congress
(Salisbury) Republican Rob Fisher today announced he will run for Congress in Maryland’s First District after submitting a Statement of Candidacy to the Federal Elections Commission (FEC). A small businessman, veteran and Eastern Shore native, Fisher is looking to bring real leadership to Congress that puts the needs of Maryland residents first.
“At a time when the people of the First District are struggling to make ends meet, Congress is more concerned with forcing job-killing legislation down the throats of taxpayers instead of helping lead us through these turbulent economic times,” said Fisher. “Maryland deserves a representative with real-world experience who will put people ahead of party and bring an entrepreneurial spirit to Congress. I pledge to be a tireless advocate for my constituents and make job creation my first priority.”
A serial entrepreneur who has run several successful small businesses in the First District and the Capitol Region, Fisher knows first-hand the challenges faced by small businesspeople and the barriers to success that have been championed by Nancy Pelosi and Congressional Democrats. Fisher’s current company, Secure Infrastructure Solutions — a Cyber Security firm helping to safeguard America’s National Security assets — has been able to grow and expand despite the terrible economic conditions of the past two years.
“My company has grown in spite of Congress, not because of it,” said Fisher. “Small businesses need government to be their loudest cheerleader, not their biggest detractor.”
Fisher will run an issues-based, grassroots campaign that will focus on the needs of the residents of the First District. His campaign will be opening offices on the Eastern Shore, Anne Arundel County and the Baltimore area.
“The First District needs a Congressman who will put Maryland first,” said Fisher. “Career politicians have had their chance. It’s time for Congress to show real leadership, listen to the people’s concerns and find innovative solutions to our country’s problems.”
Mr. Fishers office number is 443-859-3342.
Read more here.