Lots of news websites are carrying stories about Democrats pointing fingers of blame at one another for the Coakley loss–and the election isn’t over and a single vote has yet to be counted. But the expectation across the board is so completely in favor of a Brown victory that if, by some chance, Coakley does manage to edge Brown out the big story will be of an upset victory by a Democrat running for Senate in Massachusetts.

Meanwhile, back on Wall Street, he Dow, Nasdaq and S&P 500 are all up–rather strongly up. That is news for three reasons.

First, because markets in Asia and South America have been going down for the last two days, and Europe has been mixed and unsettled. Second, because the dollar has gone up today, and for the last year, U.S. stock markets have gone down whenever the dollar went up (and up whenever the dollar went down–long story, but investors have basically been profiting from America growing weaker). The third thing that is newsworthy about the U.S. stock market gains today, however, is that the sector leading the advance is…

…get ready for it.

…you know what it is.

…it’s the health care sector!

Yes. On a day when all indications are that Scott Brown is going to be elected the next U.S. Senator from Massachusetts, effectively killing Obamacare, the health care industry is gaining in value and looking stronger, not weaker. What a tremendous surprise that is.

Jim Cramer of CNBC’s Mad Money, originally an Obama supporter (who jumped ship when he saw how disastrous the Obama administration policies were for the nation), has predicted that if Brown is elected there will be a very large stock market rally. It looks like the rally is starting today, just based on the expectation of a Brown victory that will reign in Obama, Pelosi and Reid.

For reason’s that I’ve discussed previously, our country is still in serious economic trouble, but I will be a lot more positive about our ability to get through the troubles coming later this spring and summer if Brown wins. I am anxiously waiting for the results tonight.

The message of the markets so far seems clear: What is bad for the Democrats is good for America and Americans. With a Democrat loss seeming expected today, the stock markets are up, the dollar is up, and oil prices are down. That is a simple, direct message that could figure profitably in a lot of campaign ads this election cycle.

Watch what happens tomorrow depending on the outcome of the Massachusetts election and the margin of final victory.

“I actually think the bottom is falling out,” said InsiderAdvantage CEO Matt Towery, referring to Coakley’s fall in the polls over the last ten days. “I think that this candidate is in freefall. Clearly this race is imploding for her…this is a disaster (for Democrats)”

The Politico poll, based on factoring in the number of registered voters, voters who said that they were likely to vote tomorrow, and the different levels of enthusiasm of voter groups shows Brown with a 9 point lead over the Democrat. Insider Advantage assumed a final breakdown of 20 percent Republicans, 43 percent Democrats and only 37 percent independent voters.

Independent or “Unenrolled” voters make up 51% of eligible voters in Massachusetts. Historically, unemrolled voters show up at the polls in smaller numbers than registered Democrats or Republicans. “It’d be even worse for (Coakley),” said Tower, “if we weighed it towards more independents.”

And that may be the problem. The poll may actually be weighted too much in favor of Coakley. Already, the Insider Advantage survey shows a final vote of 52 percent for Brown, 43 percent for Coakley, 2 percent for Libertarian Party candidate Kennedy and 3 percent still undecided. If that poll is accurate, and those remaining undecideds break evenly for Brown and Coakley, that would propell the Republican candidate to an impressive win with nearly 54 percent of the vote.

The Obama Effect?

The final blow for President Obama, who raised the stakes this weekend by visiting the state himself to campaign for Coakley, is that late polls show that Brown has increased his “take” of Democrats. Polls show that 25 percent of registered Democrats now say they will vote for Brown, up from 20 percent prior to the President’s visit to Massachusetts.

Other polls released in the last three days show similar margins in favor of Brown. American Research Group gives Brown a 7 point lead, 52 to 45 percent. Suffolk University released a final survey of three bellweather Massachusetts counties, showing them all breaking late towards Brown by double-digit margins.

If unenrolled voters show up at the polls in higher numbers than in previous contests–which seems likely given their overwhelming backing of Brown–the win could be even more of a blowout for the Republican candidate. If that is the case, expect Brown to beat Coakley by the higher, double-digit margin suggested by Suffolk.

Current values are Brown at 65.0, up 12.5, with 66.0 required to buy, and Coakley at 35.0, down 12.9, with 39.2 to buy. Expect Coakley’s people to start burning up Intrade with buys to try to lift her sagging numbers before this is noticed and commented on.

Intrade may be of dubious value as an accurate bellweather, but I think it shows yet another example of people recognizing that a surge just might have become unstoppable. And that is quite a turnaround in the conventional wisdom against a relatively-unknown Republican being elected to fill the Massachusetts Senate seat formerly held by Ted Kennedy. The last time I looked, Intrade basically had the race trading as a dead-heat. Now, after The Great One campaigned for the Kennedy legacy today and reminded people how important it is for Massachusetts to send Coakley to Washington…the bottom seems to have dropped out of betting on her.

Hmm. The Olympics. The Climate Treaty. The New Jersey governor race. The Virginia governor race. Now Scott Brown is the Intrade favorite to become the first Republican Senator from Massachusetts in the last 40 years — and that comes after the President personally went to campaign on behalf of Brown’s opponent today.

Even if Brown doesn’t win, what kind of mixed-up, crazy, alternate reality has come out of the Obama presidency where the 41st vote against Democrat excess may come from a Massachusetts Republican who campaigned precisely on the promise to be that 41st vote? The high-pitched, turbine-like whine you hear emanating from Boston is the sound of Teddy Kennedy revolving rapidly in his grave.

If I was a Democrat (Lord forbid!), and if this potential new Boston Massacre was the latest in that string of first-term non-accomplishments that I could point to for President Barack Obama after all of the hype about hope and change…I think I’d be somewhat upset.

*Smirk*

Well, no, Mr. President. Everybody can not buy a truck.

Not in your America they can’t.

U.S. auto sales had their sharpest decline in 2009 since World War II. That was the first year of your presidency, and the year when your party, the Democrats, had a controlling majority in the House of Representatives and a filibuster-proof super-majority in the Senate. It was supposed to be the year of Hope and Change. Instead, it is the year of broken promises, failures and secret, back-room deals

It happened on your watch. The buck stops with you. And you seem to know as little about the state of truck, and car, sales in America as Martha Coakley knows about the Boston Red Sox.

Two of the Big Three automakers went bankrupt on your watch, Mr. President. The biggest of the big–GM–was for all practical purposes nationalized by your administration. After nationalization, GM saw a sharp drop in their sales and Ford Motor Company moved into the number one automaker spot.

Ford Motor Company, by the way, was the only U.S. automaker that did not accept a bail-out from the government and is still in complete charge of their own business.

Pundits and your government economists had been predicting a sharp rebound for auto sales all last year since your administration kept telling all of us how much the economy was improving. But there was no rebound. Even a 33% increase in Ford’s sales from their 2008 couldn’t drag the rest of the U.S. auto industry up to economic health. And the reason Ford’s sales could not do that is because “anybody” simply does not have enough money to buy a truck. Or a car.

A lot of people don’t even have enough money to buy a bicycle.

Unemployment is at record highs across America–high levels of unemployment that this country hasn’t seen since the Great Depression. I’m not talking about that 10.0% figure your administration and the mainstream media likes to keep tossing around, although heaven knows that’s high enough. But when you go back to measuring unemployment the old-fashioned way–the way it was measured before the Clinton administration changed the way the numbers were reported–the Jobless Rate is actually 17.3% right now in Barack Obama’s America.

But let’s face it, the actual number doesn’t really matter. Call it 10% and ignore the long-term unemployed, or call it 17.3% and admit those extra millions of jobless Americans are there, the result is the same. People who are out of work do not buy new trucks, or cars, or homes, or televisions, or…much of anything. And as long as you fail to correct the problems of unemployment in America, the economy will not improve.

The casual way you tossed off that laugh-line about “anybody can buy a truck” in your Massachusetts speech shows how completely out of touch with the average person you really are.

Martha Coakley isn’t in danger of losing the Senate race in Massachusetts because she is a poor candidate with an elitist, entitlement attitude (although she certainly is all that). Martha Coakley is in danger of losing the Senate race to Scott Brown because people everywhere, all across America, are fed up with a government that is out of touch with their problems. A government that isn’t doing anything to help the economy grow and create real jobs for real people. A government that continues to rack up trillion-dollar spending bills that we cannot possibly afford on a laundry-list of liberal pet projects that will raise taxes, deliver nothing but more red tape and more government bureaucratic jobs, and bankrupt the whole country.

To put it even more clearly, the whole country is fed up with out of touch elitists who believe that “anybody can buy a truck,” in an eerie echo of Marie Antoinette’s “Let them eat cake” if they can’t afford bread remark. Even in true-blue Massachusetts, people have had enough.

I don’t know if Scott Brown is actually going to beat the odds and the Democrat Machine to pull off a a win in Massachusetts this Tuesday. But I do know that even if he does not, he has already come a lot closer to winning than you or any of your cronies ever believed possible. Massachusetts was a “safe” state for you. They were predictably Blue, no matter what. They were a place where you didn’t have to worry, no matter what.

Well, Mr. President, you were wrong. You do have to worry…even in Massachusetts. And the fact that you are in Massachusetts today desperately trying to prop up Martha Coakley and boost her to a come-from-behind win against Scott Brown proves just how wrong you were.

And if it can happen in Massachusetts, then imagine what things are going to be like for Democrats running in this Fall’s elections in Red and Purple states all across this nation.

No, Mr. President, anybody can not buy a truck. Not in Massachusetts. Not in California. Not in Ohio, and certainly not in Michigan. Anybody cannot buy a truck or a car in any state in the country, and the number of people who can buy trucks and cars is shrinking each and every month while you do absolutely nothing about it.

And the fact that you do not know that simple, obvious fact is one of the main reasons that no state in this country is reliably and safely Blue in 2010.

Update Monday night: Swamp Yankee has written a very helpful Massachusetts Election Primer that has information on which cities and counties to watch, how to tell if Coakley is in trouble, how to tell if Coakley is in REAL trouble, etc. If you haven’t checked it out, you might find it both interesting and useful while watching returns come in. I know I’ve printed it out and am going to have a copy with me while watching.

The fact that Nate Silver, political statistician at fivethirtyeight.com, is giving Brown a 74% probability of winning the election has been talked about both here and elsewhere. What isn’t being quoted as much on lib, moderate and mainstream news sites is that Silver also said that his mathematical model “may be too slow to incorporate new information and may understate the magnitude of the trend toward Brown.”

“Coakley’s odds are substantially worse than they appeared to be 24 hours ago,” wrote Silver, “when there were fewer credible polls to evaluate and there appeared to be some chance that her numbers were bottoming out and perhaps reversing.”

Translation: She’s toast, barring some sort of miracle even beyond the usual Democrat dirty election tricks.

This is beginning to look like a victory margin shaping up for Brown far beyond any possibility of spin based on simply “another weak Democrat candidate” and a “fluke.” If Brown’s victory is anywhere near double-digits over Coakley, it will send shockwaves through the House. If it is in the double-digits–especially the mid-double-digits suggested by the Suffolk University bellweather counties polls today, expect the shock waves to cause major realignments and retirements in DC.

Don’t let up. Keep up the effort. Become part of the effort and help make it happen.

Updated Monday afternoon: New Boston Massacre? The latest reports from Massachusetts are that 25% of registered Democrats now say that they will vote for Scott Brown. It is beginning to look like this should be called the New Boston Massacre instead of the “Massachusetts Miracle.”

Update 2: After President Obama visited Massachusetts and campaigned on behalf of Martha Coakley, her poll numbers are in freefall! Scott Brown’s lead has widened in all but one poll (the lone outlier is a poll commissioned by DailyKos) from a 4-5 point lead up to a 7-10 point lead.

And Suffolk University’s bellweather poll of key Massachusetts counties is showing a mid double-digit lead of about 15 points for Brown over Coakley. Her support seems to have completely collapsed, even among Democrats.

Update 1: While Obama was talking about how “anybody can buy a truck” on the stump with Marcia…ah…Martha Coakley, the dean of political handicappers, Charlie Cook, sent out an unusual, special weekend update to his subscribers in which he said, “This past Thursday, Jan. 14, The Cook Political Report moved the open Massachusetts Senate seat rating from lean Democrat to toss-up, having moved it from solid Democrat to lean Democratic on Jan. 7…Given the vagaries of voter turnout, particularly in lower participation level special elections, this race could still go either way, but we put a finger on the scale for Brown.”

To put that in clearer words, Cook doesn’t want to say that he is moving the race from “toss up” to “leans Republican,” but he also doesn’t want to look like he misread the race, and it has now moved to “leans Republican.” Also, it quite obviously now looks likely enough that Brown will win that Cook had to send out a special announcement today.

The DOOMwatch continues.

The latest unemployment and housing numbers underscore the folly of their decision to pay so much attention to health care and climate change instead of focusing on the economy “like a laser beam,” as President Clinton pledged to do during his 1992 campaign….

Last week’s disappointing December unemployment report was the final blow in what was already a bad week for Democrats. One of the most sobering findings in the report was that if 661,000 Americans had not given up even looking for work that month, the unemployment rate would have moved up rather than holding steady at a horrific 10 percent.

Yes. It would have gone to 10.4% to be precise.

It’s the economy, stupid. Remember the mantra of the Clinton campaign? Well, Barry, Nancy and Harry sure haven’t remembered it. And it is going to spell disaster for Democratic Party politicians up for election in 2010–and according to Cook, probably in 2012 as well. More below.

Some 6.1 million Americans, the highest number in the post-World War II era, have been unemployed for 27 weeks or more. The “U-6″ rate of unemployment, which adds in people who are working part-time while seeking full-time work and those who have stopped looking, stands at 17.3 percent, the highest level in the 15 years that the Labor Department has calculated it.

Charlie has the right idea, but his figures are wrong. Add those 6 million people out of work he talks about to the “official” number of unemployed (15 million) and you only get 21 million people. But if you take the U6 rate Cook quotes–17.3%–and do the math, that represents just slightly under 26 million people.

There aren’t 6 million people who have been unemployed for 26 weeks or more. There are actually about 11 million people not being counted. There have never been this many Americans unemployed in this country at any time since the Great Depression. And while those 11 million additional unemployed people are invisible and “off the books” as far as the Obama administration is concerned…they still have the right to vote.

They, and a lot of other people are fed up with what is happening in Washington to pile up higher and higher deficits. And they are fed up with what they can see happening in their local cities and towns.

People across the nation are seeing shops and small businesses go out of business leaving empty storefronts on mainstreet and in the shopping malls. Even if they still have a job, they know people who have lost jobs and can’t find a new one. These people have family members, relatives, and friends who are out of work. And they worry that they will be next. There are no jobs available, and Congress and the President haven’t done anything at all last year to help that has made a bit of difference. The misery isn’t getting better. It is spreading, month by month.

Another piece of bad news was the distressing late-December report that the housing sector’s slow improvement had stalled, raising the specter of a second dip. As Wellesley College economist Karl Case, one of the developers of the definitive Standard & Poor’s/Case-Shiller home price index, told The New York Times recently, “I’m worried. Everyone’s worried.” He added, “If prices sink 15 percent from here, which is a possibility, and the 2008 and 2009 loans go bad, then we’re back where we were before — in a nightmare.” Faster action in Congress to renew (or even increase) the tax credit for first-time homebuyers might have boosted housing prices, which in turn would have improved mortgage lenders’ balance sheets.

Everyone in the real estate community, and the banking, investment and financial communities, are waiting for the other shoe to drop. Everyone knows that we aren’t really out of the woods yet. Everyone is waiting for the second and deeper dip of the double-dip recession. The problem is–the first dip took us down to levels not seen since the Great Depression. Where is that second dip going to take us–especially since all of the money that could have been used to bail us out when the second dip comes has already been spent?

And Cook’s sources aren’t even mentioning the coming collapse in the commercial real estate market that is expected to hit this spring and summer.

The first “stimulus” didn’t create new jobs. It created signs talking about new jobs posted along the highways that have become a late-night joke. It created more cynicism and more distrust of the government. And all the while, as people struggle with fewer jobs, less money and an ongoing feeling that nothing has gotten better and nobody in power cares…it has created anger.

Last year was a record year for foreclosures. Retail sales for December were down. They dropped 0.3% when they were expected to be up 0.5% over the anemic sales of December 2008. Remember all that talk of Christmas sales being up? It was just talk.

Retail sales for the entire year of 2009 were down in the biggest drop since retail sales figures have been recorded. 2009 retail sales dropped 12 times more than the sales drop in 2008–which was the only year since 1992 that annual retail sales dropped at all.

And things are going to get worse before they get better. Even the best case scenario painted by Charlie Cook admits that.

…Analysts estimate that Labor’s household employment survey would have to show a net increase of 150,000 jobs a month for 48 straight months for the unemployment rate to drop to just 9 percent….

Even before December’s negative jobs report, economist Robert Reich, who was Labor secretary in the Clinton administration, wrote on talkingpointsmemo.com that “the chances of unemployment being 10 percent next November are overwhelmingly high.” The number of newly created jobs will be offset by discouraged workers beginning to once again seek employment, Reich predicted, resulting in little change in the overall unemployment rate. Could joblessness still be above 9 percent when the 2012 presidential election year begins?

That is the lowest, U3 unemployment rate Cook is talking about in that paragraph. The U6 rate will continue to push up as more people become discouraged and some of the long-term discouraged re-enter the job market looking for something, anything to help pay their bills. The gap between those two rates has been continuing to grow all through 2009, and in 2010 the real unemployment rate is going to top 20% before mid-year. And that is assuming we don’t have another real estate collapse.

If…when…real estate collapses again, all bets are off. And nothing is going to cause President Obama’s popularity and job approval ratings to go up again. That isn’t my opinion. That again comes from Charlie Cook:

…No other president in the past half-century has seen his Gallup job-approval rating drop as far as Obama’s has in his first year (down 21 points), and no president in that same half-century has seen his approval rating go up, even as much as 1 point, between the end of his first year and the eve of his first midterm election.

The ultimate proof of how unpopular Obama, Pelosi and Reid and their priorities are is not whether Scott Brown wins the Senate election in Massachusetts. The ultimate proof is that now, just four days before the special election, Democrats and the President are scrambling in panic to try to prevent Brown from winning. Who would have though, one year ago, that 17% of the registered Democrats in true-blue Massachusetts would say that they were considering voting for a Republican for Senate?

Very hard decisions are going to have to be made by Congress in the next several years. Pet programs and concerns on both sides of the aisle are going to fall by the wayside as the nation (and probably the world) is forced to concentrate on a back-to-the-basics approach to government. This is a very important time for conservatives to focus on getting involved at the precinct level of the GOP to make sure that the candidates who make those tough decisions are sane, sensible, sober people.

Conservatives are now the largest ideological block of American voters. Expect that number to grow even larger in 2010. Let’s make sure that the House and the Senate are filled with people who reflect the concerns, beliefs and priorities of most Americans.

Coakley went on to say that the main issues she felt were responsible for Brown’s popularity with voters were terrorism, and unemployment. What a surprise that voters would be concerned about two practical, visible issues with immediate consequences for our country that are also the most obvious and visible failures of President Obama and the Democrats controlling both houses of Congress.

Sargent also reports that during the phone call, Coakley begged listening large donors to “max out” and send the limit of $2400 per donor to fund a last-minute advertising blitz to try to overcome Brown’s growing popularity with voters. She said that she needed $400,000 for additional Television spots, $325,000 for mailings to get out the vote, and $80,000 to fund robocalls.

Scott Brown, meanwhile, raised over $1,000,000 in one day, in small donations from countless people, via an effective word-of-mouth “money-bomb” campaign yesterday. This is allowing him to immediately respond to the last-minute, negative ads Coakley is running.

DNC Chair Tim Kaine reportedly told donors that Democratic leadership in Washington is “cautiously optimistic” about the Massachusetts Senate race, but urged them to give the limit as well. This runs counter to earlier reports that Democrat internal polling shows Coakley ahead by a comfortable double-digit margin. Teagan Goddard, meanwhile, reports that new Democrat internal polling shows Coakley’s lead has shrunk to about 5 points and is dwindling fast. And the new Rasmussen Reports survey taken last night shows Coakley with a razor-think 2 point lead.

Even if Brown loses, it looks like he is going to come close enough to winning to make a lot of Democrats up for election this Fall consider their votes this year very, very carefully.

To put that into terms a Democrat can understand, that means that the true number of unemployed people in America is more than 55 times the population of Washington, DC, inside the Beltway.

The true unemployment numbers — 33,434,730 people out of work in America, or a 21.9% jobless rate in December of 2009 — are shown in this graph, courtesy of economist John Williams of Shadowstats.com

The government may try to hide the fact that there are a lot more unemployed people than they want to admit, but they cannot hide from the votes of those unemployed people, their families and their friends when elections roll around. Nor can they hide from the consequences of Democrats Gone Wild® in Washington as they over-spend, over-tax and have misplaced priorities that hurt rather than help the average American. And that is one of the many reasons that Scott Brown is so close to winning the Massachusetts Senate seat once held by Ted Kennedy.

This chart above does not show a pretty picture of life in Obama’s America. And it is going to get worse. The top, blue line is the one to look at. The bottom, red line is the one the Democrats would prefer to keep people focused on. The difference between those two lines shows millions of American workers who are unemployed, but are not counted as unemployed by the government for various excuses and rationalizations. And those millions of unreported and forgotten unemployed Americans are one of reasons that approval ratings of Barack Obama and the Democrats are in free-fall despite efforts to say that the sky is not falling.

The fact that people around the country are angry at Washington is not a surprise to anyone who witnessed the Tea Parties. Many people, however, may be surprised that the government is deliberately under-reporting the actual number of unemployed. But the most surprising thing about the large difference between real unemployment at 22% and the “fudged” false rate of 10% is that one of the chief critics of this kind of government under-reporting is now a top economic advisor to President Barack Obama. But more on that below.

John Crudele at the New York Post and Jim Geraighty at National Review today write that the nation’s jobless rate is 22%, not the 10% that the Obama administration is reporting–but if you’re a regular Redstate reader you already know that. Rush Limbaugh mentioned it today on his show as well (Happy Birthday, Rush!) And there is mainstream notice of the joblessness crisis as well, shown by an AP story that gives an unusually harsh (and unusually honest) look at the real jobless numbers and how many years they are likely to remain high.

The 22% current jobless figure (actually 21.9%, but only Democrats are counting tenths of percents right now) comes from computing unemployment numbers the old-fashioned way. The old-fasioned way unemployment used to be counted before Bill Clinton’s administration changed it in 1994 to make things look rosier.

First, where do these more accurate unemployment numbers come from?

Start with the “official” 10.0% jobless rate (15,267,000 unemployed workers). Now add in the number of people who have lost jobs in the last 12 months but have stopped looking for a new job until the economy approves and there are some jobs. Next, add in the people who were forced to take a low-paying part-time job to replace a lost, high-paying full-time job. Finally, add to that number the folks who lost their job but have some other source of household income–a working spouse, a pension, disability income, etc.–even if that other source of income isn’t enough to pay the bills. Add in all those people who are not included in the official 10.0% unemployment rate and you get a more realistic unemployment rate of 17.3%.

But 17.3% (25,411,910 unemployed workers) is still not the unemployment rate that would have been making huge headlines prior to 1994. That figure is still artificially low compared to what used to be reported.

Take that 17.3% jobless rate for December of 2009, and now add in all of the discouraged people who lost their jobs prior to December of 2008 and still have not been able to find a job. Yes, if you lost your job more than a year before the official unemployment report, and have given up looking for a new job because there simply are no jobs available for you, then you aren’t even counted in that higher December, 2009, 17.3% real umemployment rate. When the chronically unemployed and underemployed are added in, you arrive at a December, 2009, unemployment rate of 21.9% (33,434,730 unemployed workers).

If the government was still reporting unemployment information the way it used to report it, prior to the change they made in 1994, then the jobless rate for December of 2009 would have been 21.9%, not 10.0%.

Sounds like Climategate, doesn’t it? If the statistics don’t say what you want them to say, then just adjust the statistics until they tell the story you want to tell. And in November of 2003, an economist named Austan Goolsbee at the University of Chicago wrote an editorial for The New York Times making just that point:

Unfortunately, underreporting unemployment has served the interests of both political parties. Democrats were able to claim unemployment fell in the 1990′s to the lowest level in 40 years, happy to ignore the invisible unemployed. Republicans have eagerly embraced the view that the recession of 2001 was the mildest on record.

The situation has grown so dire, though, that we can’t even tell whether the job market is recovering. The time has come to correct the official unemployment statistics to account for those left out. The government agencies that can give us a more detailed and accurate picture of the nation’s employment situation — the Census, the Bureau of Labor Statistics and the Bureau of Economic Analysis — need additional funds and resources from Congress to do their jobs.

This statement by Goolsbee is absolutely correct. Under-reporting the jobless rate started under Bill Clinton and benefited the Democrats (and still benefits them to this day, since it makes the Clinton era appear better than it actually was). But it is equally true that when George Bush took office he continued the under-reporting practice and benefited from it as well. It is a bipartisan scam.

No one, however, is benefiting more from these fudged jobless rate numbers than Barack Obama. The highest U6 unemployment rate under Bill Clinton was 11.8% and it bottomed out at 7.1% after his two terms in office. Under George Bush–even with the 9/11 attack and aftermath–the highest U6 unemployment rate was 10.4% prior to the closing months of 2008, when it ended at 13.5%. Before that, for the final two Bush years, the U6 jobless rate had fluctuated from 8.0 to 8.9 percent. In contrast, during Barack Obama’s first year in office, U6 unemployment has gone up steadily month by month, averaging twice the rate under Bill Clinton the first half of the year, and twice the post-9/11 rate of George Bush during the second half year.

There are two other statistics that President Obama and the Democrats don’t want you (or the voters in Massachusetts) thinking about. First, with their fillibuster-proof super-majority in the Senate, and their complete control of the House, the number of long-term unemployed in America has grown to a record number not seen since the Great Depression. The number of people receiving unemployment assistance has also grown to a record number never seen in all the years statistics have been recorded.

We got the change, all right. The problem is that it is the “Buddy, can you spare a dime” sort of change.

What is ironic about this use of fudged numbers to conceal exactly how bad joblessness in America is currently, is that the same economist who criticized this practice under Bill Clinton and George Bush in 2003 now works as <a href=”http://topics.nytimes.com/top/reference/timestopics/people/g/austan_goolsbee/index.html?scp=1-spot&sq=austan%20goolsbee&st=cse”a top economic advisor for Barack Obama. Yes, Austan Goolsbee, quoted above, now uses those same “cooked” jobless numbers to make the failing Obama policies look good.

Another way of looking at this is that it all depends on what the meaning of “unemployed” is. The lower, 10% jobless rate is what unemployed means if you work in the Obama administration (or are a Democrat up for re-election in 2010 or 2012). The higher, real jobless rate of 22% is what unemployed means if you are an economist who does not work for the Obama administration…or one of those 33,434,730 Americans currently out of work.

The only consolation that can be offered to the millions of uncounted and ignored unemployed people in America suffering in an economy that remains unstimulated is that, come this November, you will be ignored no longer. And through your votes, you’ll have a chance to help a lot of politicans and political hacks an entirely new meaning of the word unemployed.

Those of you in Massachusetts have an opportunity to make your voices heard a lot sooner.

Wrong.

Optimists were looking for the first signs of net job creation last month since 2007. At worst, they were hoping for the jobless rate to hold steady at 10.0%. And the worst is what is what they got.

The official unemployment rate for December remained unchanged at 10.0% at a time when the Obama administration really, really could have used some good news to offset all the bad news and screw-ups lately. No progress on the job front. Zip. The streak of monthly job losses is extended one more month to now total 24, with no sign things are getting better. And the only public event on the President’s calendar today is an afternoon statement to the press on joblessness.

It will be interesting to see if he again says, “the buck stops here.” For all too many Americans, the buck is stopping before it gets into their hands to pay the bills, buy food and pay for other necessities.

But before the spin hits the fan, here’s the really bleak news that you won’t hear the President talking about this afternoon. The real unemployment rate–the rate as it used to be calculated before the Clinton administration decided in 1994 that it all depended on what “unemployed” meant, actually crept upwards in December.

The more accurate unemployment rate, also released this morning by the Department of Labor, rose from 17.2% in November to 17.3% in December. And that is at a time when seasonal, temporary jobs for the holidays should have taken a lot of people off the unemployment rolls at least temporarily.

As I’ve reported before, the “official” unemployment rate bears about as much relationship to the true number of people who are unemployed in America as the Climate Research Unit’s fraudulent “global warming” data bears to the real average temperature people have been experiencing the last ten years. The unemployment numbers given out by the government are less than 50% of the actual number of people who are unemployed in this country.

A picture is worth a thousand words, so here’s a chart, courtesy of John Williams, of American Business Analytics and Research and Shadowstats.com and reproduced with his permission, that shows how bad unemployment in the land of Hope and Change® really is:

The lowest, red line on the chart is the official number the administration and the mainstream media will be talking about today. It is called the U3 rate. The middle, gray line is also an official government number–but one that President Obama, Nancy Pelosi and Harry Reid would just as soon you never knew about. That is the U6 rate. First, let me explain the difference between these two official government figures and why nearly everything you hear today on the news about unemployment is basically going to be a lie. I’ll talk about the highest, blue line afterward.

The 10.0% official unemployment number the media will be talking about for the next few days doesn’t include a lot of people who are actually unemployed, but who are not counted in the official government numbers for one reason or another. In fact, it is truly amazing who isn’t counted officially as unemployed–amazing, and somewhat frightening.

1. If lost your job sometime last year, have looked unsuccessfully for a new job for several weeks or months, and have given up looking because you are discouraged or realize that there simply aren’t any jobs available for you right now…then you and your lost job do not count.

2. If you were self-employed and can no longer make money as a self-employed worker but can’t find a job working for someone else–and that would include small business owners who went bankrupt–then you and your lost job do not count.

3. If you took early retirement, and lost the full or part-time job you took after retirement in order to have enough money to make ends meet, then you and your lost job do not count.

4. If you are disabled, and lost the full or part-time job and the extra money you used to have that made it possible to live on your disability pension, then you and your lost job do not count.

5. Perhaps you are the spouse of a full or part-time worker, and you are also the primary homemaker or family childcare provider for the family. If the only way your family was surviving before was through a full or part-time job you used to have but lost, and you can’t find any kind of job now, then you and the job you lost do not count. The government considers you fully employed as a homemaker.

6. Let’s say that you used to have a high-paying job working in IT, or marketing, or banking, or real estate, or finance, or whatever, and after losing that high-paying job you could not find another job at a comparable salary. So, after weeks or months of being out of work, you took a job at Wal-mart, or McDonalds or the local gas station at minimum wage…well congratulations! The government considers you to be fully employed and, you guessed it, you and the job you lost do not count on the “official” unemployment numbers you’ll hear about today.

Add all of these “do not count” categories of people who are truly unemployed or painfully underemployed to the official number shown in that bottom red line on the chart above and you get the light gray line in the middle. The red line representing the U3 rate eliminates a lot of people who certainly consider themselves to be unemployed–you may even be one of them. The gray line U6 line includes those people listed above, and that is why it is far more accurate as a gauge of joblessness. As I said, both those figures are official government statistics, and come directly from the Department of Labor…but you have to hunt a bit and know what you are looking for to find the U6 rate on their website.

You will notice that the difference between the red line and the gray line has gotten much bigger in 2009, showing a lot more people chronically out of work. Notice also that the difference between the two lines was pretty much the same all through the presidencies of both Bill Clinton and George Bush. Do not believe for a moment that things have not been getting steadily worse under Barack Obama. This is not even primarily a Democrat-Republican problem. It is specifically an Obama-Pelosi-Reid problem.

The current U6 (gray line) unemployment rate is actually 17.3%. That is the second highest it has been so far in recent times; the only time it has been higher lately was in October of 2009, when it was 17.4%. So when was the last real unemployment in our country was this high?

Frankly, we don’t exactly know. In order to find unemployment in excess of 17%, you have to go back to before we kept the sort of unemployment statistics we keep today.

The United States has not seen unemployment rates this high since the 1930′s, and it took more than two years after the Crash of 1929 for things to get that bad. At the height (or depth) of the Great Depression, U.S. unemployment was 24.6%, and with the waves of foreclosures and other real estate problems due to hit this spring and summer, it is possible it will get that bad again. Especially with the Democrats in charge and spending like…Democrats.

Now, what about that top, blue line on the chart?

Frankly, that is probably the most accurate measure of true unemployment that we currently have. In 1994, when the U6 and U3 unemployment rates were split apart to change the way unemployment was calculated, another trick was thrown in to make the difference between the two new rates less than what it actually is. Remember up above when I listed the ways that you “did not count” on the official, U3 rate? The first way was if you had lost your job within the last year and had gotten discouraged trying to find a new one. And that is where the top, red line comes in.

What if you lost your job in December of 2008? Or in August of 2008? Or anytime prior to exactly 12 months ago?

If that is the case, and you have been waiting for the job market to improve before you start applying for work again–then you really don’t count as far as the government is concerned. In fact, for all practical purposes, you do not exist.

The largest number of “off the books” unemployed-but-not-counted-as-unemployed people are those who are “discouraged workers.” And if you have been discouraged for more than a year, it is likely that you are going to join the ranks of the permanently un- or under-employed. So you vanish from the books completely and are no longer a troubling statistic that has to be talked about at press conferences.

The red line at the top of the chart adds back in an estimate, based on calculations by economist John Williams, of workers who are unemployed or underemployed, and have been so for more than one year. This is the figure that is closest to the “unemployment rate” that would have been reported by the news media in all the years prior to 1994 going back to the 1940s. And that “real” unemployment rate is 21.9%.

21.9% unemployment. Now. In Barack Obama’s America.

The only Hope here is the hope that things won’t get as bad as they seem likely to get. I don’t think that this is the Change that people were expecting either when they voted for him. It is however, the change that we are getting. And it will get worse for some months, or possibly years, to come.

Remember that the comparable unemployment rate during the Great Depression topped out at 24.6%, only about 3 percentage points higher than where we are now. In fairness, because of the great number of people who lived or worked on farms during the 1930s compared with the small number who do so now–and the greater assistance programs available now for the unemployed–the “real” unemployment rate would probably have to reach about 34% to bring an equal amount of misery to people now as the Great Depression brought back then. But I think most of us feel that what we have now is misery enough.

About one out of every five Americans who would like to be working and is able to work cannot find a job, and if this trend continues it will soon be one out of every four. And that is just an average, nationwide rate. In some places in the upper Midwest Rust Belt, real unemployment has already exceeded 30%. And that still isn’t the end of the bad news.

Another ticking time bomb on how bad U.S. unemployment really is will explode in the next few weeks when the Bureau of Labor Statistics revises the unemployment data it released last year to “correct” it. They have already admitted,as reported by Bloomberg, that they over-estimated the number of jobs created in early 2009 by at least 824,000. John Silva, chief economist at Wells Fargo Securities, says that they continue to underestimate job losses and overestimate job creation by about 15% per month. The final correction may add over 1,000,000 additional job losses to the 2009 unemployment figure, and push the lowest, U3 unemployment rate up about a half percentage point.

In the meantime, the Democrat majority controlling the House of Representatives, the Democrat super-majority controlling the Senate, and President Barack Obama keep adding more and more budget-busters to bills being decided in secret in smoke-free back rooms far away from cameras, news media and the scrutiny of the general public. They are buying votes with promises of money that they–or rather we, the American people–do not have. They keep planning new taxes to bleed cash from a dwindling tax base of those who still have jobs, instead of focusing on really fixing the economic problems that we face. They expect more and more revenue from people who have less and less each day. And overseas, the nations who hold our national debt are getting more nervous every day.

No economist who is not on the government payroll thinks that we are really at the end of this economic crisis. Most believe that the second, and deeper, dip of a double-dip economic crash is due to come this year. Let there be only one successful major terrorist attack on a domestic civilian target, or the heating up of another front in the war on terror–Iran and Israel, for example, or a devastating natural disaster like a major earthquake and our “recovery” will collapse overnight with no money left for another non-stimulating stimulus program.

One thing you can definitely count on is that, just like back in the 1930s when Democrats were also in charge of the government and did everything wrong, things are going to get worse before they get better. Much, much worse.

BARACK OBAMA, The Boy President®, is seated at his desk. He looks up, puts down the latest Golf Digest after looking at his picture on the cover one more time, and glances quizzically at his aide.

BO: “What’s up, Rahm?”

RE: “Mr. President, we have another problem involving…child pornography.”

BO: “Good Lord, Rahm. This time, he’s going to have to go. Tell him I want his resignation letter…”

RE: “No, no, Mr. President! It’s not about Kevin Jennings. It’s something else.”

BO: “Somebody else? Do you know what’s going to happen when Limbaugh gets wind of this? Fire whoever it is and back-date the resignation!”

RE: “Ah…we really can’t do that, Mr. President. Ah…I don’t really know how to put this, but…technically, Barry, you are the one in violation of the child pornography laws.”

Fade quickly to gray (about as quickly as President Obama’s approval ratings are fading…)

I can’t guarantee that is even a semi-accurate re-enactment of the conversation being held today or tomorrow at the White House. I can’t guarantee the conversation will take place in the Oval Office–Rahm might have to walk over to the White House Basketball Court to talk to the Center in Chief. Heck, I can’t even guarantee that Barack Obama will be told about this at all, since I don’t know how much “in the loop” he really is on important decisions.

I can, however, guarantee that what I’m relating is going to have to be talked about by the people in charge of the current administration. And there is nothing funny or light-hearted about the actual situation.

As The Guardian points out in an article published today, the new high-tech full body scanners that appear to be a cornerstone of the U.S. defense against Al Qaeda airplane bombings violate existing child pornography laws. The images are too graphic. I would include a sample image here, but I’m pretty sure that it would violate Redstate site policies.

The issue has come to a head in the U.K., where testing of the full-body scanners (called “virtual strip-searching” by the newspapers there), could only proceed after under-18′s were explicitly excluded from the tests. Contrary to early reports in the media, the scan images are so detailed that “genitalia and breast enlargements” are visible. Celebrities are concerned that scanner images of them will be leaked onto the internet–but the major problem is that the images produced in full-body scans are legally “indecent images or “pseudo-images” of children.”

The obvious solution to this problem is to exempt children under 18 from being scanned, which is precisely what the U.K. government has done. However, that really isn’t a solution to the problem. It is a potentially deadly loophole.

Does anyone seriously believe that terrorists who have convinced pregnant women to become suicide bombers would not focus their efforts on convincing children under 18 to carry bombs if a loophole exists to exempt them? Can anyone seriously believe that, in at least a few cases, they would be successful in brainwashing children into becoming living bombs?

What is the alternative? Forbid children under 18 from flying into Western countries? Search each child in an actual strip-search? And after years of politically-correct precedents involving profiling, can we now say that children of a certain ethic background, race, religion or national origin must be strip-searched while others are immune to something that could be potentially traumatic for a child?

The full-body scanner technology seems to be obsolete and ineffective even before it is fully deployed. Where now is the line of defense against in-flight bombings? Where is the safety Americans have a right to expect from their government?

All we are sacrificing for an ineffective, invasive technology is our time waiting at airports, millions of dollars in development money–by government standards “chump change,” and the tattered remnants of our dignity. I’m sure that counterterrorism czar John Brennan will assure us soon that the full-body scanners will work flawlessly to provide us with a comforting illusion of safety and security, except for those days that they do not work, of course.

But the ultimate irony of this story is that the scanners which violate Western child pornography laws and may therefore be for all practical purposes unusable do not really work anyway. Tests show that the scanners would not have revealed the explosives the Underwear Bomber had concealed in his briefs.

So the question that every American has to ask now is: Do you feel safer in 2010 than you did in 2008?

I don’t.

The Chinese government yesterday made what may be the most definitive and important votes on ObamaCare…and also on a second “stimulus” package, U.S. economic recovery, job creation, and the future of America itself. The implications of what the Chinese officially said and did yesterday are going to be felt throughout 2010 and many years beyond.

The first vote on the budget-busting ObamaCare Bill by China came in Copenhagen:

At an emergency meeting convened at the Bella Center this morning, Barack Obama and Gordon Brown assembled 26 heads of state in an attempt to revive a deal. But China’s Premier Wen Jiabao did not attend and was replaced by vice foreign minister He Yafei.

This afternoon, the US president and his secretary of state Hillary Clinton called another meeting with China, but were snubbed again when only three low-level Chinese delegates arrived.

China has no intention of really limiting its economic development and growth by signing on to a “carbon-emissions” agreement that isn’t lopsided in its favor. And they indicated that diplomatically in an extremely insulting way. There was not even a token gesture to preserve face for President Obama and America.

Even the much-touted “breakthrough” agreement among world leaders only came about, according to Reuters sources, because President Obama and Secretary Clinton broke in on a meeting between Premier Wen and leaders of Brazil and India–a private meeting in Wen’s hotel room that Obama had not been invited to attend. China publicly treated The Great One’s efforts as beneath their notice.

Combine that with a statement also made yesterday by an official of the Chinese government-controlled Central Bank of China, and you have a definitive vote against outrageous expenditures like ObamaCare:

“The United States cannot force foreign governments to increase their holdings of Treasuries,” Zhu said, according to an audio recording of his remarks. “Double the holdings? It is definitely impossible.”

“The US current account deficit is falling as residents’ savings increase, so its trade turnover is falling, which means the US is supplying fewer dollars to the rest of the world,” he added. “The world does not have so much money to buy more US Treasuries.”

In plain language, that means that since the U.S. economy is still so bad and real unemployment still so high, fewer Chinese goods are being imported and China therefore has less deflated U.S. dollars to give back to America in return for U.S. Treasuries. China has been willing to buy our notes with depressed-value dollars up until now because they believed that, in the long run, our economy would improve and the Treasuries would be worth a lot more 30 years down the road than our dollars are currently worth. And the game benefited them doubly because it kept their own manufacturing economy increasing and fueled expansion of their domestic economy.

That is no longer true. Not for China, and not for the rest of the world. The single-minded fixation by the Democrats on passing the most expensive domestic entitlement program in history during the worst economic downturn since the 1930s offers final proof that the U.S. government is is going to continue on its path to economic ruin.

With the ever-increasing printing of paper dollars by the Obama Treasury Department–constantly diluting the value of our currency–and the ever-increasing irresponsible spending by the Democrats controlling the House and the Senate, long-term prospects for our economy are no longer looking good to overseas investors. The game no longer looks like a winning one for China, or for anyone else.

Since we are importing less merchandise, we are not as important a trading-partner for China as we once were. Since we are spending ourselves into bankruptcy and national default, we are no longer a good credit risk for them. So they see no reason to continue to prop up our economy by continuing to buy long-term U.S. Treasury notes.

The “unlimited” well of money that our government has been borrowing from China, our biggest lender, is about to dry up. And no matter how bad the ObamaCare bill is for America, the destruction of the U.S. dollar, continuing runaway spending driving the deficit up to astronomical, impossible levels, and loss of global confidence in the future of our country is even worse.

If you thought the last two years were bad economically, you don’t really want to know what the next two years have in store for us. Government actions to prevent panic, restore confidence and keep the system from collapsing only work when the populace believes that its leaders are responsible and know what they are doing. The ObamaCare fixation, the mania to pass a health care bill, any health care bill, in the face of nearly two-to-one disapproval by voters, the lack of any short-term benefits for the average person, and the obvious massive fiscal irresponsibility and malfeasance–is going to destroy what little confidence is left in America’s economic stability.

Wait until the holiday sales numbers come in if you don’t believe me. Wait until the seasonal layoffs and more business closings start to impact unemployment in January, February and March. Wait until panic begins to set in on legislators up for re-election next Fall who are desperate to do something to justify being sent back to Washington.

In historic terms…next year is 1930 all over again. The worst is yet to come.

At a “Town Hall” style meeting the Chinese government set up for him in Shanghai, President Obama also bowed to Chinese Presiden Hu Jintao (watch at about the 1.0 minute mark for several small bows and one deep one):

While Obama’s behavior before Asian heads of state isn’t headline news here in the United States — and is being excused as “simple courtesy” by Democrat political hacks — Daily Mail in the UK headline read: Obama branded “Groveller-in-Chief” after deep bow to Emperor son of Japanese ruler who authorized Pearl Harbour attack.

So why would the President of the United States bow to the leaders of a country in which bowing is considered a breach of their political and social philosophy, etiquette and protocol? Well, one Chinese writer tweeted that “he acts like someone that never meet an asia person & is eagar to please. ignorant!…however, I believe that it is more a matter of common cents…and falling dollars.

President Obama bowed to the Emperor of Japan on his current tour of Asia. It was a full bow, with his upper body almost at right angles to the ground. Here’s the video:

Here’s what the New York Times had to say about the President of the United States bowing to the Emperor of Japan:

…the image…was indelible: an obsequent President, and the Emperor of Japan. Canadians still bow to England’s Queen; so do Australians. Americans shake hands. If not to stand eye-to-eye with royalty, what else were 1776 and all that about?

…But the “thou need not bow” commandment from the State Department’s protocol office maintained a constancy of more than 200 years. Administration officials scurried to insist that the eager-to-please President had not really done the unthinkable.

From this point on, things just get worse for “the first Pacific President. Much worse.

And that means that if the current Senate bill passes, every taxpayer is going to be required by law to pay for abortions to be performed. No matter what your personal feelings, moral values and religious principles are, your money will be going to fund countless numbers of abortions. And if you don’t participate in the system, as Moe Lane pointed out, with video showing Nancy Pelosi stating it clearly, then you will go to jail.

This is becoming a problem of Biblical proportions.

You can read about it yourself in the linked pdf of the actual bill if you have any doubts. Starting on page 118, line 7, section 1303 of the massive, 2,074 page bill, under Voluntary Choice of Coverage of Abortion Services, the HHS Secretary is given the sole authority to decide when abortion is allowed under the government-run health care plans mandated by the bill. Senator Reid’s plan also requires, on page 120, line 13) that at least one insurance plan covers abortions.

And all enrollees in the government-run health care plan will be charged a monthly premium to pay for abortion coverage for those who choose to have it. Not just those who elect to have abortion coverage. All enrollees.

Erick very rightly points out that the health care fight cannot hinge on abortion. But there are a few Democrat Senators who are not in favor of federal funding being used to kill unborn babies. Two of the three remaining hold-outs on voting to allow the bill to procede are also against public funding of abortions. One of them, Mary Landrieu of Lousiana, is being handed what ABC news points out is a targeted $100 million dollar payoff to buy her vote in favor of abortion.

Senator Landrieu originally said that she would decide by today how she would vote; she now has put off the decision until Friday. Perhaps the fact that ABC broke news of the massive payoff to her is giving her second thoughts.

I hope so. But since the latest post on her Senate website indicates that the Senate bill, “while imperfect,” is a step in the right direction–I think I know what her annoucement on Friday will be. And no matter what rationalization she uses, voting in favor of the motion to procede is a vote in favor of using your tax dollars to fund abortion.

Senator Ben Nelson indicated that he would not vote for a bill that did not contain abortion restrictions at least as tough as those in the bill that passed the House. He does not seem to be reading the same bill that I have read, and that you can read. It not only is not restrictive of federally-funded abortions, it mandates abortion funding.

But Senator Nelson apparently has also decided to vote to allow debate to begin on the bill, and is falling back on the excuse that a vote to allow debate to begin–which requires 60 votes and could stop the bill from proceding–is not the same as voting for the bill itself. And since that only requires a simple majority, and is a probable foregone conclusion to pass without fillibusters and other procedural tricks, Senator Nelson is at best being disingenous.

Any Senator who votes in favor of the motion to procede, is voting in favor of the bill passing. To say anything else is to say something that simply isn’t true. The fact that Senator Nelson is saying that he will fillibuster the vote on the bill is encouraging, but it still means that the bill will be one step closer to passage when, and if, he follows through on his threat.

Even Sen. Lindsey Graham believes that inclusion of a public option in a final health care bill that passes and is signed into law will destroy private health care in the United States. And that means, if he and other observers are correct, that in a few years everyone in the United States will be required to pay, out of each paycheck, to fund what many consider to be the murder of millions of innocents…or go to jail for not participating in the system. Nancy Pelosi seems quite intent on making sure of that.

If the health care bill passes the Senate, the final bill President Obama signs into law will include both a public option and federal funding of abortions. That is a virtual certainty. And every one of us, no matter what our beliefs or values, will be paying for abortions under threat of imprisonment. We will all be complicit in the system, and in the continuing the millions of abortion deaths in our country.

Count on it. Do something to make sure it doesn’t happen.

Get on the phone and call Senator Ben Nelson and Senator Mary Landrieu and let them know how you feel about their principled talk on not voting to fund abortions with your tax money. Call Senator Blanche Lincoln of Arkansas and give her another reason to not vote for the bill–she is the only other Democrat hold-out at this point.

And do something more. Call members of your church who feel the same way you do. Put Senators Nelson, Landrieu and Lincoln on your church Prayer Chain if that’s possible. Call family members and like-minded friends. Ask them to call and make their feelings know.

Make sure the bill is stopped on the procedural motion to procede while it still can be stopped.

Here’s what the New York Times had to say about the President of the United States bowing to the Emperor of Japan:

…the image…was indelible: an obsequent President, and the Emperor of Japan. Canadians still bow to England’s Queen; so do Australians. Americans shake hands. If not to stand eye-to-eye with royalty, what else were 1776 and all that about?

…But the “thou need not bow” commandment from the State Department’s protocol office maintained a constancy of more than 200 years. Administration officials scurried to insist that the eager-to-please President had not really done the unthinkable.

From this point on, things just get worse for “the first Pacific President. Much worse.

Of course, that quotation from the New York Times doesn’t refer to President Obama. Their criticism was for President Bill Clinton in 1994. And the “bow” that the Times was so upset about back then wasn’t a full-out, upper-body-bent-almost-parallel-with-the-floor, Japanese cultural bow of a peasant to the living embodiment of a god on earth. No, what the times was complaining about was an “almost bow” by Bill Clinton:

It wasn’t a bow, exactly. But Mr. Clinton came close. He inclined his head and shoulders forward, he pressed his hands together. It lasted no longer than a snapshot, but the image on the South Lawn was indelible: an obsequent President, and the Emperor of Japan.

As I write this, the New York Times has not indicated their reaction to the Obama-bow, however a lot has changed in fifteen years and I doubt they will express outratge. And this is not, of course, the first time that our current president has committed a breach of protocol and custom by bowing down to a foreign head of state. You might remember that he did the same thing while meeting the King of Saudi Arabia.

But why all of this controversy over a simple gesture of politeness?

Well, because politeness isn’t what it is. The act of bowing to a monarch or head of state is an indication of subservience, not of politeness. It indicates that the person you are bowing to has power over you, and that you acknowledge that fact. In Japan, people bow to those who are their superiors — their employers or elders, for example. And the depth of the bow indicates exactly how superior the person is. The lower you go, the lower you acknowledge that you are.

It would have been very hard for President Obama to have bowed any lower than he did before the Emperor of Japan and the King of Saudi Arabia unless he had gone down on his knees on the floor.

And that, perhaps, would have been overkill.

What makes this worse, from a protocol standpoint, is that this was not Barack Obama bowing to the Emperor of Japan. This was a state visit, and Barack Obama, as President Barack Obama, was representative of the United States of America. It is the same diplomatic mysticism that says that foreign embassies are extensions of the soil and sovereignty of a foreign nation and not really part of the country that they stand in. President, Kings and Emperors are symbols, not people.

It was the United States of America bowing low and lowly before Imperial Japan. And before that, doing the same before the Kingdom of Saudi Arabia.

Surprisingly, however, President Obama did not bow to the Queen of England when they met.

Obviously, one might say, after having made a protocol error in Saudi Arabia, President Obama learned from his mistake and acted correctly when in the United Kingdom. That answer remained valid until yesterday, when he bowed before the Emperor of Japan.

One might ask, “Why did the President of the United States, after having made what could be called a “novice” error in bowing to the King of Saudi Arabia, and correctly behaving in England, make the same mistake again while meeting the Emperor of Japan?” His action in Japan certainly calls into question President Obama’s judgement and memory, if not his intellect.

His actions raise an even more interesting question: “Why did President Obama bow to the heads of state of two nations who hold a substantial majority of current U.S. debt, but not bow to the head of state of one of our strongest allies?” Surely the answer couldn’t be simple “sexism,” could it? Obsequious behavior to kings and emperors but superiority to queens? Surely not.

On the surface, the Obama bows appear to simply be a matter of the Obama administration recognizing the reality of America’s new place in the International Economic hierarchy. A reality where a spendthrift American government is at the mercy, and under the control, of those nations who supply our consumer goods and our oil. A global pecking-order in which America obeys the dictates of foreign nations in Asia, the Middle East and Europe on which wars are justified, which laws should be enforced and how high a standard of living U.S. citizens deserve. A New World Order where the United States is a debtor to all, and a shining beacon of hope to none.

An America, in fact, that is the triumph of American Liberalism. America as American Liberals have always perceived it and wanted it to be. An America that knows its place…and willingly takes it on the world stage.

Or perhaps “backstage”might be a more appropriate way to phrase it.

And this raises what may be the most important question of all. Will President Obama bow before China’s head of state?

China, after all, holds the majority of current U.S. debt. What is fair for the heads of state of the number 2 and number 3 U.S. debt-holder nations should certainly be fair for the head of state of the country we are most obligated to and dependent upon. Where does one draw the line once one has established a precedent?

Having bowed down in Japan and Saudi Arabia, if President Obama fails to bow down in China will that not be taken as a deliberate national insult in face-conscious Asia? And coming at a time when China has hinted they will be dropping support for the dollar?

So, is it an intellectual insufficiency, sexism, or economics that caused President Obama to bow down in Saudi Arabia and Japan? China will tell. The last questions are how low will he — and we — go? And why?

The problem is…Bill Owens might not have won the 23rd District Congressional seat after all.

Both of the things that Doug Hoffman was told on election night turn out not to have been true. A “snafu” by officials in Oswego county and elsewhere caused Hoffman’s vote to be under-reported. He actually won Oswego County by 1,748 votes — 12,748 to Owens’ 11,000. District-wide, Owens lead over Hoffman has now shrunk to 3.026 votes, not 5,300. And the race is going to be decided by 10,200 absentee ballots, many from the military, that remain to be counted.

NY-23 is the home of Fort Drum and the Army’s 10th Mountain Division, by the way.

That’s right. The race in NY-23 is not official yet. Doug Hoffman very well may have won.

If the absentee ballots show that Hoffman actually won, then Bill Owens will be removed from office and Hoffman will be sworn in.

And what about the Health Care vote?

The vote is over. The fact that Hoffman conceded based on false information given to him means that the election was uncontested. Legally, there was no bar to Owens being sworn in. The vote stands.

But if Hoffman had not been given that false information…Nancy Pelosi would have lacked at least two votes in the final balloting on Saturday. Two votes because Rep. Cao, the lone GOP Representative voting in favor of the bill indicated that he only voted for it when it became obvious it was going to pass. Take away those two votes, and the tally on the Health Care bill would have been 218-217.

And with it that close, and every single vote mattering as THE vote that would have passed the bill, it is quite possible that one or two more of the handful of “Blue Dog” Democrats who voted “yes,” would have voted “no” instead.

But while no one can know for sure what might have been, and nothing can be done to change what has already happened, one thing is certain. The next time Health Care comes up in the House, there is a very good chance that Bill Owens will not be voting on the issue.

What if he had been a Caucasian born in Selma, Alabama, instead of an Arab-American born in Arlington, Virginia?

What if knowledge of his family roots had caused Joseph Robert Lee to list his nationality as Confederate States of America rather than “United States of America,” the way that Nidal Malik Hasan–born in Arlington, Virginia of immigrant parents, listed his nationality as “Palestinian” on a document he filled out at the Silver Springs, Maryland mosque he attended?

What if he had signed himself as JoeBob while posting on websites where he advocated violent overthrow of the U.S. government if there was an attempt to disarm citizens in violation of the Second Amendment, instead of signing himself NidalMalik in online postings praising suicide bombers as heroes making a sacrifice “for a noble cause,” and suggesting people “strap bombs on themselves and go into Times Square?”

What if it had been Joe Bob who attended the same Evangelical Christian church at the same time as Oklahoma City bombers Timothy McVeigh and Terry Nichols, instead of Nidal Malik attending the same mosque at the same time as Nawaf al-Hazmi and Hani Hanjour, two of the September 11 hijacker terrorists?

What if it had been Joseph Robert Lee proselytizing colleagues and patients while on the job, inviting them to become Christians, instead of Nidal Malik Hasan proselytizing patients and co-workers and inviting them to become Muslims? What if Joseph had passed out Bibles the way Nidal passed out Qu’rans? Would being placed on probation and warned not to do it again have been enough in that case? Or would it have ended his career?

Would Joseph Robert Lee have been dismissed by the FBI as harmless and promoted by Army brass from Captain to Major after exchanging about a dozen emails with a Christian preacher who had ties to the Tea Party movement or the Minuteman Project? Captain Nidal Malik Hasan was cleared by the FBI and promoted to Major after provably exchanging 10 to 20 emails with radical Muslim cleric Imam Anwar al-Awlaki, a known supporter of armed jihad against the United States, and also after Captain Hasan tried to contact several other Al-Qaeda terrorist leaders.

What if Joseph Robert Lee had been a minor member of President Bush’s transition team when he took office in 2001, prior to the 9-11 tragedy, identical to the way Nidal Malik Hasan was a minor member of President Obama’s transition team (see page 32 of the linked, official pdf) when he took office in 2009? Would that have been headlined on the evening news and in newspapers across the nation?

How much of a difference do you think it would have made if the shooter had been an Evangelical Christian who committed this act of treason — the first time in United States history that a commissioned officer in our Armed Forces turned a gun on fellow soldiers and murdered them in premeditated, cold blood? Especially if it had not been the first time in recent years that a member of this particular religious faith had used the teachings of that faith and passages from a book the faith considered to be holy as justification for killing fellow American soldiers? Do you think it would have been reported differently by the Mainstream Media?

How many calls of “don’t rush to judgement” would have been heard from President Obama if the shooter had been Evangelical Christian Joseph Robert Lee?

How many politicians and media pundits would have leaped to defend Evangelical Christians and insisted that they are not all tarred with the same brush because of the actions of the murderer?

How many would have worried about a “backlash” against Christians, or the danger of stereotyping and profiling white southern Americans?

How many questions would have been raised about the judgment, intelligence and fitness to serve of the Commander in Chief of the Armed Forces if this tragedy had happened while George Bush was president? How many allegations would have flown about Republican failures to make Americans safe if the GOP had still controlled both the House and the Senate?

Of course, the outcry that it is America’s love of guns that caused the deaths would have been a lot louder, because that’s the one thing you can count on as a politically-correct, enlightened, knee-jerk response no matter what the shooter’s name would have been. But the response from the Democrat President, Speaker of the House, and Senate Majority Leader would certainly have been a lot quicker, a lot louder, and a lot less cautious and concerned about stirring up bigotry and feeding negative stereotypes if the shooter had been named Joseph Robert Lee.

And I believe that I can say this quite positively based on other recent events that showed much more of a “rush to judgement” feeding bigotry and negative stereotypes. And in this I am completely agreeing with Rush Limbaugh, who said it earlier today.

But the real question the Fort Hood murders raises is how long we are going to continue to allow “political correctness” to place American lives in jeopardy?

Major Nidal Malik Hasan himself warned of the dangers of Muslims in the U.S. Armed Forces, in a presentation he gave while still at Walter Reed titled, The Koranic World View As It Relates to Muslims in the U.S. Military. He warned that for pious Muslims, He ended that presentation with a statement that is even more chilling in hindsight than it first appeared: “We love death more then [sic] you love life!”

And the most chilling thing about that statement, ending a presentation in which Hasan, among other points, justified armed overthrow of a non-Islamic government such as our own and establishment of a world-wide Islamic state under strict Shari’a law, is that it is a view shared by 65.2% of mainstream, non-extremist Muslims throughout the world, according to a 2007 survey conducted by the University of Maryland and World Public Opinion.

But in the face of statistics, and statements to the contrary from radical Muslims, the liberal media prefers to view Hasan’s actions as just another example of a solider — trained to violence — “cracking” under stress and reacting violently as he was trained to do. Basically, the same response we heard President Obama give today. The same response that will no doubt become the official verdict on this couldn’t-possibly-be-a-terrorist-act “incident” unless men and women of principle within the military and intelligence communities make sure that the full truth is told.

How very different things might have been if the shooter’s name had been Major Joseph Robert Lee.

And how much simpler for the current Powers That Be.

And what exactly is acceptable health care coverage in Nancy Peolosi’s Brave New America?

Well, according to the Congressional Budget Office, the lowest cost for a non-group family insurance plan under the provisions of Speaker Pelosi’s bill would be $15,000 a year in 2016. The bill requires that coverage include all individuals (or married couples, if filing jointly) at a rate of 2.5% of their income. It also requires a similar level of coverage for each of their children.

The Senate version of the bill removed the jail-time penalty, but keeps in the fines. Speaker Pelosisi obviously feels that more coercion than simply a quarter of a million dollar fine is necessary.

If you were wondering if it is important to be in Washington tomorrow to be part of the Second Health Care “House Call” on Washington…now you have another reason why it is important. And if you needed any more reasons to call the Representatives most likely to need reminders of why they should vote NO on the Speaker’s bloated, health care budget-buster…now you have 15,000 more reasons.

And if your Congressional Representative is on this list of people leaning no, wavering or having said they will vote no, then this weekend is a really good time to call them personally and tell them exactly how closely you are watching what they are going to do about Speaker Pelosi’s bill.

I’m in Asheville, North Carolina. Heath Shuler is my Representative. He’s been hearing a lot from me lately about how we are counting on the Blue Dogs keeping their word. And hearing what is going to happen to them in the next election if they don’t keep their word and vote No.

Go thou and do likewise. They need to hear from us enough to shut down their phone lines.

Wrong.

That official 10.2% figure really doesn’t tell the truth about unemployment in America. The real unemployment figure is more than twice the official 10.2% rate–a lot higher than you know, even if you already know about some of the number-jumbling that is normal in “official” government statistics. The bad news, and the full facts, paint a bleak picture of the months ahead.

The official unemployment number doesn’t include people who have given up looking for a new job because of months of not being able to find one.  It also doesn’t include people who have taken a part-time job just to survive in the short-term, but whose long-term survival requires them to find full-time employment.

What this means is that if you were a highly paid software engineer with Master’s degree whose company went belly-up a few months ago–and you are now working nights at a gas station to put food on the table–you don’t count in the official unemployment rate of 10.2%.  You have a job.  It doesn’t matter that you are now making a fraction of what you used to make in what you consider to be a temporary, fill-in job. It doesn’t matter that you are still sending out resumes and trying to land interviews. It doesn’t matter that you have lost, or are going to lose, your house. You don’t count.

That isn’t all. You also don’t count if you found yourself laid-off in a company down-sizing back at the beginning of the summer, and after four or five months of getting turned down for job after job you have given up looking for a job because you are discouraged. The same is true if you have taken a break from job-hunting until the economy improves, or in hopes that your former employer will re-hire you as things get better.  If you weren’t actively looking for a job in October, then you aren’t officially unemployed.  You don’t count. You are in political Limbo.

The official adjusted unemployment rate, when you add in all of the people who are a.) still out of a job but have given up looking for a new one, and b.) used to have full-time jobs but have had to take a part-time job to try to make ends meet, is 17.5%.

17.5%. Not 10.2%.

This method of trimming huge numbers of people out of the official unemployment numbers is fairly recent. It started in 1993 during the Clinton administration. And so, while we can say conclusively that the Obama administration has produced the highest unemployment toll since 1993, we can’t easily compare these numbers to the recession of 1983, or unemployment during the Great Depression.

But we can look at the official data available under different headings, even things up as much as possible, and get an idea of how bad things really are right now–and how bad they are likely to become. And the picture is not a rosy one.

Looked at that way, U.S. unemployment during the Great Depression (or the First Great Depression, as historians are likely to call it after the next few years), hit a record high of 24.6%. It took four years for it to reach that level after the stock market crash of 1929. One year after the Crash of ’29, American unemployment was 8.5%. Two years after the Crash, in 1931 it hit 15.9%. The following year, in 1932, it bottomed out at 24.6%.

One year after the beginning of our current “economic crisis,” the comparable U.S. unemployment rate is already higher than unemployment was in 1931. How bad will our unemployment be this time next year? Two years from now?

Unemployment remained high in America throughout the 1930s, and only dipped below 15% when World War II began. By 1942, unemployment had plummeted to 4.7% because of our mobilization for the war.

You might remember that Democrats were in charge back then, too.

Remember those recent warnings from the Obama administration that unemployment was going to remain high for the next several years? They are basing that on history as much as on economic projections. The last time this happened, high unemployment lasted for 12 years. And it took a global war to bring it down to pre-Depression levels.

17.5% real unemployment today versus 24.6% unemployment at the depth of the Great Depression of the 1930s.  Well, at least it isn’t worse.

Or is it?

The problem is that 17.5% isn’t the actual, current unemployment rate either.  Things are really worse than that already.

If you lost your job more than a year ago, and have given up looking for a new one until the economy improves or out of frustration, you aren’t counted at all in any of the government’s official statistics.  For all practical purposes, you have simply ceased to exist as far as the government is concerned.  Retirement-age people–even those who have to work to supplement their incomes–aren’t counted either.  Neither are the disabled who are able to work but have lost their jobs.

John Williams, of American Business Analytics and Research, an economist who runs the Shadow Government Statistics website, estimates that when you add in the people who are no longer officially counted anywhere but have lost their jobs…the October, 2009, most accurate figure for the October, 2009, American unemployment rate is 21.4%.

21.4%. More than one out of every five people in the United States is unemployed.

And that is just the national, averaged rate. In some parts of the country, such as Michigan, the rate is much higher already. Just as it was during the Great Depression, where cities such as Detroit, Cleveland, Toledo and many others had unemployment rates of 50% or more–some up to 90% unemployed.

Remember that “change” that President Obama and the Democrats promised in last year’s election campaign?  Remember the jokes and bumper stickers about how the only change that voters would actually have would be the change jingling in their pockets?

Well, for one out of every five Americans who used to be working…even pocket change is hard to come by these days.

The sky-high unemployment rate getting worse every month from the deficit-busting policies of President Obama and the Democrat-controlled Congress is going to be the Grinch that steals Christmas this year. Spending is going to be down.  Malls are going to remain Ghost Towns.  Retailers that have held on hoping for a Christmas miracle are going to cut back or close completely early next year.

And then things are going to get worse.  Much worse.

At the same time, support for the Democrat-led House and Senate has fallen to all-time lows. Support for massive government programs like Obamacare and ongoing, nationalizing bailouts is below 50% and dropping farther every day. In addition, poll numbers indicate, at this point, that the GOP will capture current Democrat-held governorships in Virginia, and in New Jersey. Things, for the GOP, appear to be looking quite good.

Appearances, however, can be deceiving. If you are an elected Republican official, party leader or strategist, and you aren’t seriously worried right now about your prospects for 2010, 2012, and beyond…you should be. Let me tell you why.

The reason is quite simple, and contained in a recent Rasmussen poll of Republicans who plan to vote in 2012 state primaries:

A new Rasmussen Reports national telephone survey finds that 73% think Republicans in Congress have lost touch with GOP voters from throughout the nation.

Look carefully at that statistic. This is a survey of hard-core Republicans who are already planning to vote in the 2012 primaries–solid, dependable Republican voters. And the survey says that nearly three out of every four of those voters you depend upon believe that their Republican Congressional representatives are out of touch with them. They do not like what you are doing and how you are doing it.

And that means that they are no longer dependable voters who can be counted on to pull the lever for anyone who has an R next to their name and is the endorsed Republican party candidate.

Case in point: the New York 23rd Congressional district and your endorsed “Republican” candidate Dede Scozzafava. In what should have been an easy race for the GOP, she is currently running in third place behind the Conservative candidate Doug Hoffman and the endorsed Democrat candidate.

And Doug Hoffman seems likely to beat both the endorsed Republican and the endorsed Democrat. The latest polls show that he has a slim, 4 point lead in the race, with 22% remaining undecided.

The fact that, nationally, three out of four Republican voters are not happy with current Republican incumbents and leadership means that they are open to vote for somebody else who is not out of touch with them. Somebody like Doug Hoffman.

No matter how you try to spin the New York Republican Party selection of Ms. Scozzafava as their candidate, the fact is that she is the most liberal candidate running in that race. She is more liberal than her Democrat challenger. She is so liberal that liberal blogs are endorsing her. And she is running in last place in a district that has sent a Republican to Congress in every election since the Civil War.

There is a much-needed lesson there, if you, the leaders and elected officeholders of the Republican Party will learn it. As Rush Limbaugh often says, “Conservatism works every time it is tried.” And of course, he is right.

A current Gallup poll shows that when Americans are asked to identify themselves as either conservative, moderate, or liberal, the majority, 40%, identify themselves as conservative. 36% identify themselves as moderate, and only 20% choose to call themselves liberal.

At the same time, Gallup polling also shows that only 27% of Americans currently identify themselves as Republicans. When you add in the 15% of self-identified moderates who say they tend to vote Republican, you have a block of 42% Republican voters. That is remarkably close to the number of people who identify themselves as conservatives.

So how do you siphon off 9% more voters from the moderate block to get to 51% and be assured of winning elections? Certainly not by running candidates who are liberal. Those statistics cited above show that conservatives outnumber liberals in this country by a two-to-one margin. The New Jersey governor’s race is illustrative of what voters are looking for.

New Jersey is a Blue state. The Republican candidate, Chris Christie, is about as conservative as a candidate can be and still be viable in New Jersey. In a head-to-head match-up, polls show that Christie would beat incumbent Democrat governor Jon Corzine. But there is a third candidate in this race.

Chris Daggett, the New Jersey third party candidate, is an environmentalist and former EPA administrator who has worked for and in Republican administrations. He can be termed a social liberal, since he is pro-choice and pro-gay marriage. He is running as a fiscal conservative, and he is taking votes away from both Christie and Corzine. Latest polls indicate he is now hurting Corzine more and that Republican Christie is in the lead.

Looking at the best current polling numbers, Christie and Daggett have the combined support of from 53% to 55% of the New Jersey electorate. Both are presenting themselves as fiscal conservatives, and a majority of voters in a liberal state are supporting them. Conservatism is a winning strategy even in a liberal state like New Jersey.

If, as now seems likely, the incumbent Democrat governors of Virginia and New Jersey are defeated by Republican challengers next week, don’t allow yourself to bask too long in the afterglow of victory. I hope that you–the Republican leadership and GOP incumbents up for election next year–instead concentrate and learn from what is going to happen in that single Congressional district in New York state. Remember that poll from Rasmussen Reports about how three out of four of us out here don’t like they way things have been going in the Republican party. We don’t like RINO candidates who are not genuinely conservative. And we like left-of-RINO candidates like Dede Scozzafava even less.

Your political future–your careers–depend upon you getting the message, and changing the way you do business. Because business as usual isn’t going to work any more.

If you think I’m kidding, just consider that a lot of us are looking at Doug Hoffman, watching a true American political success story unfold before our eyes, and thinking that maybe–just maybe–we could do the same thing in our own Congressional districts.

All over the country.

Everywhere.

Four hundred and thirty-five Doug Hoffmans.

Think about that for a moment. If I were you, I’d be very worried it might happen. And I’d work quickly, and very hard, to make sure that an awful lot of those three-out-of-four dissatisfied Republicans don’t think we need to do it.

Which brings me to my topic.

The D-word has passed the lips of many people over the last couple of weeks. That was unthinkable even a month or two ago, and would have had the speaker labelled as a kook and marginalized as an alarmist. But now, we routinely hear people warning that another Depression-not-recession is looming and can only be staved off by swift, decisive action by the Government.

Take a deep breath for a moment, let the panic subside, and let’s consider what exactly causes a Depression and how we can avoid one before it happens, or get out of one after it starts. That is, after all, what we are talking about. It is what everyone wants. And it should be a part of any discussion of the crisis we are facing.

Now, discussions of economics and economic theory have a tendency to make people’s eyes glaze over, so I am going to keep this direct, specific and cut through some of the tech-speak. This is a basic pocketbook issue for all of us, and I firmly believe that you don’t have to have a doctoral degree to understand it. A lot of it is common sense, but there is not a lot of common sense demonstrated in politics and economics usually. As a sort of guide and outline for discussion–and as a fairly impartial assessment of current thinking–I am going to be quoting passages from the Wikipedia article on the Great Depression. It isn’t perfect, but it is in this case quite useful.

So, from the Wikipedia article on The Great Depression:

“Recession cycles are thought to be a normal part of living in a world of inexact balances between supply and demand. What turns a usually mild and short recession or “ordinary” business cycle into a great depression is a subject of debate and concern. Scholars have not agreed on the exact causes and their relative importance.”

We begin, therefore, with an admission that there is no consensus of opinion among economic and financial experts on exactly what causes a Depression. Which of course means that there is no consensus of opinion on how to prevent one, or what to do to get us out of one. And that raises big questions about the need for speed this past week in passing legislation most Senators and House members didn’t have a chance to read, and wouldn’t have understood even if they had read it since it was long on money and short on explanations. And things get even more amusing, confusing and worrisome after the jump…

Also from Wikipedia:

“In early 1930, credit was ample and available at low rates, but people were reluctant to add new debt by borrowing. By May 1930, auto sales had declined to below the levels of 1928. Prices in general began to decline, but wages held steady in 1930, then began to drop in 1931. Conditions were worst in farming areas, where commodity prices plunged, and in mining and logging areas, where unemployment was high and there were few other jobs. The decline in the American economy was the factor that pulled down most other countries at first, then internal weaknesses or strengths in each country made conditions worse or better. Frantic attempts to shore up the economies of individual nations through protectionist policies, like the 1930 U.S. Smoot-Hawley Tariff Act and retaliatory tariffs in other countries, exacerbated the collapse in global trade. By late in 1930, a steady decline set in which reached bottom by March 1933.”

At first glance, and allowing for differences caused by the passage of time, this sounds an awful lot like what we are facing at the moment. So is it any wonder that Ben Bernanke, who has studied the Great Depression to death, is behaving as if the sky is falling?

We should all be concerned. Nobody wants another Great Depression (except possibly and cynically certain members of a certain political party who might advance their careers and their socio-political agenda through a depression in the same way they tried to gain a political advantage by causing America to lose a war…but I digress.)

The question really isn’t if we “want” to avoid another Depression, the question is “how” can we avoid another Great Depression. And there are basically three schools of thought on that question.

First, the Classical Economics viewpoint–and for the technically minded, I’m lumping monetarist views and neo-classical supply-demand economics in here too. This approach says that the Great Depression was caused by a contraction of the money supply. The Stock Market crash of 1929 would have been just another recession if it hadn’t been for a lot of bank failures happening at the same time that reduced the availability of credit and the drying up of capital.

This situation was made worse by too much debt caused by cheap, over-available credit that was fueling the economy. When the economy faltered and debt began to be unsuccessfully called in, it triggered the collapse of banks. That led to panic and runs on banks, which led to a cascade of bank failures.

Sound familiar? It should. It is Ben Bernanke’s personal nightmare, and the biggest question that should be asked of him is why with his theoretical monetarist stance and his broad knowledge of the Great Depression, he did not spend every moment since becoming Fed Chair shouting warnings and insisting that something be done. And while Bernanke is right on many of his fears about the situation we are in, he is wrong in his approach to solving those problems. Theoretically a monetarist, for some schizophrenic reason he has been trying to use Keynesian solutions at odds with many of his theoretical beliefs. But more on that below.

So, to anyone who believes Classical Economics–and there are not many of them in positions of authority or power any more–our current crisis is a repeat of many of the problems that led to the Great Depression of the ’30′s. Or, in the words of Yogi Berra, it is “deja vu all over again.” The solution now, as the solution would have been then, is to provide liquidity to the banks through the Fed (as has been done on an ongoing basis) and prevent a cascade of bank failures (increase the FDIC limit, make targeted bail-outs, not wholesale ones, and let sound financial institutions buy up unsound ones.)

To round out the Classical theory, add into this mix overproduction caused by the spread of electricity and better industrial machinery in the first decades of the twentieth century, a downturn in employment as fewer workers were needed to produce greater numbers of products, and underconsumption since unemployed workers don’t buy that many products and you have the Classical causes of the Great Depression. But the Classical theory is not the only one around, as I mentioned.

The second school of thought on what caused the Great Depression is Structural Economics, principally Keynesian economics. Keynesians like to focus on the idea that the Great Depression resulted from a large-scale crisis of confidence. Depressions can be avoided by bolstering confidence. You can do that in part by slapping more regulations on the financial system–because an unbridled market is a robber baron market as everyone knows, and people have confidence in Big Government and know that Big Business is inherently bad.

Ahem.

Secondary causes of the Great Depression for Keynesians were underconsumption because of high unemployment and overinvestment (an economic bubble). Toss into the mix malfeasance by bankers and capitalists and incompetence by government officials who didn’t enforce enough regulations, and you have their recipe for the Great Depression.

Ben Bernanke, while theoretical a monetarian, has been doing things as Fed Chair that are mainly Keynesian in his attempts to manage and fix national economics (macroeconomics).

(An aside to the esoterically minded: I know, I know, Bernanke is supposed to be primarily a monetarist, but a case can be made that monetarism is just a special case of Keynesian theory for reasons we don’t need to go into now, and most people don’t give a hoot about these distinctions in label anyway. They simply look at what a person says and what a person does.

if you want to read a very good analysis of Bernanke’s approach to managing the economy, here is a link to a Forbes article from 2006 that is very enlightening.

Keynes was a very big advocate of socializing investments, and Bernanke and Paulson have been travelling that path a lot lately. With that, I could basically rest my case that Bernanke is channelling Keynes in this situation. However, if you have any lingering doubts, remember that Bernanke is the one who said, “We have the keys to the printing press, and we are not afraid to use them.” which is not the statement of a monetarist and may go down in history as a line as famous and fatuous as the one falsely attributed to Marie Antoinette: “Let them eat cake.”)

Heads are going to roll over the mishandling of this crisis at some point or another.

But back to the second main view of what caused the Great Depression. For Keynesians, it is all a confidence game, and one way to instill confidence is to pump large amounts of money into the system and let everyone know the government is on the job and nothing can possibly go wrong. (Another word for “pumping up” of course, is inflation, but we aren’t going to mention that, are we?)

Bad thoughts aside, if this approach is followed and confidence is maintained, then the shee…ah, people, will keep on buying things, keep on investing their money, and everything will be hunky-dory on Main Street, whatever that means. So, demand will keep up with supply on a microeconomic level and There Will Be No Great Depression. This is the “in” thing among economists at the moment–a double standard of Keynes theories for “big” or macroeconomics, and neo-classical theory for “small” or microeconomics.

“Small” by the way, means how you and I do economics. Managing a household, keeping to a budget, making personal and family savings and investment decisions, figuring out what not to buy when gasoline prices go through the roof because refineries and pipelines shut down temporarily due to a hurricane, etc., etc., etc.

Wouldn’t it be nice if you and I could switch over to Keynesian economics to manage our households whenever we felt a “crisis of confidence” in our ability to buy what we want to have? All we’d have to do is go into the family room or our office, crank up the computer and the laserjet printer, print out a few dozen sheets of colorful paper money, cut them out neatly and carefully, and go buy whatever we wanted to buy.

Or, we could just write as many checks as we wanted to on our bank account and run an ever-increasing deficit that the bank would be obliged to allow. Don’t worry about it. Just keep that negative checking account balance rising from month to month as we buy anything we want to buy, from emergency expenditures to get the car repaired or pay for that leg we broke on our last ski trip, as well as the luxury ski trip to Vail where we broke our leg.

Maybe our kids will pay off our checking account deficit. Or their kids. But who cares. Don’t worry. Be happy.

A moment’s thought will be enough to show you why the Fed, and the government…and the bank, of course, do not think that Keynesian microeconomics are a good idea for you and I to use in our everyday lives. No, Keynesianism is reserved for governments since only they know enough and are responsible enough to use it wisely and with careful, measured discretion.

I’ll pause here a moment until you stop laughing or swearing, as the case may be.

Ready to go on? Good.

The third current school of thought on why depressions happen is Marxism. I’m going to ignore Marxism in this discussion, since even though many on Capital Hill may be closet Marxists, for the most part they are not insane enough to advocate it as an economic theory the U.S. should be basing decisions on.

At least, not yet.

Besides, the Marxist argument is that basically depressions happen because capitalists are evil and exploit the masses, separating those who produce from the just rewards of their labors, and a pox on the whole system anyway. Not a lot there that is useful or works in real life.

Instead of discussing Marxism, I want to talk about one additional theory of how the Great Depression happened. It is a theory that all fiscal conservative–and all Republicans–should be thinking about right now. Because if this theory is correct, then actions by the Senate yesterday and probable actions by the House tomorrow will inevitably insure that happy days are indeed here once again.

“The severity of the Wall Street crash, he argued, was not due to the unrestrained license of a freebooting capitalist system, but to government insistence on keeping a boom going artificially by pumping in inflationary credit. The slide in stocks continued, and the real economy went into freefall, not because government interfered too little, but because it interfered too much.”

This statement is from the forward to the Fifth Edition of a book I heartily recommend to everyone, called America’s Great Depression by Murray N. Rothbard. It is available freely online as a PDF file from the Mises Institute.

The Mises Institute espouses economic beliefs that fall under the Austrian School label, and they are rather libertarian in philosophy. I am not going to go into their background any farther, but if you have an interest google “Ludwig von Mises” or check wikipedia.

The Austrian economic school of thought believes that the primary cause of the Great Depression was the expansion of the money supply during the 1920s by the Federal Reserve. That expansion led to an unsustainable credit-driven boom, or bubble, in the U.S. economy that burst with disastrous consequences for our country and for the entire world.

Asset prices (the price of stocks and bonds) and the price of capital goods went up and up until they were tremendously over-valued. By the time the Fed tried to get control in 1928 by raising interest rates in an attempt to tighten things up, it was too late and a depression was inevitable. Interference in the economy by the government didn’t work since the system was overbalanced and needed correction, and attempts to prop up the economy after the crash of 1929 made things worse. The death blow came through Congressional action instituting protectionism and tariffs, and an ill-advised raising of tax rates in an effort to redistribute wealth.

According to the Austrian school, big government intervention was directly responsible for turning a serious recession that would have lasted a couple of years into a major global depression that dragged on and on until World War II. You can even make a case that the Great Depression was directly responsible for World War II, since economic conditions in Germany and Europe provided the environment in which Hitler could rise to power.

And there is something else about the Rothbard’s analysis that is particularly important for us to consider now, as the House considers passing one of the biggest and quickest pieces of big government intervention in the private sector ever conceived. Quoting again from the Wikipedia article on the Great Depression:

“Rothbard criticizes Milton Friedman’s assertion that the central bank failed to inflate the supply of money. Rothbard asserts that the Federal Reserve bought $1.1 billion of government securities from February to July 1932, raising its total holding to $1.8 billion. Total bank reserves rose by only $212 million, but Rothbard argues that this was because the American populace lost faith in the banking system and began hoarding more cash, a factor quite beyond the control of the Central Bank. The potential for a run on the banks caused local bankers to be more conservative in lending out their reserves, and this, Rothbard argues, was the cause of the Federal Reserve’s inability to inflate.”

Anyone looking for an answer to why the stock market didn’t crash disastrously on Monday, then recovered somewhat on Tuesday and stayed basically unchanged on Wednesday, then fell about 350 points the day after the Senate passed their bloated version of the Bailout should look at the approval numbers of Congress. I would be willing to bet that the Stock Market will fall more if this Bailout passes than it has already fallen over the past few days. Do you seriously think that the American public is going to make decisions on what they do with their money based on faith in the ability of Congress to fix anything?

And does anyone seriously believe that, if the Bailout goes through, credit is going to loosen up now much more than it did back in 1932? Haven’t we ensured through this mess that non-conservative bankers and institutions are not going to be around? And that lending policies are going to continue to tighten as bankers wait for another shoe to drop? And that after being frightened out of their wits most people are going to tighten their belts and not make major expenditures for a while since they don’t know when the next crisis will strike?

Use some common sense.

This massive infusion of tax dollars is not going to “restore confidence” because people have been hearing a constant drumbeat from the Democrats on how bad the economy is, how shaky things are, and how it is all the fault of Republicans and their buddies on Wall Street and in the Big Oil Companies. Now the Democrats are leading the charge in a bail-out of Wall Street and the banks–and yes, I know that this isn’t about that, it is about credit for small businesses and car loans and student loans and home loans, but the volume of negative phone calls and emails Reps and Senators keep receiving should demonstrate that it is Wall Street and “Big Business” that is still taking the hit here.

And Republicans of course. Republicans always take the hit.

Thanks to the Democrats.

And who loses if the Bailout fails, as I am certain it will fail? Well, obviously, the average American loses. And Republicans will lose, quite obviously, for they will take the blame for failure no matter what happens. The Democrats are too good at spinning the blame game, and the press is too good at making sure the Democrat perspective is the only one that gets heard.

But the country is going to lose and lose big if something is not done to stop what comes next. The Democrats have already positioned themselves for what comes next in ways that nobody on the other side of the aisle are thinking about as we slouch towards Bethlehem this election year.

Again, quoting from Rothbard: “Franklin D. Roosevelt, elected in 1932, primarily blamed the excesses of big business for causing an unstable bubble-like economy. Democrats believed the problem was that business had too much power, and the New Deal was intended as a remedy, by empowering labor unions and farmers and by raising taxes on corporate profits. Regulation of the economy was a favorite remedy. Some New Deal regulation (the NRA and AAA) was declared unconstitutional by the U.S. Supreme Court. Most New Deal regulations were abolished or scaled back in the 1970s and 1980s in a bipartisan wave of deregulation. However the Securities and Exchange Commission, Federal Reserve, and Social Security won widespread support.”

Can you say “New Deal Part Deux?” I think that if you cannot, you had better learn to say it pretty fast. Re-read that quotation above and change “Franklin D. Roosevelt” to “Barack Obama, Nancy Pelosi and Harry Reid” and see if the first couple of sentences doesn’t sound a lot like the current Democrat talking points.

Eerie, isn’t it.

And Barack Obama keeps getting higher in the polls as John McCain stays silent or goes along with the march toward an extremely unpopular, massively expensive, precedent-setting government intervention in the private sector. And the rest of the Republican Party is following along like lemmings toward a supposed safe haven of the Bailout that is going to turn out to be a huge cliff.

The danger here is not that Barack Obama will ride this crisis into the White House. The danger is that he will ride it into a New New Deal that will institutionalize government control of the economy and every aspect of everyday life in ways that will be as impossible to roll back once enacted as was the “temporary” income tax or the Social Security program.

And that will make any recession or depression that we are heading into deeper, longer and more painful for Americans.

If Republicans, and Conservatives, stand for anything at all anymore, then they had better stand up, stand together, and have the guts to say that they will not stand for this kind of bloated, untried, unproven and un-American government intervention. This is a 700 Billion Dollar albatros that potentially is going to sink the Republican Party and the Conservative movement for decades to come.

What happens if the Dow continues to head south after a Bailout is passed? What happens if it drops 1000 points next week, or 2000 points? Well, one thing that it will mean is that, in the eyes of the majority of Americans who did not favor the Bailout plan in the first place, the people will have been right and Congress will have been wrong yet again. And the Senators and House members who voted in favor of the Bailout are going to be about as popular as the Republican Congress and Herbert Hoover were back at the beginning of the Great Depression.

It might be nice if the Democrats could take the blame on this one this time, especially since it it the Democrats who truly deserve a lion’s share of the blame. Consider carefully what is at stake here.

Failure to pass the Bailout may mean that we have another Great Depression.

But passage of the Bailout may mean that we have another Great Depression too…it depends on which school of economic theory is correct. And we will only know who is right after the fact. And possibly not even then.

And while we’re on the subject of the Great Depression, I will candidly admit that watching the Democrats position themselves as the Saviors of America from financial crisis–and watching Republicans fall in line and fall all over themselves jumping on a bipartisan bandwagon to Hell agreeing with them and implicitly taking blame for a mess Republicans did not cause–makes me feel very much like a small, furry animal who sees Lennie Small walking towards me with a friendly smile on his face.

For mice and for men, things are about to gang agley indeed…

If you are a fiscal conservative then you cannot be in favor of this Bailout no matter what rationalization you use. Any vote other than “no” is a vote from fear and/or short-term self-interest. If you cannot hold to your principles in a time of crisis, then you have no principles.

We are gambling with the entire free market system and every Republican who votes in favor of the Bailout for good, sound, compassionate reasons–or from fear of political fallout if the economy falters farther–is just giving ammunition to Democrats that “they” knew the system wasn’t working, “they” knew deregulation didn’t work and did it anyway, “they” knew that Big Business couldn’t be trusted…and “they” finally voted with the Democrats (who were right all along) when it was too late to prevent disaster.

And “they,” of course, are those evil Republicans who are against the common people and the “little guy.” Republicans are going to take a hit on this one in the short term no matter whether the Bailout passes or fails again. And Republicans are going to be hit with the blame in the short term when the economy continues to head south, as it will no matter whether the Bailout passes or fails again.

If a hit is inevitable, then at least take a hit for something that you truly believe in. In that way, the party and the conservative movement may be positioned to say “I told you so” when massive intervention fails yet again. And we may be able to put the pieces of our broken economy back together quicker and better for the sake of everyone.

Allard (R)
Barasso (R)
Brownback (R)
Bunning (R)
Cochran (R)
Crapo (R)
DeMint (R)
Dole (R)
Enzi (R)
Inhofe (R)
Roberts (R)
Sessions (R)
Shelby (R)
Vitter (R)
Wicker (R)

Sanders (I)

Cantwell (D)
Dorgan (D)
Feingold (D)
Johnson (D)
Landrieu (D)
Nelson (FL) (D)
Stabenow (D)
Tester (D)
Wyden (D)

As gamecock has written elsewhere, let’s defeat it in the House….