Last night, at the State of the Union address, President Obama spoke of a recovery, but the evidence for such a recovery doesn’t really exist.

The national unemployment is now 8.5% (December’s), its lowest level since January 2009, but while some saw this welcome news as something to celebrate, it hides a much darker economic picture: the jobs report vastly undercounts the unemployment rate. Moreover, as of this writing, we don’t know if December’s jobs report is a trend, or if, as some economists predict, economic growth will slow in the first quarter of 2012, forestalling some of the gains made. In November, the unemployment rate fell from 9% to 8.6%, but this was not due to an increase in jobs, but due to a decrease in the numbers of people “actively seeking” them. “The 315,000 who dropped out of the labor market exceeded the 120,000 new jobs,” notes Edward Luce, former speechwriter to then Treasury Secretary and Obama economic advisor Larry Summers in The Financial Times. “If the same number of people were looking for work today as in 2007, the jobless rate would be 11%.”  In December 2007, the U.S. economy employed 146 million; today, four years later, it employs 140 million. The population has grown; the number of jobs has declined.

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The latest Gallup poll pegs President Obama’s approval at a new low of 41 percent. That adds to the thought that the winner of the GOP presidential-primary sweepstakes is going to be the next president.

And inside that Republican contest, the policy pendulum is swinging toward pro-growth, flat-tax reform. A new agenda. With Herman Cain’s 9-9-9 plan and the announcement of a Steve Forbes-type flat tax from Gov. Rick Perry, the GOP flat-tax-reform competition is dominating the headline news.

While President Obama stumps for huge tax hikes — on incomes of $200,000 to the millionaire and billionaire level — and demoralizes businesses and entrepreneurs with his populist attacks on success and risk-taking, the GOP is fast coming up with a much better idea.

The handwriting is now on the wall. A huge part of the 2012 campaign will be pro-growth tax reform versus “fairness,” redistribution, and soak-the-rich. In a stalled-out economy, I’ll take the supply-side bet anytime. Pro-growth, flat-tax reform is going to win.

The stock market gets this. The flat tax is bullish. In late September, Herman Cain trumpeted his 9-9-9 flat-tax/fair-tax hybrid reform plan at the Orlando, Fla., debate. Since early October, stocks have come out of their funk, rising 12 percent.

Coincidence?

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Obama finally got something right. Can you believe it? In a recent interview, Obama said he is confident we will not enter a double dip recession. Brilliant Sherlock. No, we are not entering a double dip. That is because we never left the first dip. Only Obama could get something so right, because he is so wrong.

While Obama, Fed Chief Bernanke, Treasury Secretary Geithner, and various other Obama economists, lackeys and socialist cabal members drone on about double dip, or not to double dip, common folks on Main Street understand that there has never been a recovery.

The continuing Great Recession started on Bush’s watch in 2007 and has never ended. Like Herbert Hoover, another Republican President who panicked, and failing Capitalism 101, abandoned fiscal conservative principles, George W. Bush turned to big government to “save us.” And as usual, the more government tries to save us, the worse it gets. So Bush channeled Hoover, starting the bailouts, stimulus, and insane levels of spending and government intervention.

Then, just when you thought it could not get any worse, along came Obama with his “Axis of Evil” game plan. What is the “Axis of Evil,” you ask? It is the principles to which Obama’s life is dedicated: Taxation, Regulation, Government Strangulation, Unionization and Litigation.

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Once again, the headline on a financial story reads: unexpectedly. At what point do we conclude the economists relied upon for these projections are worthless, as they never appear to expect what’s going to happen?

US factory orders drop unexpectedly

Lower demand for machinery and defense equipment prompted a fall in US factory orders in February, the Commerce Department said Thursday, dashing hopes for a rebound after start-of-year blizzards.
New orders for big-ticket items — such as planes, computers and cars — fell 0.9 percent during the month, led by a 4.2 percent drop in machinery orders.

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Caveat emptor: The first-quarter economy is slowing and inflation is rising. A month ago, economists were optimistic about the potential for 4 percent growth. Now they are marking down their estimates toward 2.5 percent. Behind this, consumer expectations are falling while inflation fears are going up.

A recent CNBC All American Economic Survey revealed that 37 percent of respondents expect the economy to get worse in the next year. That’s up about 15 percentage points from the December poll. The key reasons? Worries over rising food and fuel costs. Respondents anticipate prices to climb 6.6 percent over the next year. That’s double the 3 percent inflation registered in the December survey.

Supporting the CNBC poll, the early March consumer sentiment index from the University of Michigan dropped sharply, with the reading for consumer expectations falling 14 points. Additionally, one-year inflation expectations have risen to 4.6 percent in March from 3.4 percent in February.

Of course, everyone has been badly shaken by the terrible disaster in Japan. For the U.S. economy, supply-chain disruptions will damage growth. Also, the civil war in Libya and the broad unrest across North Africa and the Middle East has fueled a mild oil-price shock, also subtracting from U.S. growth.

So if the economy ending in the March quarter slows to less than 3 percent, it would mark the fourth-straight sub-3-percent GDP reading. Despite the strength in the manufacturing sector and rising corporate profits, that reading would underscore the softness of this recovery cycle.

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As we are about to enter year 5 of this ‘Great Recession’, I have been trying to remember how things were before 2007 and over the last few years, take an inventory of what I have seen and heard in my daily and professional life. Pearl Buck famously said, “If you want to understand today, you have to search yesterday.”

So, here is what I’ve found:

Surprisingly, it seems that almost everywhere I look jobs are being offered. ‘Help Wanted’ signs are creeping up both in store fronts and on internet websites. If you know where to look and you have the skills needed for this new economy, there is a job for the taking. I don’t know if unemployment checks are keeping potential workers at home, but there are opportunities out there.

Construction has been virtually nonexistent, while remodeling is certainly in vogue. Just about the only place I see construction anymore, is in very close proximity to one of those American Recovery and Reinvestment Act signs. Infrastructure spending has been the lifeblood of this industry but that can’t continue indefinitely.
What about the consumer? When the market tanked in 2007 and a lot of folks began losing their homes, jobs, and investment accounts, something happened to the American consumer: they stopped spending on things they didn’t need and they started to save.

People are now more conscious than ever about saving money. Clients in my CPA office generally say one of two things to me (or both): How can I make my money work harder for me and how can I keep more of my paycheck every month? I’ve heard these questions a lot over the years, and in good times it was followed with, ‘…because I want to buy a boat/vacation home/etc’. Now, people simply want to keep their homes and hopefully put their kids through college.

Is this a welcome development for the consumer-driven America? Not likely, but it probably should be. Last week I talked about how the Fed is hoping to use propaganda to trick Americans into spending more money in hopes that it will stimulate the economy.

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House Republicans are stepping up to the plate and asking Americans on Main Street what we need to do to get the economy back on track.  On Monday, Members of the Economic Recovery Working Group unveiled a 13-miniute video which takes a look at the debt crisis facing our country, titled “Obama’s Endgame: A Look at the National Debt.”

There’s a real disconnect in Washington these days.  I fear, as so many Americans do, that too many representatives in Congress are secluded in Washington, making laws that will fundamentally shift how our economy operates without considering the real-world consequences.  Americans are rightly frustrated watching the national debt skyrocket while ordinary Americans are trying to keep their heads above water.

Over 1.3 million Americans have used YouCut, a project aimed at introducing commonsense savings measures, as a platform to tell Washington to stop the out-of-control spending.  Folks across America are tightening their budgets and finding ways to save in this tough economy.  And they’re rightly disgusted by the gross abuse of taxpayer money on pet projects and inefficient federal programs.  The President and the Democratic leadership are running out of ways to explain why the government can’t keep its fiscal house in order and they’re hard-pressed to find anyone who believes that growing the national debt by $4.9 billion a day is healthy.

The video raises serious concerns over how Washington’s spending spree will hurt the economy.  It’s an in-depth analysis, complete with charts and graphs, showing how specific policies will only continue to perpetuate a culture of irresponsible spending.  One of my favorite segments of the video is when my colleague Mr. Paul Ryan from Wisconsin explains—in simple terms—what happens when the foreign governments who hold our debt start to question whether we’re getting our fiscal house in order; inflation will rise and the middle class will be on the hook.  These are real, serious concerns that our kids will have to face if we don’t curb out spending habits.

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“We have never had, in the history of the world, periods of sustained economic prosperity and growth accompanied by a sustained decline in population. Today, every developed nation in the world is witnessing this decline.”

It’s time for your weekly dose of markets and politics with Coffee and Markets, our podcast from The New Ledger with Francis Cianfrocca, brought to you by BigGovernment.com.

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Sanger: Obama’s Permanent Deficits
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TNL: Marriage and Children in Our New America
Hymowitz: Explosion in Single Young American Men
Spengler: America’s Decline

In December 1908, the President of Haiti, Nord Alexis, attempted one last, desperate, act before leaving office; spiriting his family away to the safety of Jamaica, then New Orleans, to escape the rising tumult in the Haitian capital of  Port-au-Prince.  I give thanks that he was successful, for Nord Alexis was my ancestor.  His foresight, in getting his family out of Haiti and into the U.S., made my life, with the freedom, opportunity, and prosperity that only America can offer, possible.   My story is just one of many strange incidents connecting Haiti and the United States over the past hundred years.  With the devastation wreaked by the recent earthquake, it is clear that a new chapter in Haitian-U.S. relations is about to be written.

Americans should be proud of our quick response to the devastating earthquake that has wiped out virtually all services, businesses, schools, and institutions in Port-au-Prince.   Our President, Barack Obama, has moved government resources and emergency management experts to the area without hesitation, debate or delay.

Within hours, the US Air Force had reestablished air control and the long line of aid and assistance began to flow.   The Army’s 82, All-American Division,  is already on the ground helping to reassert law and order, as well as assist in the difficult job of distribution of relief aid.   Each day more planes arrive in Haiti, with even more assistance.

More impressively, American citizens and private companies have already raised millions in relief with more on the way.   Dozens of organizations such as the American Red Cross, Catholic Relief Services,  and Salvation Army, have already mobilized their resources and are on the ground providing relief efforts in a hundred different ways.

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Today, the State of Georgia welcomes Vice President Joe Biden for an update on the administration’s so-called stimulus bill. With national unemployment sitting today at 10%, and worse in Georgia, the White House’s credibility on stimulus success is dubious at best. Yet as proper manners would dictate, we owe the Vice President an opportunity to make his case.

President Obama tapped Mr. Biden to oversee the stimulus program because, as he put it, “nobody messes with Joe.”  While that may be so, as the Vice President has been traveling around the nation touting the various spending priorities of the stimulus bill, their alleged benefits have yet to materialize into jobs.  So if the Vice President is visiting to have us believe expanding broadband is how jobs are created or that we can “weatherize” our way back to prosperity, it may be Joe who is messing with Georgia.

It’s actually quite telling that the Vice President is visiting us to discuss the stimulus package on the same day that President Obama is setting off for Copenhagen to promote a job-killing National Energy Tax as a means to combat global warming. Because what was evident in the stimulus package, and has been reinforced through subsequent actions, is that this administration places a higher premium on its social goals than on putting people back to work.

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