Sacramento ‘recovery’ reliant on government growth

Dec. 30, 2012

By Katy Grimes

A front page news story in Sunday’s Sacramento Bee claimed that 2012 “is shaping up as another year of solid but not spectacular economic growth – more groundbreakings, more cars sold, more stores and restaurants opening, and a gradual decline in unemployment.”


Offering nothing more than provincial anecdotal evidence, the Bee, as most mainstream newspapers, have been selling a bogus economic “recovery,” even as America faces a fiscal cliff.

California will get there first.

Most mainstream newspapers have completely ignored the double-dip recession, staggering state and national debt, growing entitlement crisis, as well as the job killing effects of the implementation of Obamacare. The “recovery” has been largely undetectable  for approximately 90 percent of all Americans.

Even financial experts have said that any recovery from the recent Great Recession has been the weakest of any since 1945.

Yet the story in the Sacramento Bee also included a full admission that President Barack Obama’s economy is fully dependent on borrowing, as well as printing more than a trillion dollars every year just to sustain the weakest economic recovery in decades.

“Until the ‘fiscal cliff’ federal budget impasse is resolved, no one is really sure what 2013 will look like,” the Bee said.

“If you counted all the California unemployed, that number is 1.846 million,” CalWatchdog contributor Stephen Frank wrote. “The rate is not 9.8 percent.  According to the Bureau of Labor Statistics, the U-6 number, a broader measure of unemployment, is 19.6 percent — more than double what Obama and Brown want you to believe.”
I’ve been writing all year about the real unemployment numbers. The Bureau of Labor statistics provides these, but most media ignore the data. it apparently doesn’t fit the “recovery” agenda.

Perhaps the only “recovery” in Sacramento, the state Capitol and state government agency headquarters, is in government jobs. “In June, a total of 142,415,000 people were employed in the U.S, according to the BLS, including 19,938,000 who were employed by federal, state and local governments,” Terence Jeffrey of CNS News reported.

“By November, according to data BLS released today, the total number of people employed had climbed to143,262,000, an overall increase of 847,000 in the five months since June,” Jeffrey reported. “In the same five-month period since June, the number of people employed by government increased by 621,000 to 20,559,000. These 621,000 new government jobs created in the last five months equal 73.3 percent of the 847,000 new jobs created overall.”

The phony “recovery” in California is not only over-reported, but the state’s real debt is never mentioned.”California’s real debt is not just the measly $16 billion that Gov. Jerry Brown and state Democrats bandy about; California’s real debt is $617 billion.,” I wrote in October.“California again trumped other states with a $617 billion debt,”  State Budget Solution reported in August. “California’s debt is more than twice the size of New York’s state debt, and New York has the second largest total debt burden in the nation.”But this fact doesn’t support the recovery” agenda either.

University of the Pacific economist Jeff Michael, predicted for the Bee that “Sacramento-area unemployment should fall to 9 percent by 2014, when he believes the job market will move into a higher gear.”

“One of the X factors is tax rate,” the Bee reported. “Proposition 30, passed by voters in November, raises income taxes on wealthy Californians and sales tax on everyone. In addition, Sacramentans passed their ownsales tax increase, bringing the rate in the city to 8.25 percent.”

In a shock to my system, the Bee actually admitted “higher taxes in general aren’t good for business.” But then they killed that admission. “But in a community like Sacramento – where the public sector accounts for more than a quarter of all jobs – the good likely will outweigh the bad. The extra billions from Proposition 30 will help school funding and shore up the state budget.”

“You’re looking at a millionaires’ tax that’s going to pass through Sacramento in the form of state spending,” Michael said. He clearly is a big government guy who doesn’t see anything wrong with money passing through the government as economic stimulus.

I remember Michael at a Dec. 2011 hearing where he and another university economist promoted creating higher oil taxes, adding more progressive taxes, and called for Proposition 13 to be “revisited.” They said that project labor agreements needed to be strengthened and capital gains and inheritance taxes need to be beefed up.

They never once advocated free-market economic principles during the hearing. Instead, the university economists and Michaels criticized high-income earners and intimated that the wealth was ill-gotten.

It is no surprise that Michaels is the go-to economist for the Bee. He is the go-to economist for state Capitol Democrats as well.

All this story proves is that a Sacramento “recovery” is entirely reliant on government. And that’s never good for the private sector.

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