Tuesday, February 17, 2009

When is a junket a junket? Not when it is Congress, that's when

I'm getting fed up with government hypocrisy. Case in point: companies left and right are being criticized for holding "lavish parties" for key salespeople, or retreats, conventions or other corporate outings. I understand why. But I also know that we could be hurting the hospitality and convention industry more and more by canceling all these events.

But if our government officials do it? No, that is a "serious working session." Both parties had trips to nearby resorts, with different sources of money.

Republican lawmakers paid for their travel and lodging [at The Homestead], mostly with campaign funds. Staffers' bills and the rest of the tab was picked up by the Congressional Institute, which is funded by 54 "patrons," including General Electric Co. and the National Association of Home Builders. About 45 lobbyists attended a dinner on opening night.

A few days later, as the stimulus bill inched forward, Democrats held a two-day issues conference at the Kingsmill Resort & Spa in Williamsburg, Va., a property owned by brewer Anheuser Bush-Inbev NV and whose spa is known for its hops and chamomile massage. Taxpayers helped foot the bill, which was paid partly with money appropriated for congressional office expenses.
Once again, beam me up. And take the COLA pay raise with it, too.

Tony LoPinto hit the nail on the head with these comments:
This is amid hypocritical Congressional reprimands of Wells Fargo and other corporations, which have recently planned business meetings and retreats at resort locations, and were forced to cancel them. Business is going to drive the recovery, and meetings and conferences will be essential to collaboratively working our way out of the current economic mess--but these gatherings should be paid for by the individual companies, not special interests, lobbyists or our taxes.

2 comments:

Counting Sheep said...

I really don't know what to add to this other than to say that I am tired of our new commander in chief being such a buzz kill to the ecconomy.

The WSJ had a good article yesterday on the president's downer attitude:
Obama's Rhetoric Is the Real 'Catastrophe'
In 1932, automobile production shriveled by 90%.

By BRADLEY R. SCHILLER
President Barack Obama has turned fearmongering into an art form. He has repeatedly raised the specter of another Great Depression. First, he did so to win votes in the November election. He has done so again recently to sway congressional votes for his stimulus package.

In his remarks, every gloomy statistic on the economy becomes a harbinger of doom. As he tells it, today's economy is the worst since the Great Depression. Without his Recovery and Reinvestment Act, he says, the economy will fall back into that abyss and may never recover.

This fearmongering may be good politics, but it is bad history and bad economics. It is bad history because our current economic woes don't come close to those of the 1930s. At worst, a comparison to the 1981-82 recession might be appropriate. Consider the job losses that Mr. Obama always cites. In the last year, the U.S. economy shed 3.4 million jobs. That's a grim statistic for sure, but represents just 2.2% of the labor force. From November 1981 to October 1982, 2.4 million jobs were lost -- fewer in number than today, but the labor force was smaller. So 1981-82 job losses totaled 2.2% of the labor force, the same as now.

Job losses in the Great Depression were of an entirely different magnitude. In 1930, the economy shed 4.8% of the labor force. In 1931, 6.5%. And then in 1932, another 7.1%. Jobs were being lost at double or triple the rate of 2008-09 or 1981-82.

This was reflected in unemployment rates. The latest survey pegs U.S. unemployment at 7.6%. That's more than three percentage points below the 1982 peak (10.8%) and not even a third of the peak in 1932 (25.2%). You simply can't equate 7.6% unemployment with the Great Depression.

Other economic statistics also dispel any analogy between today's economic woes and the Great Depression. Real gross domestic product (GDP) rose in 2008, despite a bad fourth quarter. The Congressional Budget Office projects a GDP decline of 2% in 2009. That's comparable to 1982, when GDP contracted by 1.9%. It is nothing like 1930, when GDP fell by 9%, or 1931, when GDP contracted by another 8%, or 1932, when it fell yet another 13%.

Auto production last year declined by roughly 25%. That looks good compared to 1932, when production shriveled by 90%. The failure of a couple of dozen banks in 2008 just doesn't compare to over 10,000 bank failures in 1933, or even the 3,000-plus bank (Savings & Loan) failures in 1987-88. Stockholders can take some solace from the fact that the recent stock market debacle doesn't come close to the 90% devaluation of the early 1930s.

Mr. Obama's analogies to the Great Depression are not only historically inaccurate, they're also dangerous. Repeated warnings from the White House about a coming economic apocalypse aren't likely to raise consumer and investor expectations for the future. In fact, they have contributed to the continuing decline in consumer confidence that is restraining a spending pickup. Beyond that, fearmongering can trigger a political stampede to embrace a "recovery" package that delivers a lot less than it promises. A more cool-headed assessment of the economy's woes might produce better policies.

Mr. Schiller, an economics professor at the University of Nevada, Reno, is the author of "The Economy Today" (McGraw-Hill, 2007).

Walters and Ward said...

There lawyers that can be of assistance for California wills and trust.

 
-