Economic Agenda based on Realities

After a few weeks of euphoria in which it appeared that the economy was on an up turn we are receiving reports that unemployment has seen a remarkable increase. AFP reports that "US jobless claims in surprise jump for second week." The article goes on to point out that "The Labor Department said that initial jobless claims increased by 15,000 to 576,000 in the week to August 15, which happens to be the survey week for the monthly non-farm payrolls report, seen as one of the best indicators of economic momentum."

While the President and his Administration are making health care the single most important, millions of Americans are trying to figure out how to make the next payment on their home, their car, or their meal. Do they think health care is important? Maybe, but they think a job is imperative.

The largest unemployment rate in recent history. Forget about the 9.5 percent touted by the Obama Administration, economists on both the right and left say it is more, much more. Many

economists are projecting an unemployment as much as double of that when you factor in the untold numbers who have given up on the idea of finding a job.

It appears this Administration believes that the best way to solve our unemployment problem is by excessively taxing those who create jobs.. The majority of jobs comes from people who make $250,000 a year or more, yet this group is being singled out to pay more taxes. It has never been easier to move capital and with US tax rates the second highest among industrialized countries in the world, you can expect a flight of capital and jobs that comes with such.

Obama should distance himself from the fantasy that people are pounding the doors for socialized medicine when there are millions pounding the pavement for health care.

The Obama Administration should reduce barriers between people and jobs. This isn't through temporary government jobs that will run out with the subsidies, but through real jobs that create revenue for them to grow in number and in quality. The federal government should mandate the states to have a minimum wage law in each state of the union and allow them to set them based on the needs of the people and the cities. This would not cost the federal government a penny, but would spur economic activity immediately.

We should restore the competitiveness of US businesses and eliminate any temptation for jobs to be exported by relieving corporations of the burden of being a tax collector. Taxes are a fixed cost for doing business, plain and simple. If taxes are too high, businesses have no choice but move to places where the rate is less so they can lower prices and be competitive. This alone would have a profound impact on the creation of jobs. This policy would also encourage an increase in productivity and soften the blow of inflation.

The word "crisis" is often over used, but seems very appropriate in light of our current situation.

Obama is a modern version Nero, playing his fiddle of health care while the nation is in flames over unemployment.

Kevin Price is Host of the Price of Business, the longest running show on AM 650 (M-F at 11 am) in Houston, Texas and on AOL Radio. His articles often appear in Chicago Sun Times, Reuters, USA Today, and other national media. Steve Moore of the Wall Street Journal calls Price the “best business talk show host in the country.” Find out why and visit his blog at www.BizPlusBlog.com and his show site at www.PriceofBusiness.com. You can also find Price on Strategy Room at FoxNews.com.

Gramm is Largely Correct

Former Senator Phil Gramm, who had an excellent career in the US Senate fighting for the prosperity of Americans, recently spoke his mind about the economy with candor and intelligence. Sen. Gramm is not only a former member of the House and the Senate with over two decades experience, but also has a PhD in economics from the University of Georgia. He may very well be the "Dr. Phil" of economics.

In an interview with the Washington Times, Gramm stated:

You've heard of mental depression; this is a mental recession," he said, noting that growth has held up at about 1 percent despite all the publicity over losing jobs to India, China, illegal immigration, housing and credit problems and record oil prices. "We may have a recession; we haven't had one yet."

"We have sort of become a nation of whiners," he said. "You just hear this constant whining, complaining about a loss of competitiveness, America in decline" despite a major export boom that is the primary reason that growth continues in the economy, he said.

"We've never been more dominant; we've never had more natural advantages than we have today," he said. "We have benefited greatly" from the globalization of the economy in the last 30 years.

He goes on to point out that "Misery sells newspapers. Thank God the economy is not as bad as you read in the newspaper every day."

These themes have been a part of my mantra, with titles such as Economist on the Media and Recession, Bad News Means Big Business for CNBC, and others with similar titles for the last two years, the criticism against Gramm seems to me to be unfair.

But criticized he has been and practically thrown under the bus by Sen. John McCain for whom he has served as an economic advisor. Threatening to send Gramm to Eastern Europe as an ambassador if elected and if they would have him, McCain is using the harshness he has become famous for in his ability to turn on a friend.

It is true, there are people in this country who are suffering at this time. However, most of those are the same people when are economy was incredibly hot a few years ago. Gramm's statements are largely true but probably too honest in an election cycle. The media lives off of bad news and the people are beginning to buy the headlines.

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Kevin Price is Host of the Houston Business Show (M-F at 11 AM on CNN 650) and Publisher of the Houston Business Review. Hear the show live and online at HoustonBusinessShow.com. Visit the archive of past shows here.