Why Middle Class Incomes Haven't Increased

As of the end of 2014 and with the latest data available from the Census Bureau and the Bureau of Labor Statistics, the average middle class family's buying power is about where it was in 1996; barely moving up from its 2012 lows.

Click on graph to enlarge

While all too many Democrats think the solution to the wage stagnation problem for the middle class is to give people pay increases by raising the minimum wage, just the opposite is happening.  Giving entry level workers big raises only drains the funds the employer would use to give everyone else a decent raise.  As of January 1, 2015, 29 states and the District of Columbia have minimum wages that are higher than that of the federal minimum wage; and many went even higher as of January of this year.

Simply, the way to grow middle class incomes is to allow the free market system to do its job. The fact that the middle class isn't seeing their incomes rising is symptomatic of just one thing:  Too few new jobs being chased by too many unemployed and underemployed workers.

In order to truly give all Americans a raise, government has to get out of the way.  The Dodd–Frank Wall Street Reform and Consumer Protection Act passed by the Democrats and signed into law in 2010 by Barack Obama, has raised the bar for new businesses and existing ones to borrow money for startup and expansion.  The minimum wage increases that seem to be all the rage right now, have too, raised the cost of any new business start ups. Then the employer mandate of ObamaCare has made it more costly to start or expand an existing business when it has or will have at least 50 full time employees.  Also understand that, in a way, the middle class raises are the cost of having to provide health care.  So, in essence, the money that would have flowed into the economy to stimulate it, is going to the health insurance companies.

When I hear Bernie Sanders and Hillary Clinton talk about raising the national minimum wage to $15, I cringe.  That will only result in the further death of the middle class.  When the two of them talk about going after the wealthy, the banks, and Wall Street, that's a lot of seed-money that will be attacked that otherwise would have been used to start new businesses and grow existing ones.  We can already see what Dodd-Frank has done to the economy.  We have the slowest growing economy since World War II.

The bottom line is that we need a new President who understands how the free market system works.  While that might be someone like Donald Trump, that may be a bitter pill for the country to swallow as far as all other aspects the Presidency are concerned.  I think any of the current Republican candidates would be smart enough to bring a team on board that could restart our economy, and, in the long run, really give America a raise.


References:

Source of the Above Graph: https://research.stlouisfed.org/fred2/series/MEHOINUSA672N

The Dodd–Frank Wall Street Reform and Consumer Protection Act: http://www.investopedia.com/terms/d/dodd-frank-financial-regulatory-reform-bill.asp

ObamaCare Employer Mandate - ObamaCare Facts: http://obamacarefacts.com/obamacare-employer-mandate/

State Minimum Wages | 2016 Minimum Wage by State: http://www.ncsl.org/research/labor-and-employment/state-minimum-wage-chart.aspx

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Hillary and Bernie at War with Big Business

As long as I can remember, Democrats have hated big business. They claim that they have too many tax loopholes; don't pay their workers well; ruin the environment; don't provide good healthcare plans or other benefits; and ship jobs overseas.  Its no wonder then, that during this election cycle, both Hillary Clinton and Bernie Sanders have both tried to outdo each other by bashing big businesses and, in doing so, have promised big regulatory changes to put them in their places.

The problem is that this is simply unfounded, political talk.  Most people don't realize how crucial big business is to the economy and jobs.

First, there's job creation.

Data Source: Bureau of Labor Statistics

As you can see, since 1990, the vast majority of new jobs -- 65% --  were created by big business.  Before you decide this is some right wing propaganda, the above chart was put together by Jared Bernstein; a former economist for the Obama Administration and economic adviser to Joe Biden.

Besides creating a lot of jobs, large businesses pay well.  On average, those firms pay their employees 50% more than those employees working at small companies.  So, obviously, if we want to give America a raise -- as President Obama has said in the past -- our focus should be on helping big businesses grow jobs. 

Then, there's health insurance.

What this collection of charts shows is that -- 3 years before the ObamaCare employer mandate went into effect -- nearly 100% of large businesses offered their employees health insurance; even though the author of these charts considers businesses with 200+ employees a large business rather than the accepted standard of 500+ employees.   But, even so, it shows that large businesses -- besides paying better -- also provide greater benefits; this also includes retirement programs.  While most large companies offer profit sharing, pensions, or matching contribution 401K plans, only 24% of small businesses offer similar retirement plans.  Most workers at smaller firms must either rely on Social Security or their own savings after retirement.  Also, if they do offer a 401k, the value of it is most likely much smaller smaller employers simply cannot afford matching dollar programs like those offered by large organizations.  This is one of the primary reasons why 9% of retirees in this country are in poverty.

Last year, the Bureau of Labor Statistics reported that the typical American family lost $800 in income.  This tells me that we are creating too many small businesses and do not have enough expansion of existing big businesses which typically create more jobs with higher pay and better benefit programs.  We need to encourage the growth of large companies in this country by allowing them to bring back already-taxed overseas profits without having to be taxed a second time at the highest corporate tax rate in the industrialized world.  To that point, we need to lower the corporate tax rate to be competitive with other countries.  The last thing we need is Hillary Clinton and Bernie Sanders promising to further retard large business growth through more regulation.  We've had enough of that from Obama; resulting in overall lower pay for the middle class.  We certainly don't need Hillary's misguided pledge to be the "Small Business President".

References:

On big business, Clinton moves to the left of Sanders:  https://www.washingtonpost.com/opinions/on-big-business-clinton-moves-left-of-sanders/2015/07/30/203e3ba2-3624-11e5-9739-170df8af8eb9_story.html

Jared Bernstein: Getting Straight on Small Business Job Creation: Firms vs. Establishments: http://www.huffingtonpost.com/jared-bernstein/small-business-job-creation_b_1685869.html

President Obama: It's Time to Give America a Raise: https://www.whitehouse.gov/blog/2014/03/05/president-obama-its-time-give-america-raise

Big firms pay 50 percent higher wages than small businesses, study shows: http://www.washingtonpost.com/business/on-small-business/big-firms-pay-50-percent-higher-wages-than-small-businesses-study-shows/2012/11/28/e24a1f58-3970-11e2-a263-f0ebffed2f15_story.html

Employer-Sponsored Health Insurance - 3 Questions All Small Businesses Should Ask: http://www.zanebenefits.com/blog/bid/324135/Employer-Sponsored-Health-Insurance-3-Questions-All-Small-Businesses-Should-Ask

Working for a Small Business? Your 401(k) Is Probably Small, Too: http://time.com/money/2850490/small-business-may-mean-small-401k/

Why you may retire in poverty: http://www.reuters.com/article/2012/08/07/us-column-miller-poverty-idUSBRE8760VW20120807

Typical American Family Earned $53,657 Last Year: http://money.cnn.com/2015/09/16/news/economy/census-poverty-income/

Obama’s 3 Strikes Against Big Business: http://www.cheatsheet.com/business/obamas-3-strikes-against-big-business.html/?a=viewall

Small Business | Issues | Hillary for America - Hillary Clinton: https://www.hillaryclinton.com/issues/small-business/ 

 

The Economy Under Obama In One Graph

Click on Chart to Enlarge

This Federal Reserve of St. Louis graph details the year-over-year growth rate of the economy -- as measured by the percent of increase/decrease in Gross Domestic Product (GDP) -- from 1930 through 2014.  The gray horizontal line represents the peak economic growth under President Obama.  Except for dips during the Great Depression and all the other recessions, no other time in the last 85 years has there been economic growth this low.

Simply, government regulations under Obama are killing the economy.  Even when the Great Depression ended (seen on the far left of the chart), the snap back was tremendous.  Then, following the 1936 recession, the snap back was even greater which is why economist's would always say -- until now -- "the deeper the recession the stronger the recovery". 

The heavy-handed lending regulations under Dodd-Frank are stunting business growth. The employer mandate under ObamaCare is forcing higher costs of labor on business and, as a result, making them less likely to give normal wage increases.  The same with the minimum wage increases that have been taking place in 29 states and in a growing number of cities.   Obama's salaried overtime ruling will also force many companies to forgo normal wage increases.  The push towards solar and wind and the elimination of coal-fired power plants is driving electricity prices higher affecting costs for consumer and businesses alike.

The list of regulations is literally endless since this President has decided to "fundamentally change" America.  With growth this slow and so near the "zero" line, it would be quite easy for us to slip into recession again, should the economy start stumble.

References:

Graph: Gross Domestic Product: https://research.stlouisfed.org/fred2/graph/?id=A191RP1Q027SBEA,

Red Tape Rising: Obama-Era Regulations: http://www.heritage.org/research/reports/2012/03/red-tape-rising-obama-era-regulation-at-the-three-year-mark

Obama's Slams Small Businesses With Excessive Regulations: http://www.usnews.com/opinion/economic-intelligence/2014/03/24/obamas-slams-small-businesses-with-excessive-regulations

December 2014: Obama Crams Over 1200 New Regulations Just Before The New Year: http://dailycaller.com/2014/12/23/obama-admin-crams-over-1200-new-regulations-just-before-the-new-year/

Fireworks Industry Bemoans Tough Obama Regulations: http://www.newsmax.com/Newsfront/fireworks-obama-regulation/2015/07/04/id/653445/
 

Why Millions Of Poor Will Suffer at the Hands of Obama's Coal Regulation

In June of 2014, President Obama, by executive order, directed his Environmental Protection Agency (EPA) to issue regulations that would basically eliminate all of America's more than 600 coal-fired power plants by 2030, with a third of the largest being shuttered "by" 2020 ("by" actually meaning before 2020).  As a result, 39 states, that are affected by the rule, will have just one year, by June of 2016, to come up with their initial plan to eliminate the more than 200 coal plants.

The problems with this Obama edict is that it will disproportionately punish people living in some of the poorest states in the union.

West Virginia, for example, gets 95% of its power from coal, and almost every power plant will have to be shutdown by 2030.  It will cost billions of dollars to build new natural gas plants to replace the existing ones; millions or billions more to create an infrastructure of 20 to 30 inch diameter underground pipes to feed those new plants; and, again, millions more to connect them to the existing electrical grid.  All these costs will have to be picked by by West Virginians in the form of higher electricity prices that may more than double.

All too many in that state won't be able to afford those new rates and the impact on their economy will be substantial.  West Virginia is poor.  The state's per capita income is just under $23,000 a year.  That's 20% less than what the average American makes. Nearly, 18% of the state lives below the poverty line.  That's more than 330,000 of the 1.8 million residents who are already struggling to make ends meet.  Now, they will be facing substantially higher electric bills.

According to the West Virginia government agency that oversees their coal industry, 30,000 direct jobs are involved in mining and those jobs are sure to be eliminated by 2030.  In many cases entire towns are wholly dependent on coal miner's incomes.  Hundreds of stores, restaurants, and other businesses will cease to exist when they lose their jobs. Whole towns will disappear, and, finding new jobs for all these people will be a difficult task.  For most, coal mining is all they know.  In addition, the lack of education will be an impediment to getting a new job because West Virginia ranks number one as the least educated state in the country.  Already, their population has fallen by more than 3,000 from 2013 to 2014 as more and more people seek employment outside the state.  But, these are the residents who can afford to pickup and leave with all their belongings.  Those who remain will probably be the poorest and least educated; meaning that the state will only decline in its tax revenues and business stature.

But, West Virginia isn't alone.  Kentucky gets 90% of its electricity from coal, and they too are poor; making just about $450 more a year than the average West Virginian.  The poverty rate is almost 19% against a population that is more than double that of West Virginia.  This means that more than 800,000 poor Kentuckians won't be able to afford the new electricity rates and higher retail costs that will surely come.  They too are in the bottom 10 when it comes to education, and 18,000 miners in that state will also lose their jobs by 2030.

So, in just two states, more than a million poor will suffer greatly from President Obama's shutdown of coal.  But the list of those with heavy coal dependence is long: Wyoming (85%), Indiana (84%), Missouri (83%), North Dakota (77%), Utah (76%), and so many more.  The Washington Post article referenced below includes an interactive map which shows how much each state is dependent on coal power.  Basically, the President's mandate will hurt more than half of the nation's 45 million poor in a mad rush to eliminate all coal-fired electricity in just 14 years.

Lastly, Obama's plan won't hurt some states like California and New York where there is little dependence on coal.  Of course, those states also have some of the highest electricity rates in the nation at around 14 cents per kilowatt hour.   In comparison, West Virginia is at about 8 cents per kilowatt hour, but, because of the rapid and widespread required replacement of coal, West Virginia's kilowatt rate will most likely wind up being much higher than 14 cents.

References:

The states that will be hit hardest by the EPA’s coal regulations, in one map: http://www.washingtonpost.com/blogs/govbeat/wp/2014/06/02/the-states-that-will-be-hit-hardest-by-the-epas-coal-regulations-in-one-map/

Quick Facts West Virginia: http://quickfacts.census.gov/qfd/states/54000.html

Quick Facts Kentucky: http://quickfacts.census.gov/qfd/states/21000.html

West Virginia Coal Facts: http://www.wvminesafety.org/wvcoalfacts.htm

Kentucky Coal Facts: http://www.kftc.org/campaigns/appalachian-transition/coal-production-and-employment-trends

America's Most and Least Educated States: http://247wallst.com/special-report/2014/09/23/americas-most-and-least-educated-states/

Electricity Prices by State: http://www.eia.gov/electricity/state/

Biden: the Middle Class Is Being "Killed"

Recently, Vice President Joe Biden, said that the middle class is getting "killed" and we need constant and reoccurring infrastructure spending to restore it:

He's right about the middle class getting "killed".  Just look at this chart of real (adjusted for inflation) median household incomes:

As you can see, the so-called Great Recession took its toll.  But, it is also true that 6 years of Obama (and Biden) has not done one thing to improve the median income.  This despite a near trillion dollars in "Stimulus" spending and other programs that were supposed to help the middle class.

So, this brings us to the question as to whether or not Biden's (and Obama's) insistence that infrastructure construction spending will strengthen the middle class.

Well, the answer to that question is no.

In order to raise median household income above the $52,000 level (as seen on the above chart), you need to create a lot of jobs that are well above that number.   Unfortunately, that isn't going to happen with infrastructure projects.  The best paid job on any site is the construction supervisor.  The average construction supervisor salary is about $49,000; or, $3000 below $52,000. The next best paid infrastructure jobs are the heavy equipment operators.  Their average pay is around $41,000.  From that point on, it is down hill until you get to the low-paid individual that controls traffic by flipping around a "stop/slow" sign all day long.  Also, understand that infrastructure construction jobs only make up a small percentage of the workforce.  For, example, there are only about 400,000 equipment operators in this country out a of labor force that is made up of 157 million.  That's less than 2-tenths of a percent of the labor force.

The only reason that Biden and Obama are pushing infrastructure spending is to benefit their union voting block because most heavy construction work in this country is unionized.

The kind of jobs that would strengthen the middle class are managers, lab and medical technicians, research scientists, nurses and nurse practitioners, engineers, programmers, and so many more jobs that have nothing to do with infrastructure.  But, these jobs are being hurt by the heavy hand of government regulation under the Obama Administration.  The best proof of that comes from the massive growth in independent contractors and freelancers.  Right now there are 42 million of them, but that number could be more than half of the salaried workforce of 135 million by 2020.

By hiring independent contractors and freelance workers, companies avoid all kinds of federal and state mandates such as the matching FICA payments, minimum wage, paid family leave, salaried overtime pay, and, especially, not having to pay the fine for not providing healthcare.  Instead, the contractor or freelancer must pay for their own health insurance and prepare for their own retirement.  This is what most Democrats don't seem to understand as they keep boxing companies in with increasingly burdensome regulations.


References:

Construction Equipment Operator Quick Facts: http://www.bls.gov/ooh/construction-and-extraction/construction-equipment-operators.htm

Salary Data: Construction Supervisor: http://www.indeed.com/salary/Construction-Supervisor.html

Browse Average Salary Ranges for Middle Income Level Jobs: http://www1.salary.com/Middle-Income-Salaries-7.html

The Shifting American Workforce: Growing Legions of Freelancers and Independent Contractors: http://www.inquisitr.com/1419404/the-shifting-american-workforce-growing-legions-of-freelancers-and-independent-contractors/

We're all becoming independent contractors: http://www.baltimoresun.com/news/opinion/oped/bal-were-all-becoming-independent-contractors-20150224-story.html

How the Middle Class Has Faired Under Obama

Currently, about 44% of Americans identify themselves as being in the middle class.  So, it's no wonder why annually. President Obama has pitched some kind of give-away to them in order to endear them to, and garner votes for, both him and his Democrat party.

Now, in the 2015 State of the Union Address, Obama repeated his commitment to helping the middle class.  Just as he has promised every year since before taking office.  In 2008, just a month before the election that gave him the presidency for the first time, he penned a "Rescue Plan" in which he promised, if elected, to give the middle class tax breaks and strengthen them with better jobs.  Then, after taking office in January 2009, he decided not to implement the "Rescue Plan" that he had promised just 3 months earlier.  This, despite the fact that he had majority control of both houses of Congress to pass any tax cuts that he wanted.  Instead, he created a Task Force to address the weakening middle class. Of course, and in typical fashion, the findings of the Task Force were pretty much ignored by Obama.  But, the promise of tax cuts did what it was supposed to.  Get him elected.

Clearly, without getting into all the details that are in the "References" below, the middle class has been a constant focus of this President.  And sadly, they may have voted for him on the basis of all his promises and rhetoric, and received nothing in return.  The best example of this is displayed in this graph on median family incomes since Obama took office in 2009:

Note: Office Gov't Data For 2014 Won't Be Available Until mid-2015

Simply, the American middle class is hurting because Obama has prevented the one thing that is more important to that class than all his targeted tax cuts:  Good paying jobs.  As long as American businesses are saddled with one new regulation after another,  good paying middle class jobs continue to be scarce.

References:

2015:  Obama to pitch middle-class economic plan in annual address: http://news.yahoo.com/obamas-address-pitch-tax-proposals-help-middle-class-100326731.html

2014: Despite recovery, fewer Americans identify as middle class: http://www.pewresearch.org/fact-tank/2014/01/27/despite-recovery-fewer-americans-identify-as-middle-class/

2008: Barack Obama: A Rescue Plan for the Middle-Class: http://www.realclearpolitics.com/articles/2008/10/a_rescue_plan_for_the_middlecl.html

2009: Middle Class Task Force: http://www.whitehouse.gov/blog_post/Todaysevent/

2009: Health Care Reform: Taxes May Hit Middle-Class - ABC News: http://abcnews.go.com/Business/health-care-reform-taxes-hit-middle-class/story?id=9090430

2010: Obama's plan to help the middle class: how it might affect you: http://www.csmonitor.com/USA/2010/0125/Obama-s-plan-to-help-the-middle-class-how-it-might-affect-you

2011: Obama: "I'm A Warrior For The Middle Class": http://www.realclearpolitics.com/video/2011/09/22/obama_im_a_class_warrior.html

2012: Obama’s Middle Class ‘Tax Cut’ Would Raise Taxes by $1.3 Trillion Over Eight Years: http://cnsnews.com/news/article/obama-s-middle-class-tax-cut-would-raise-taxes-13-trillion-over-eight-years

2013: Obama Focuses on Economy, Vowing to Help Middle Class: http://www.nytimes.com/2013/07/25/us/politics/obama-to-restate-economic-vision-at-knox-college.html

2014: Obama: Middle-class issues drive my agenda: http://www.marketplace.org/topics/economy/obama-middle-class-issues-drive-my-agenda

STUDY: Obama has worst record on keeping State of the Union promises: http://www.washingtontimes.com/news/2015/jan/20/obama-has-worst-state-union-record-ford-study-show/

Poll: Poll: 72 percent of small businesses say regulations are hurting them: http://thehill.com/regulation/business/279443-poll-72-percent-of-small-businesses-say-regulations-are-hurting-

Former Obama administrator of the White House Office of Information and Regulatory Affairs Cass Sunstein: Yes, Regulation Can Kill Jobs: http://www.bloombergview.com/articles/2014-03-04/yes-regulation-can-kill-jobs

Obama Imposed 75,000 Pages of New Regulations in 2014: http://www.thenewamerican.com/usnews/constitution/item/19803-obama-imposed-75-000-pages-of-new-regulations-in-2014

Obama administration imposed $181 billion in regulations in 2014: http://www.foxnews.com/politics/2015/01/06/obama-administration-passed-181-billion-in-regulations-in-2014-report-finds/

December 2014: Report: 21000 regulations so far under Obama: http://www.washingtonexaminer.com/report-21000-regulations-so-far-under-obama-2375-set-for-2015/article/2558050

Mr. Obama, We Don't Need FCC Regulation of the Internet

Those of us who are old enough to remember, know that it was the FCC regulation of long distance and international calling that led to the creation of a massive unionized and bloated monopoly called AT&T which stifled innovation and forced all of us to pay excessively high rates to make calls.  Billing rates during the business day in the 1970's, started at (if I remember correctly) 45 or 50 cents a minute with a 3-minute minimum charge.  Longer distance domestic calls were close to a dollar.  International calls were billed in dollars per minute.  I believe a call to Canada or Mexico cost something around $2 per minute with another 3-minute minimum. Calls to Europe started at $3/minute.  As long as AT&T had no competition and could ask for rate increases every few months and, get them approved by the FCC, there was no need to streamline their long distance and international calling business to lower the costs.

When AT&T was broken up and other long distance carriers like MCI and Sprint were allowed to freely compete without price regulation, the prices for phone calls dramatically dropped.  Today, you can make unlimited calls on many cellphones at what it would cost in 1970 to make just one 10-minute call.  That's because it would take nearly $6 in today's dollars to buy what $1 did in 1970.

Now, the President wants to regulate the Internet like a phone service.  We don't need to go backwards again in stifling competition through the regulation of an Internet that doesn't need regulation.  Every year,  providers are developing faster and faster upload/download speeds and, there is competition.  Today, in most areas of the country, you can purchase access to high-speed internet through almost every cellphone provider,  cable TV provider, and telephone company.  And, if you can't get that access through any of these outlets there is still low-speed dial-up services available.

Of course, Obama will argue that access isn't available on a universal basis, with many rural communities going without any high speed Internet. And, that's true.  It's true because it would cost 10's of thousands of dollars to provide the kind of wiring needed to serve a single farmhouse that is miles away from the local telephone company's servicing office.  But, that's what he wants and he wants us all to pay for Old McDonald getting high-speed Internet on his remote farm; which means higher costs for the rest of us.  Quite frankly, Old McDonald may not want the Internet or even own a computer or cellphone.

But, remote areas can get high-speed Internet today without Obama's help.  If they have 3G or 4G bars on a cellphone, they can also get mobile broadband access to the internet.   There are at least 4 Satellite Internet providers who will gladly sell service.  Also, there are all kinds of services in development on a private basis that could give remote rural access within months to just a few years.

First, there is Wide Area WiFi.  Currently these networks are being installed by local governments to give their police and firemen access as far as 3 miles away.  But, there is no reason that this service couldn't be implemented on a commercial basis.  Second, there is something called the AIR.U Project to provide Super WIFI Internet access.  Initially, this is a joint effort by Google and Microsoft to get Internet service to the 500 remote colleges and universities that don't have high speed connections.  Eventually, it is intended to serve all those who live in rural areas. Lastly, there is Project Loon by Google.  Loon involves launching stratospheric balloons that would carry the electronics necessary to give everyone on earth access to high speed Internet. 

The fact is that access to rural America (and the world!) is being driven by private enterprise.  We don't need the government to get involved.  Again, this is just another case where Obama wants the government to be involved in every aspect of our lives.


References:

Obama's plan to regulate the Internet would do more harm than good: http://www.washingtonpost.com/opinions/obamas-internet-rules-would-do-more-harm-than-good/2014/11/14/64a795d0-6b82-11e4-a31c-77759fc1eacc_story.html

Long Distance Rates For the Late Seventies and Early Eighties: http://ask.metafilter.com/211826/Long-Distance-Rates-For-the-Late-Seventies-and-Early-Eighties

Inflation Calculator: What a 1970 Dollar is Worth Today: http://www.westegg.com/inflation/

Lessons from the AT&T break up, 30 years later: http://www.techpolicydaily.com/communications/lessons-att-break-30-years-later/

Mobile Broadband: http://en.wikipedia.org/wiki/Mobile_broadband

2015 Best Satellite Internet Service Reviews and Comparisons: http://satellite-internet-review.toptenreviews.com/

Local Governments Deploy Wide-Area Wi-Fi Networks:  http://www.computerworld.com/article/2565061/mobile-wireless/local-governments-deploy-wide-area-wi-fi-networks.html

Google, Microsoft team up to bring Super Wi-Fi to rural USA: http://www.extremetech.com/extreme/131810-google-microsoft-team-up-to-bring-super-wi-fi-to-rural-usa

Loon for All: http://www.google.com/loon/

Court: Obama Loses Flat-Roofed Housing Discrimination Claim

Back in June, I wrote a blog  entitled: 'Obama Is Losing In The Courts Like Never Before'.  In it, I pointed out that, in previous Administrations, the average win rate in the courts was about 70%.  Nearly the opposite has happened under President Obama, with his Administration losing two-thirds of the cases that go to court.

The reason for this is simple.  Obama and his ideologically driven people seem to think they can take existing laws and interpret them in ways that were never intended by Congress.  In other words, create new legislation through reinterpretation; thus, bypassing Congress completely.

Obama's latest loss had to do with his Housing and Urban Development's reinterpretation of the federal Fair Housing Act.  They argued that Allstate Insurance, by refusing to insure flat-roofed houses, was practicing discrimination because they were disproportionately not insuring minorities since a higher percentage of those homes were owned by minorities.

First of all, the intent of the the Fair Housing Act was to prevent intentional and widespread discrimination on the basis of race, gender, or religion when someone was either buying  or trying to finance a home.  But, Allstate's supposed discrimination was not intentional.  It was a business decision based on the fact that flat-roofed homes carry an inherently high insurance risk.  Flat roofs leak more frequently than other types.  As a result, they have higher incidents of water damage, mildew and mold.  Often, the damage is inside walls resulting in the entire wall being replaced.  They may also sag and, as a consequence, have a high rate of collapse after extremely heavy rain and snow fall.  Surprisingly, they also have a higher burglary risk. As a result, they have low market values because most people don't want to deal with all the problems, and the high cost of insuring and/or  maintaining a flat roof.

So, the unreasonableness of this racial bias claim was why a U.S. District Judge had no other choice to side with Allstate against Obama.  This is, as noted before, very typical. For example, the Obama Administration is now trying to expand the scope of the Clean Water Act in order to control wells, ponds and marshes; even on private lands.  But, the intention of the Clean Water Act was to only have federal environmental say over navigable waters.  Waters that provide a channel for commerce and transportation of people and goods.  So, I am quite sure that this, too, will wind up in our courts with another smack down by Obama's out-of-control regulations.

References:

Obama Is Losing In The Courts Like Never Before: http://cuttingthroughthefog.blogspot.com/2014/06/obama-is-losing-in-courts-like-never.html

Court rejects Obama housing bias rule as 'wishful thinking': http://news.yahoo.com/u-court-rejects-obama-housing-bias-rule-wishful-215306404.html

If your house has a flat roof, or even if some of its roof is flat, it can complicate insurance arrangements: http://www.gocompare.com/home-insurance/flat-roof-home-insurance/

Clean Water Act Expansion Draws Ire From GOP As White House Prepares To Regulate Waterways: http://www.huffingtonpost.com/2014/04/04/clean-water-act-expansion_n_5088723.html

The EPA: The Grinch Who Stole Christmas From America and the Coal Industry

Last Wednesday, just days before Christmas, Carol Browner, Obama's radical Climate Czar, announced new EPA restrictions for mercury, arsenic, and other toxic substances being outputted into the atmosphere by coal-fired power plants. Compliance is required before 2014. Hailed as a victory by environmentalists, it is expected that it could mean the demise of nearly 60 existing coal-fired power plants with upwards of 22 million customers being affected; mostly in the already beaten up and declining cities and states in what is known as the Rust Belt. Some communities could see their power bills rise by as much as 30%. Most of the country may see rates go up by 10% as this nation's nearly 600 coal-fired power producing facilities are retrofitted with expensive new or modified smokestack "scrubbers" that will be needed to drastically reduce these types of emissions.

Of course, Obama and his EPA could care less about the impact on energy prices and the fact that thousands may lose their jobs in what is already a slow economy. Instead, they claim that their actions are all about saving lives and preventing illness. The "straw man" that they want us to believe in is that their new coal regulations will prevent illnesses like asthma and the effects of mercury and arsenic poisoning and any resulting deaths. Yes, it is true that the number of asthma cases in the U.S. has risen significantly over the years and The EPA would have you believe that those numbers can be reduced by the new regulations. But, in direct contradiction to this, our dependence on coal-fired power production has been steadily declining for two decades since a modified version of the Clean Air Act went into effect in 1990 to reduce acid rain emissions from any coal burning activities.

At one time, almost all electricity in this country was being produced from coal. Today, coal is only responsible for about 49% of this nation's electrical power. The reason is simple. It is too time consuming and costly to maintain any existing coal-fired power plants and to build new ones. For the existing base, the cost to keep up with ever-changing EPA rules and regulations is just too punitive. For any new power generating facilities, there are too many months needed to get EPA licensing. Then, if a power company does manage to get a "go-ahead" from the EPA, there's usually years of court battles with environmental organizations like the Sierra Club and/or Greenpeace. For most power companies, natural gas has become the clear choice over coal. It's easier to get licensing and it typically avoids lengthy environmental court action. More importantly, natural gas, through efficiencies and new finds, has become more competitively priced to what had been previously unbeatable coal prices.

So, with the power companies, themselves, already policing coal out of business, why this new ruling and why now? Why an unreasonable two year compliance mandate? I'm quite sure that the EPA didn't just, all of a sudden, connect the dots on the health risks of burning coal. And, if there truly is a deadly health risk, why did it take 3 years into the Obama Administration before the EPA decided to act on saving lives?

To me, the purpose, the timing, and the compliance requirements of this EPA ruling have "politics" written all over it. First of all, the new regulations conveniently appeal to Obama's environmental voting base in what is the beginning of an election year. Secondly, the decision comes just a little over 10 months away from the next Presidential election. As a consequence, the negative impact on jobs and energy prices are being held off, presumably, until Obama has been reelected. After all, if the EPA had implemented these new regulations in Obama's first year in office, higher electricity rates and job losses would have already been apparent; jeopardizing Obama's reelection bid. Also, the 2-year, forced compliance to the new emissions standard insures that there won't be enough time for the power industry to retrofit all of it's existing coal plants; forcing them to take many of those plants out of service. This also insures that the power industry won't have the needed time to replace those lost plants with any new and compliant facilities. Two years isn't enough time to get EPA approvals let alone have the needed 3 to 5 years to build a new power plant. Thus, brownouts can be expected. In turn, angry customers and public utility commissions will force the power companies to replace the lost power with expensive wind and solar facilities which you can expect to sail through the EPA approval process and, which, can be built in substantially less time than any brick-and-mortar, natural gas power plant.

Back in 2008, when a, then-Senator, Barack Obama was running for the presidency, he unabashedly said that it was his intent to "bankrupt" the coal industry and, in so doing, necessarily cause electricity prices to "skyrocket." That's why this EPA action is no surprise. The truly sad thing about this is that countless numbers of poorer Americans will suffer by forcing them to make "dire" choices between paying their energy bills or paying for their housing, food, clothing, and health care. All of this so Obama can get reelected by appealing to his own radical environmental political base.