What’s economic shrugging you ask? It’s akin to Going Galt.  What’s that you say? Who is John Galt? Well, if you’ve read Atlas Shrugged you already know.

If you haven’t, here goes.

John Galt is the hero in Ayn Rand’s classic novel Atlas Shrugged. Although the book was written over 50 years ago, reading it today (with few changes) one would think they were reading about the excessives of today’s Progressives in Congress (healthcare, financial “reform”, TARP, the stimulus) and our Poseur President, Obama.

The economy is stalled … businesses large and small are not hiring or spending except for the essentials.  Some in the Obama Administration have commented that business is purposely not spending or hiring in order to make Obama look bad.

I would suggest that Obama doesn’t need anyone’s help to look bad.  He and his team do that all by themselves.  Team Obama is incompetent, petty, narrow minded, and focused on a single mission … trying to turn American into a socialist Utopia.

In truth, business isn’t hiring or spending because of uncertainty, because higher taxes are kicking in next year, because Obamacare, because of a new round of burdensome regulations, and because Obama is openly hostile to business!

Team Obama is anti-business and so is this Congress which keeps on passing legislation that is despised by 65% or more of the populace.  Our Republic only works when legislators pass legislation that works in concert with consent of the governed.   Tea Parties across the country grew out frustration that the voices of middle and moderate America were being discounted and disparaged by those whose job it is to govern even evenhandedly and to uphold the Constitution.

Team Obama has called those who disagree with his agenda, cowards, racists, poorly educated, afraid and fearful, while asking us to please spend our money on things not needed while many lack a jobs or place to live!

The fact is, those most responsible for growing the economy are being taxed and demonized for their success.  Barney Frank and Chris Dodd (relentless wealth redistributionists) and slew of others have pushed forth an economic reform bill (talk about an oxymoron) that completely ignores Fannie and Freddie Mac’s impact and assault on the economy.  Their asinine loan programs brought us millions of foreclosures.  Worse still, we have five new governmental agencies being brought on board to manage all the new rules, regulations, and paperwork because small business doesn’t have enough of those!

What we have are businesses and creative people who are finding ways to cut back on their output because Obama’s administration is focused on its own political agenda.   Obama’s “new economic order” punishes effort and rewards envy. Take from those who have and give to those who don’t whether these free lunches are warranted or not.  Whether intentional or not, the country and those that produce are reflexively “Going Galt” … and why shouldn’t they?

All of which brings us back to John Galt …

[...] in Rand’s novel the United States is governed by bureaucrats, “looters” and “moochers,” who penalize and demonize creative people. The country is in decline because creative people are disappearing — they have followed the innovative John Galt to a mountain enclave, “Galt’s Gulch,” where they watch society crumble. Creativity has gone on strike (the working title of the novel was “The Strike”), and the engine of capitalism cannot run without it.

This is from the Wall Street Journal:

In the book, every new act of government futility and stupidity carries with it a benevolent-sounding title. These include the “Anti-Greed Act” to redistribute income (sounds like Charlie Rangel’s promises soak-the-rich tax bill) and the “Equalization of Opportunity Act” to prevent people from starting more than one business (to give other people a chance). My personal favorite, the “Anti Dog-Eat-Dog Act,” aims to restrict cut-throat competition between firms and thus slow the wave of business bankruptcies. Why didn’t Hank Paulson think of that?

These acts and edicts sound farcical, yes, but no more so than the actual events in Washington, circa 2008. We already have been served up the $700 billion “Emergency Economic Stabilization Act” and the “Auto Industry Financing and Restructuring Act.” Now that Barack Obama is in town, he will soon sign into law with great urgency the “American Recovery and Reinvestment Plan.” This latest Hail Mary pass will increase the federal budget (which has already expanded by $1.5 trillion in eight years under George Bush) by an additional $1 trillion — in roughly his first 100 days in office.

I don’t know about you, but if this isn’t the time to economically shrug, when is?

Additional sources visit Why Shrug

We are in trouble…

There are 300 million people in this country160 million are retired.

That leaves 140 million to do the work.

There are 85 million in school.

Which leaves 55 million to do the work.

Of this there are 35 million employed by the federal government.

Leaving 20 million to do the work.

2.8 million are in the armed forces preoccupied with killing Osama

Bin-Laden.

Which leaves 17.2 million to do the work.

Take from that total the 15.8 million people who work for state and city

Governments. And that leaves 1.4 million to do the work.

At any given time there are 188,000 people in hospitals.

Leaving 1,212,000 to do the work.

Now, there are 1,211,998 people in prisons.

That leaves just two people to do the work.

You and me.

And there you are,

Sitting on your ass,

At your computer, reading jokes.

Nice.

Real nice.

In Part 1, I wrote about the 5 things that we can do right now to get the economy moving and small businesses creating jobs I listed bringing credit card rates down to manageable  size as the # 1 key to getting the economy going.  A jobless recovery is nothing less than an oxymoron … like government intelligence!

Number 1 on the list to get the economy roiling is reducing credit card rates across the board for small business and consumers alike. Let me explain why.

Despite the propaganda of Obama Administration, there is no lending taking place for small businesses.  I know, I tried.  The SBA’s ARC program for small business was a colossal failure.  I received a list of  close to a 100 banks that were supposedly participating in the program.

After the 20th phone call to the numerous banks on the list  informing me that they were not participating, I gave up.

What the fools in Washington and the credit card companies refuse to acknowledge is that the institutional gluttony of credit card rates (that are usury by any definition) is leading to the highest default rates in history by consumers and halting growth by small businesses who are forced to rely on credit cards.

Excessive credit rates are nothing less than a tax on small businesses who are unable to obtain loans through the banks.  Unlike the government, consumers and small businesses cannot simply print more money.  We are forced to live within our means and if that means not spending and saving in order to reduce the already ridiculous credit card balances (many high because of slight of hand and tricks of the credit card companies) so be it.

Now follow the bread crumbs.

• Instead of paying 29% rates on credit cards,  small businesses could be using those dollars to purchase inventory, supplies, possibly hiring full or part time people.
• If consumers aren’t spending or spending fewer dollars than in the past, sales and profits of small businesses are reduced.
• If small businesses cannot generate sales sufficient to cover their bills, health costs, payroll, etc. many will have no other choice but to close their doors, thereby putting even more people on the rolls of the unemployed.
• If small businesses, retailers, restaurants, etc. are closing shop that means that commercial real estate will be the causality.  If commercial real estate tanks, you ain’t seen nothing yet in terms of recession and long lines of unemployed.
• If strip malls and other commercial real estate stays empty a glut of inventory on the market will stop new building and even more people will be unemployed!
• If retail space remains empty then  commercial property owners will not be able to service their debt, which will lead to more foreclosures, with will lead to more defaults!

See how this all works?  In other words, what goes around comes around … and it all starts with bringing credit card rates down to manageable size.

In Part 3 – How the Credit Scoring Companies are Putting Small Businesses at a Disadvantage & Hurting the Economy!

For more info on the commercial crisis read here from the Daily Finance:

This industry is suffering two problems: a spike in loan defaults, and a need to refinance loans in a market where there is little appetite for such refinancing. Specifically, the CRE loan default rate for August was up six-fold to 3.14 percent from the previous year. These loans were made based on optimistic assumptions about occupancy rates and rents — which are now a joke as retail stores close their doors and companies fire the people who occupied desks.

And by 2012, $153 billion worth of CMBS loans are coming due and since the property values have declined so much, about two-thirds of those loans will not be refinanced — even though the borrowers are paying the principal and interest on them. More recently, Realpoint found that the owners of 281 CMBS loans worth $6.3 billion weren’t able to refinance when the loans matured in the past three months, even though 173 of them worth $5.1 billion generated sufficient cash to service their debt.

These problems could lead to another financial crisis. After all, many property owners are likely to file for bankruptcy when they can’t refinance. This will force banks to write off the loans and take possession of the real estate. The banks will need to raise capital to offset the write-offs. And they’ll throw those properties on the market so they can get them off their books — which will further depress property prices.