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Daily News Briefing: Obama's brutal impact on the middle class

Published by: Clark Barrow

Clark Barrow

By CLARK BARROW - After three-and-a-half years of Obama, the middle class has been decimated.

DAILY BRIEFING - SUMMARY

  • MIDDLE CLASS - New income data from the Census Bureau, tabulated by former Census income specialists at the nonpartisan economic consulting firm Sentier Research, reveal that the three-and-a-half years of the Obama Presidency have done enormous harm to middle-class households.
  • MANUFACTURING - Manufacturing is back in vogue as part of the solution to America's job shortage. After years of decline, factory employment has been edging up for the past two years, and some production has trickled back to the U.S. from Asia.
  • ISAAC - Tropical Storm Isaac is gaining strength over the warm waters of the Gulf of Mexico and is expected to reach Category 2 strength, with winds of 100 mph, when it hits land late Tuesday or early Wednesday.
  • REPUBLICAN NATIONAL CONVENTION - Republican officials at the Republican National Convention in Tampa, Florida released Monday a number of talking points and themes that will be used throughout the convention. A summary of this material and key themes for Tuesday’s scheduled convention events are included in this briefing.
  • WHITE HOUSE - President Obama hits the campaign trail undeterred today for a two-day college tour meant to energize younger voters and steal some of the spotlight from the Republican Convention in Florida.
  • DEPENDENCE - More Americans rely on their families for assistance than the government, so federal officials have undertaken an effort to help people to apply for federal assistance.
  • SYRIA - French President Francois Hollande became the first Western leader to call on Syria’s rebel movement to form a provisional government, putting additional pressure on President Obama to back the diplomatic gambit or authorize U.S. military action to protect civilians.

WHAT WE KNOW

ECONOMIC NEWS

  • MIDDLE CLASS - New income data from the Census Bureau, tabulated by former Census income specialists at the nonpartisan economic consulting firm Sentier Research, reveal that the three-and-a-half years of the Obama Presidency have done enormous harm to middle-class households.
    • January 2009, the month President Obama entered the Oval Office and shortly before he signed his stimulus spending bill, median household income was $54,983. By June 2012, it had tumbled to $50,964, adjusted for inflation. (See the chart nearby.) That's $4,019 in lost real income, a little less than a month's income every year.
    • A key driver of higher wages in the 1980s and 1990s was a surge of capital investment in computers, plant and equipment, which made Americans workers more productive. When Mr. Obama pledges to raise taxes on investment income (capital gains, dividends and small-business profits), he is making it costlier to innovate and modernize. That plays out over time into slower gains in productivity and wages.
    • A 2011 study by economists at the American Enterprise Institute found that because of the capital flight from the U.S. as a result of this high rate, "every additional dollar of tax revenue [from the corporate tax] leads to a $4 decrease in aggregate real wages." American workers would be the biggest beneficiaries of tax reform.
    • During the Obama presidency, every age group has seen a decline in income—except the elderly. Those between the ages of 65 and 75 saw an average 6.5% gain in income, though most are not working and collect Medicare and Social Security.
  • MANUFACTURING - Manufacturing is back in vogue as part of the solution to America's job shortage. After years of decline, factory employment has been edging up for the past two years, and some production has trickled back to the U.S. from Asia.
    • Manufacturing jobs aren't the whole answer to the job shortage, of course. They account for about 9% of all nonfarm jobs, but each factory position created tends to support several more in support services.
    • While politicians have offered ideas, ranging from more federal support for research to creation of a national manufacturing strategy, many manufacturers wish Washington would concentrate on what they see as the fundamentals: lower and simpler taxes, improved roads and other infrastructure, and better education.
    • A recent ranking by the University of Calgary's School of Public Policy found the U.S. had the highest effective corporate tax rate of the 34 countries belonging to the Organization for Economic Cooperation and Development. The typical marginal effective tax rate for U.S. manufacturers in 2012 was 35.6%, the study found. That includes income and several other types of taxes faced by corporations at the federal and state level but excludes property taxes and temporary or narrowly targeted tax breaks.
  • The Dow Jones Industrial Average closed down 33 points, or 0.3%, at 13,124.67.
  • The Nasdaq Composite rose 3.4 points, or 0.1%, to 3,073.19.
  • The S&P 500 slipped 0.7 point to 1,410.44.

COMMODITIES

  • GASOLINE - Analysts said gas prices are likely to rise anywhere from 5 to 15 cents due to Tropical Storm Isaac.
  • Analysts said things could be much worse, noting the devastation that was wreaked on the oil industry by Hurricane Katrina in 2005, a Category 3 storm at landfall.
    • The U.S. Bureau of Safety and Environmental Enforcement, which oversees offshore oil production, said Monday that 78% of the current daily oil production in the Gulf of Mexico has been shut, with 346 platforms and 41 rigs evacuated. In addition, more than 48% of natural gas production in the Gulf has also been halted.The area produces about 23 percent of the country's oil output and 7 percent of its natural gas.
  • The U.S. national average for a gallon of regular gasoline is $3.75.
    • When President Obama was inaugurated, in January 2009, the U.S. national average for a gallon of regular gasoline was $1.85. Average gasoline prices are currently 103 percent higher than they were when Mr. Obama became president.
  • Crude oil for October delivery fell 68 cents, or 0.7%, to settle at $95.47 a barrel on the New York Mercantile Exchange
  • Gold for December delivery gained $2.70, or 0.2%, to $1,675.60 an ounce on the Comex division of the New York Mercantile Exchange.

NEWS TO WATCH

  • ELECTION - As of today, there are 70 days until the November 2012 presidential election.
  • ISAAC - Tropical Storm Isaac is gaining strength over the warm waters of the Gulf of Mexico and is expected to reach Category 1 strength, with winds of 85 mph, when it hits land late Tuesday or early Wednesday.
    • The current forecast track has the storm aimed at New Orleans, but hurricane warnings extended across 280 miles from Morgan City, Louisiana, to the Florida-Alabama state line.
    • New Orleans officials announced Monday that they've decided not to call for mandatory evacuations in the city ahead of Tropical Storm Isaac's landfall, but evacuations have been ordered for many residents in surrounding parishes, particularly those outside protective levees.
    • President Obama on Monday declared an emergency exists in the State of Louisiana and ordered federal aid to supplement state and local response efforts due to the emergency conditions resulting from Tropical Storm Isaac beginning on August 26, 2012, and continuing.
    • The President's action authorizes the Department of Homeland Security, Federal Emergency Management Agency (FEMA), to coordinate all disaster relief efforts which have the purpose of alleviating the hardship and suffering caused by the emergency on the local population, and to provide appropriate assistance for required emergency measures,
  • THREAT - Police arrested one protester on Monday afternoon and Tampa police Chief Jane Castor said that so far officers and protesters alike are getting along
    • Police said protester Dominick De La Rosa, 19, was arrested on misdemeanor charges of wearing a mask — which is prohibited in the event zone — and resisting arrest without violence.
    • Protesters are being kept blocks away and, so far, they've gathered in groups of several dozen to a few hundred. Worries of massive protests that might bring violence and a discord of chanting have been elusive.
  • DELEGATES - Republican Party officials struck a last-minute deal Monday night in an attempt to avert a messy Republican National Convention floor battle with supporters of Rep. Ron Paul (R-Texas).
    • Under the agreement, a bound delegate must vote for the presidential candidate that they are required to vote for under state law or state party rules, leaving the actual selection of delegates up to the states.
    • Previously, a proposal would have given presidential candidates the power to veto delegates sent by the states — a change that had Paul supporters crying foul, seeing it as an establishment attempt to stifle the upstart contingent.
  • REPUBLICAN NATIONAL CONVENTION - Republican officials at the Republican National Convention in Tampa, Florida released Monday a number of talking points and themes that will be used throughout the convention. A summary of this material is included below:
    • Overall Theme: A Better Future
      • Monday: We Can Do Better
      • Tuesday: We Built It
      • Wednesday: We Can Change It
      • Thursday: We Believe in America
    • Republican officials said the Republican Convention gives them an opportunity to present the American people with a clear contrast between the failed policies of President Obama and Governor Romney’s vision for a better future.
    • RNC officials said the American people demand and deserve better, and that they cannot allow President Obama to continue to run away from, or distract the American people from, his failed policies. The President’s failures have resulted in:
      • High unemployment
      • Lower take-home pay
      • The weakest economic recovery since the Great Depression.
    • In contrast to President Obama, RNC officials said they will advance specific polices that Governor Romney and Paul Ryan will implement to grow the U.S. economy, help businesses create more jobs and let American families keep more of what they earn.
    • RNC officials say Governor Romney is uniquely qualified to be president at this critical time in our nation’s history. RNC officials highlight the following characteristics of Gov. Romney:
      • Family, the organizing principle of his life -- devoted and loving husband and father
      • Business career -- Bain and the businesses he saved and jobs he created – a defender of free enterprise
      • Public service – Governor of Massachusetts, rescuer of the Olympics
      • Faith – integral to his life
    • RNC officials said they expect viewers to gain the following from the convention:
      • A renewed enthusiasm among supporters and important constituencies
      • New opportunities to draw support from target communities
      • Upward movement in the polls
    • TUESDAY - For Tuesday, August 28, 2012, RNC officials said the convention will focus on the following themes:
      • Barack Obama’s “you didn’t build it” remarks were an insult to every small business owner and hard-working American.
        • The President’s words prove he doesn’t understand what made our nation great -- not government, but individuals working in a free enterprise system that lets us strive toward our goals without government blocking our path
        • Americans look at one another’s success with pride, not resentment, because we know that as more Americans work hard, take risks, and succeed, more people will prosper, our communities will benefit and individual lives will be improved and uplifted
      • Tuesday night Republicans will hear from Republican governors who know what it takes for America’s true “builders” to create jobs and prosper: lower taxes and spending, reduced debt and less red tape.
        • While these Governors have had some success, the Obama administration’s policies have hindered their work and stifled economic growth in their states.
      • Mitt Romney knows that the ones who really “built it” are the men and women who made America the exceptional nation it is. He will support policies that give them the tools and the freedom they need to create prosperity-- and let them keep more of what they earn.
  • CONGRESS - U.S. Senator Chuck Grassley, Iowa Republican and the ranking GOP member on the Senate Judiciary Committee, wants answers about whether U.S. Attorney General Eric H. Holder Jr. and other senior U.S. Justice Department officials misused FBI aircraft, hindering the agency's investigations and ignoring a White House order to cut travel costs.
    • Like a few senior administration officials with high-profile roles, Mr. Holder is required for security reasons to use government aircraft when he travels. But Mr. Grassley said he has received complaints that Mr. Holder has abused the privilege, using FBI planes for travel when aircraft were needed for FBI missions, and, in at least one instance, reserving an FBI plane and leaving it idling on the tarmac when he upgraded to a larger aircraft without telling the agency.
    • According to Mr. Grassley's account of the allegations, the travel by Mr. Holder and other senior department officials is so frequent that the FBI is considering leasing a private plane to conduct FBI investigative work.
  • CONGRESS - Democrats controlling the Senate pressed Monday for an immediate infusion of money to repair the iconic dome of the U.S. Capitol, which has fallen into disrepair and has at least 1,300 cracks in it.

o Sen. Charles Schumer, New York Democrat, says $61 million to fix the leaky Capitol Dome should be added to an upcoming stopgap spending bill to keep the government running into next year. That measure generally won’t contain money for new initiatives and will instead freeze spending at current levels for almost every government program.

o Schumer’s statement came in a letter to House Speaker John Boehner, Ohio Republican. Boehner and Senate Majority Leader Harry Reid, Nevada Democrat, are negotiating through staff aides on the stopgap funding measure, which is needed to avert a partial shutdown of the government when the current budget year ends on Sept. 30.

· WHITE HOUSE - President Obama hits the campaign trail undeterred today for a two-day college tour meant to energize younger voters and steal some of the spotlight from the Republican Convention in Florida.

o Obama, who relied on unprecedented enthusiasm and turnout among younger voters in 2008, is making an aggressive push to engage college students just as they return to campus for the new academic year. Classes at Iowa State and Colorado State began last week; the University of Virginia begins today.

o Greeting students on 256 campuses across 31 states are Obama organizing teams ready to enlist new volunteers, register first-time voters and spread the word about getting out to vote in 70 days, according to a new campaign website targeting younger voters.

PRESIDENT’S SCHEDULE

· In the morning, President Obama will depart Washington, D.C. and travel to Ames, Iowa.

· In the afternoon, the president will hold a campaign event at Iowa State University in Ames, Iowa.

· Later in the afternoon, the president will depart Ames, Iowa and travel to Fort Collins, Colorado.

· In the evening, the president will hold a campaign event at Colorado State University in Fort Collins, Colorado.

· The president will remain overnight in Colorado.

HAPPENING IN THE U.S. CONGRESS

U.S. SENATE

· The U.S. Senate is not in session today.

U.S. HOUSE OF REPRESENTATIVES

· The U.S. House is not in session today.

TOPICS OF INTEREST

FEDERAL GOVERNMENT

· DEPENDENCE - More Americans rely on their families for assistance than the government, so federal officials have undertaken an effort to help people to apply for federal assistance.

o USA.gov announced on Monday that since that “only 15 percent of you turn to government assistance in tough times, we want to make sure you know about benefits that could help you. USA.gov said the website has created a “help for difficult financial times” page for people to learn more about the programs.

o The government got that statistic from a poll asking Americans what helps them the most during tough times. Here are the results:

§ Savings 44%

§ Family 21%

§ Credit cards/loans 20%

§ Government assistance 15%

FOREIGN POLICY

MIDDLE EAST

· SYRIA - Disorganized diplomatic efforts aimed at curbing the worsening violence in Syria grew more complicated Monday, with France urging world recognition of a shadow Syrian government that the United States considers premature.

o In making his plea, French President Francois Hollande became the first Western leader to call on Syria’s rebel movement to form a provisional government, putting additional pressure on President Obama to back the diplomatic gambit or authorize U.S. military action to protect civilians.

o An estimated 20,000 people have been killed in the Syrian conflict, which grew out of pro­democracy protests that began in March 2011. By some measures, the violence has intensified in recent weeks.

· IRAN - Iran is sending commanders from its elite Iranian Revolutionary Guard Corps and hundreds of foot soldiers to Syria, according to current and former members of the corps.

o The personnel moves come on top of what these people say are Tehran's stepped-up efforts to aid the military of Syrian President Bashar al-Assad with cash and arms. That would indicate that regional capitals are being drawn deeper into Syria's conflict—and undergird a growing perception among Mr. Assad's opponents that the regime's military is increasingly strained.

o On Thursday, Iran's defense minister publicly signaled a shift. If Syria fails to put down the uprising, Iran would send military help based on a mutual defense agreement between the two countries, two Iranian newspapers quoted Defense Minister Ahmad Vahidi as saying. Syria hadn't asked for assistance yet, he added.

ASIA

· AFGHANISTAN - The U.S. military said on Monday it was disciplining U.S. troops over two incidents that provoked outrage in Afghanistan early this year, one involving a video depicting Marines urinating on corpses and another over burned copies of the Koran.

o But the administrative punishments fell short of criminal prosecution and it was unclear whether they would satisfy Afghan demands for justice.

o Afghan President Hamid Karzai branded the Marine's actions in the video as "inhuman," and he initially called for a public trial for the soldiers over the Koran incident.

o The Marine Corps announced three Marines had pleaded guilty to charges over the video, which was widely seen on the Internet in January and showed Marines urinating on the corpses of what the Marine Corps said were dead Taliban fighters.

· NORTH KOREA - A recent Foreign Policy article on North Korean leader Kim Jong Un warns against any wishful thinking that the communist regime’s young new leader intends to liberalize the country.

o The author, Victor Cha, dismisses Kim’s supposed Swiss education, attractive new wife, and love of pizza and NBA stars as “inane details” that distract attention from flooding, food shortages, and other crises that the regime is ignoring.

o Cha said while Kim recently enjoyed himself at a variety show in Pyongyang featuring Mickey and Minnie Mouse (of course, held without licensing the characters from Disney), an estimated 150,000 to 200,000 North Koreans continued to languish in prisons and slave labor camps for so-called offenses against the state.