There is a plethora of material for the July,2010 blogs. A cursory review of the latest Value line and the companies analyzed in that edition illustrates the tremendouse impact of the private sector on our economy. This impact is pervasive not only on employment but diversity and diversification of very strategic industries.

We have a truly fantastic source of strength and growth with our business base. There is no problem with our business capability, the problem lies with the lack of understanding of our capitalistic and free enterprise system by the socialist bias of the Obama Administration: Higher taxes, Punitive regulations, and Government tsars making decisions without any oversight, and a general distrust of the private economy. It is not difficult to understand why private jobs are not being created. Corporations are awash in liquidity but the are not spending. Business executives see higher taxes, tariffs, and more intrusion into the private sector. I have mentioned in past blogs the multiplier effect and how private expenditures have a larger multiplier effect on the economy than goverment spending. A recent statistic from the July 12th to 18th 2010 edition of Business Week confirms the liquidity in our economy. American households are sitting on nearly $8 trillion in cash with returns on cash providing next to nothing. Cash at U.S. non-financial corporations stood at $1.84 trillion in the first quarter of 2010-up 27% from early 2007. As a % of total company assets, cash is at its highest level in half a century. Another take on the multiplier effect is a study by the IMF noted by Stanford University economist John Taylor which debunks a multiplier effect from the Obama economists. The IMF study shows a multiplier of just 0.70, that is for dollar the government spends, the economy produces 70 cents of activity. The Keynsian Notion that $1.00 of government spending produces $1.50 In growth has been discarded as a dead end theory.

Obama continues to believe that govt spending creates growth. A Wall Street Journal article in July 2010 quoted Nancy Pelosi stating that the extension of jobless benefits will cause more to work. President Obama responded to a question in Wisconsin about job creation by saying that he wants to create a new tax break for Americans; the tax break would involve encouraging Americans to weatherize their homes to reduce Green House gas emissions.

The news is over the top with California boycotting Arizona, Gay marriage over the will of the voters, and Mayor Bloomberg of the Big Apple and his City Council approving a mosque to be built next to the former World trade Center. What is happening to the American conscience? Obama has apologized to nearly every world leader and returned gifts from the British. Our military is only tolerated by the government. What happened to Reagan’s ideas of greatness for our nation and love of country? I am totally disgusted.

There is talk of continuing the Bush Tax cuts then here comes Timothy Geither who declared that tax hikes will help the economy dig its way out its hole. Can you believe it??

Charlie Rangel and Maxine Waters are under fire for “irregularities of ethics problems”. Will they get the “boot”?

There is no use even discussing drilling for oil at this time, we can only hope that the coming election will bring us to more intelligent members of both Houses.

More to come later this month.

Gary E. Marsella

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