ATLAS SHRUGS: Hostess Shutters Operations; Closes Denver Plant

Published on November 16, 2012 by

The Hostess company today announced that it would stop operations – meaning it will close plants, lay off its 18,500 employees, and sell off its brand.  Among the plants it plans to close is one in Adams County, which could close as early as Tuesday, according to an article in the Fort Collins Coloradoan.

The company cited a recent strike as the reason it would have to cease operations.  Thousands of union members went on strike last week after rejecting in September a contract offer that cut wages and benefits. While Hostess agreed upon a contract with the International Brotherhood of Teamsters, the Bakery, Confectionery, Tobacco Workers, and Grain Millers International Union was still in negotiations with Hostess.

The CEO of Hostess, Gregory Rayburn, told ABC News:

“We deeply regret the necessity of today’s decision, but we do not have the financial resources to weather an extended nationwide strike.  Hostess Brands will move promptly to lay off most of its 18,500-member workforce and focus on selling its assets to the highest bidders.”

The company had asked that striking employees return to work last night, but, apparently, not enough returned to enable the company to return to production. This is just another example of how union bosses with fat paychecks don’t represent the interests of their members.  We’d bet the reduced wages for employees that the unions haggled over now look appealing compared to no wages the employees face.

 

TREADING WATER: Last Jobs Report Shows Economy at Standstill, Women Suffering

Published on November 2, 2012 by

The last jobs report before the election on Tuesday showed that the economy is simply treading water.  While some celebrated the Bureau of Labor Statistics report, the reaction reflects the low standards to which Americans have become accustomed under President Obama’s regime.

Despite the spin the Obama campaign is trying to insert into the media, the real number impacting Americans is the “Persons not in the labor force”, which the Peak has covered extensively.  This statistic shows the number of people who have given up looking for work and simply left the workforce.  Or, in the words of Obama, have given up “hope” – this does not embody the American Dream.

When we compare the numbers from October 2011 and October 2012, its evident that Americans are still suffering under this regime.  In total, our economy has seen a total of 2,023,000 depart the workforce over the past year.  That number is comprised of 412,000 men and, sadly, 1,611,000 women.  Let’s be very clear.  This administration has not been favorable to women’s financial well-being.

A few of the other stats:

  • The unemployment number rose to 7.9%
  • The Bureau of Labor Statistics found that the economy added 171,000 jobs, but that the number of unemployed grew by 170,000, roughly the same amount
  • The number of unemployed remained at 12.3 million

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NOT BETTER OFF: WashPo Chart Shows Colorado Families Declining Income

Published on October 11, 2012 by

Ronald Reagan made famous the question “Are you better off than you were four years ago?”  The Washington Post (we know, we’re shocked too) has delivered yet another piece of evidence suggesting that Americans are not better off than they were four years ago – our incomes have fallen nationally and, specifically, in Colorado.  The chart below outlines swing state income decreases.

From the end of 2008 through the end of 2011,  Coloradans lost $4,333 in yearly income.  The median income  in Colorado is $55,387, as of the end of 2011.  This means that Coloradans lost approximately 8% in income over the last nearly four years.  It could be worse, we could be Nevada.  At the end of 2008, the median income was $58,833, and plummeted to $48,927 by the end of 2011.  (And, that includes the raises Las Vegas mogul Steve Wynn gave his employees.)  That is an incredible 17% loss (or, a nearly $10,000 loss ) in income for Nevadans.

While Colorado’s numbers are poor and Nevada’s numbers are just appalling, the United States as a whole hasn’t fared quite as badly.  At the end of 2008, the median income, nationally, was $54,197.  At the end of 2011, it was just $50,502.  This loss represents a 7% or $3,695 in income.

For Coloradans, that 8% translates to decreased savings.  It’s recommended that one saves at least 10% of income (and maybe more), which means that Coloradans’ personal savings are nearly entirely wiped out.  Good thing social security is solvent for retirement.  Oh….  Right.

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OCTOBER SURPRISE?: Unemployment Rate Tumbles Amid Questions

Published on October 5, 2012 by

After a week of setbacks to his campaign (Biden’s gaffe of the week and the miserable debate performance), President Barack Obama woke up to a 7.8% unemployment rate, a gift to his campaign to be sure.  This rate is the lowest it has been since Obama took office.  But, is this 7.8% unemployment accurate and do average Americans benefit?  The answer is no, not really.

First, is it accurate? Barron‘s also analyzed some of the numbers just below the headline numbers:

Curb your enthusiasm over the surprise 0.3 percentage point drop in September’s unemployment rate, to 7.8%. It was largely because of a surge in the number of part-time workers who would really rather have (or need) full-time jobs.  According to the survey of households, from which the jobless rate is derived, 873,000 people found jobs last month–which is a huge gain. But, according to the Bureau of Labor Statistics, 600,000 of those workers settled for part-time employment for economic reasons, not by choice.

The fact remains that one year ago when we had 9% unemployment, we actually had 2,680,000 more Americans in the labor force.  Essentially, that means that over 2.5 million workers have given up looking for work since last year.  If we break it down by gender, that’s 711,000 men who have exited the workforce and, amazingly, over 1.9 million women who have exited the workforce, according to the Bureau of Labor Statistics.

The Romney campaign issued the following statement regarding the questionable numbers:

“This is not what a real recovery looks like. We created fewer jobs in September  than in August, and fewer jobs in August than in July, and we’ve lost over  600,000 manufacturing jobs since President Obama took office.  If  not for all the people who have simply dropped out of the labor force, the real  unemployment rate would be closer to 11%.”

And, Rommey is right.  The chart below from the Bureau of Labor Statistics shows that the “Labor Participation Rate” is just about the lowest it’s been in 10 years.

Data from the Bureau of Labor Statistics

As a Colorado blog, we must point out that the CO unemployment rate is 8.2% and seven counties in Colorado have real unemployment hitting 20%. Coloradans know nothing of a statistical sleight of hand improvement in unemployment.

Color us skeptical, but if this is what recovery looks like, we would hate to see a “recession”.  This hardly seems cause for celebration.  Low labor participation rates do not an “American Dream” make.

 

HICK STEPS ON MSM RECOVERY FICTION: Colorado Guv Says More Tough Times Ahead

Published on September 20, 2012 by

Give it to Governor Hickenlooper. His awe-shucks, tell-it-like-it-is communication strategy may work well for his own political fortunes, but he often ends up putting his foot in someone else’s mouth.

While the mainstream media was out pushing 2011 census numbers released today proclaiming the economy has “bottomed out,” Hickenlooper took the occasion of increased revenue forecasts for the state of Colorado to sound a note of caution on those optimistic assessments:

“It’s always good to get positive news with the state revenue forecast,” Hickenlooper, a Democrat, said in a statement. “But we know many households are still struggling and different sectors of the economy are still fragile.”

That would seem to be an obvious statement of fact to those who recall that Colorado’s unemployment rate has risen for the last four consecutive months. The government’s coffers may be swelling, but that should be no cause for joy while Coloradans are still more likely to get a pink slip than a raise.

Still, it’s not a helpful argument from the state’s leading Democrat. Right now, Democrats are trying to convince people their stewardship has a positive effect on the economy. Any tiny headline that doesn’t spell economic doom has been heralded by them.

Governor Hickenlooper’s top economist, Henry Sobanet, kicked some more sand on the Democrats’ talking points when he predicted things could be about to get worse:

“We are maintaining a relatively cautious forecast as the economy continues to face several major uncertainties and risks, such as the continuing struggles in Europe and possible impending federal spending cuts and tax increases,” said Henry Sobanet, executive director of OSPB. “These issues may result in more pronounced slowing than currently forecast.”

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QE-WHAT?: President Obama’s Latest Round of Stimulus Hurts the Middle Class

Published on September 18, 2012 by
Bernanke

Photo credit: Shirley Li/Medill

Last week, Ben Bernanke, the Chairman of the Federal Reserve, announced yet another round of stimulus, or quantitative easing, known as QE3.  Quantitative easing is a measure of last resort to stimulate the economy, in which, in this particular case, the Fed has committed to buying $40 billion per month of mortgage-backed securities guaranteed by problem children Freddie and Fannie until the economy improves substantially.  But, at what price?  Critics of the policy, such as Michael Pento, founder of Pento Portfolio Strategies, have called it “the nuclear option for [the administration]” and “a never-ending weapon that is being fired at the middle class.”

According to a statement by the Fed, the purpose of this program is to “stimulate the economy by pushing up the value of assets like stocks and homes or refinance their mortgages and pump the savings back into the economy by spending it.”Most experts believe this round of funding will have little to no impact on housing demand as the low demand stems from a large contingent who can no longer qualify to purchase a home because of credit damaged by the economic downturn, joblessness, a lack of a downpayment, or the permanence to invest in a home.

Further, the idea that consumers would plow savings that result from access to cheaper debt is part of how we got here in the first place.

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FOOL’S ADVOCATE: Senator Evie Hudak Says Bad Economy Helps Democrats

Published on September 13, 2012 by

(Credit: Facebook)

No one has ever accused State Senator Evie Hudak (D-Westminster) of being the brains behind the Senate Democrats’ operation. In an AP article today about Obama’s visit to Golden, she clarifies why that is.

Hudak tells the AP‘s Kristen Wyatt, with a straight face we assume, that the bad economy is actually helping Democrats.

Democrats are seeing the economy play a big role this year, too, though of course they believe it plays in their favor.

“I see it in my own district as I walk through communities. I have a lot more people tell me they can’t find a job, that they’re afraid of losing their house,” said Democratic state Sen. Evie Hudak, locked in a tight race of her own against a Republican challenger.

“People are still struggling, but they also see it getting better,” Hudak continued. “They’re more realistic about Obama, they’re looking not at what he will do but at what he has done. I’m confident Obama will keep Jeffco.”

Hudak’s Baghdad Bob-like pronouncement is no surprise to those familiar with her legislative record. She’s not exactly known for her financial acumen. This past session, even the liberal Denver Post editorial board slammed her signature legislation as “muddled economic thinking.”

We know that Hudak has to toe the party line and push a positive outlook on the dismal economy, but actually claiming it’s improving and people are noticing that? Even BP had better spin.

For the last four straight months unemployment in Colorado has gone up. It hasn’t improved, nor even stagnated. It’s gone up.

And voters see that. In the Colorado Purple Poll in August, 27% of respondents said the economy was getting better, while 44% said it was getting worse, representing a 5 point shift towards more negative views of the economy from the July Colorado Purple Poll.

If Evie Hudak actually believes what she told the AP, then her Republican challenger Lang Sias can probably begin measuring the drapes for his office in the Capitol.

 

LIAR, LIAR: Dem Economic Talking Points Denounced by American Banker

Published on September 12, 2012 by

This morning, a loyal reader sent us a post from banking publication American Banker’s editor-in-chief, Neil Weinberg, who wrote a “myth vs. fact” piece on Elizabeth Warren’s talking points on the economy and banking from the Democratic National Convention. While the Peak typically focuses on Colorado issues, we couldn’t pass up the opportunity to highlight this article because Warren’s misleading statements have been driving the talking points on the left nationwide, and in Colorado.

Warren, the self-described “mother of the Consumer Financial Protection Bureau” told a few whoppers at the DNC. Here are her particularly egregious points, plus Weinberg’s attempt to set the record straight.

A few of our favorites from American Banker:

Warren: “The system is rigged. Look around. Oil companies guzzle down billions in subsidies. Billionaires pay lower tax rates than their secretaries. Wall Street CEOs—the same ones who wrecked our economy and destroyed millions of jobs—still strut around Congress, no shame, demanding favors, and acting like we should thank them.”

Reality check: Demanding favors? Like the labor unions that helped push General Motors and Chrysler over the brink and then got the president to help cut in front of bondholders during a taxpayer-funded bailout? Or the class action lawyers who get rich suing job-creating corporations and then funnel some of the spoils to the Democratic Party?

Warren: “President Obama gets it because he’s spent his life fighting for the middle class. And now he’s fighting to level that playing field.”

Reality check: Obama fighting to level the playing field? With a Fed chairman whose near-zero interest rate policy is hurting retirees and other savers while rewarding the profligate—most notably Uncle Sam? Even Neil Barofsky, the former Tarp Special Inspector General who is quite fond of Liz Warren, has blasted the Obama White House and Treasury Secretary for lying to the American people and disguising a giant-bank bailout as a homeowner rescue.

Warren: “After the financial crisis, President Obama knew that we had to clean up Wall Street.”

Reality Check: Obama’s cleaned up Wall Street? Who’s gone to jail, Ms. Warren? In the wake of the tech bust a decade ago, George W. Bush’s Justice Department went after the deposed bosses at Enron, WorldCom and Tyco and put them in jail. President Obama’s Justice Department has taken a pass on the likes of Jon Corzine of MF Global, Angelo Mozilo of Countrywide Financial and the boatload of cads who ran places like AIG, Bear Stearns and Lehman Brothers. Or, as Neil Barofsky said to me recently, given the “trillions and trillions of dollars of value that have been wiped out … it certainly seems like there should have been a rampant area for potential fraud cases.”

 

COLORADO PURPLE POLL: Paul Ryan Favorability +6, Obama/Biden 49% – Romney/Ryan 46%

Published on August 15, 2012 by

Purple Strategies is out with a new round of swing state polls today and finds Paul Ryan as the only candidate on a presidential ticket with a positive favorability rating in Colorado.

In the poll, Colorado voters gave Ryan a 44% favorable rating to a 38% unfavorable rating, with 17% “not sure.” By comparison, Vice President Joe Biden was at a -8 net negative favorable rating. President Obama and Governor Romney had identical ratings, with 46% favorable to 50% unfavorable. 

For Romney that is a 14-point positive shift since July, when a Purple Poll found Romney at 37% favorable to 55% unfavorable. 

Also shifting is Colorado voters' perceptions of the economy, which they find to be getting worse. In July 30% said the economy was getting better to 42% who said it was getting worse. Now only 27% say the economy is getting better, with 44% say it's getting worse.  

In the head-to-head match up the Obama/Biden ticket is beating the Romney/Ryan ticket 49%-46% with a margin of error of 3.1%. That is a two-point shift to Obama since the last Colorado Purple Poll, that had Obama up one point over Romney in July.  

The poll was conducted August 13-14, with a sample of 1000 “likely voters.” Purple Strategies did not release their partisan sample, making it harder to judge the validity of their “likely voter” model, but Purple Poll is held in high regard, so we are apt to trust it.  

Overall, the poll has positives for both Romney and Obama. Obama sees a two-point pickup on top line numbers, but Romney has seen a massive rebounding of his personal image. Most importantly, with the election likely to hinge on the economy, voters' perceptions of an economy getting worse certainly favors Romney. 

With 83 days to go, it's anyone's race in Colorado. 


 

WELCOME TO COLORADO, OBAMA: Quinnipiac Has Romney Beating You 50-45

Published on August 8, 2012 by

A Colorado Presidential poll out today by Quinnipiac and paid for by New York Times/CBS has Governor Mitt Romney beating President Obama 50%-45% in Colorado.

It's the first major poll to show Romney leading in Colorado by a comfortable margin, and considerably more than the poll's margin of error (2.6%). The lead is also significant because the Quinnipiac poll has a large sample size (1,463 Likely Voters) — more than twice Democrat pollster PPP's sample from their poll released yesterday. 

If you're wondering why the Obama campaign is drudging up months-old manufactured outrage today in form of the Sandra Fluke stunt, then this poll's results should make you wonder no more.

Here are some results that are certainly causing heartburn at Obama HQ in Chicago:

  • 53% Disapprove of Obama's job performance / 44% approve
  • 42% Think the economy is getting worse / 26% think it's improving
  • 51% Think Romney would be better on economy / 41% think Obama would
  • 47% Have favorable opinion of Romney / 42% Unfavorable 

But before our conservative readers get their hopes up too high, there are a few caveats to the poll. 

Most important is that we tend to discount any poll that shows Romney or Obama leading by any sort of significant margin. The race in Colorado is tight and we highly doubt any poll that claims otherwise.

Secondly, it appears to oversample Republicans and older voters slightly.


The poll uses a 32R / 27D / 40 U/Other sample, which seems slightly more favorable for Republicans than Election Day is likely to be. 

The sample also contains a larger amount of voters over 45 than is realistic — though the poll found Romney is leading with voters over 35, meaning a properly weighted sample would probably still find Romney in the lead, though by less. 

Liberals have pushed back on the fact that Hispanic voters comprised only 9% of the sample, but if you look at the Census figures for Hispanic voting, they represent usually about an 8% share of the Colorado electorate each cycle. 

Overall, what this poll tells us is that Obama and his Super PAC's millions of dollars worth of ads are not effectively tarring Romney as the former Massachusetts Governor has a (+5) favorable rating in the state, compared to a (-11) negative ranking for Obama’s job performance. 

But mostly it tells us what we already know — the race is close. It's going to take the full-on effort from every conservative in the state to make Obama a one-term proposition. 

 
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