Obama offers phony OT increase, Greece, Puerto Rico simmer

Obama offers phony OT increase, Greece, Puerto Rico simmer

The President’s latest plan to save the middle class will help precisely no one and make things worse. Back to reality: Puerto Rican and Greek debt looms large.

Branco cartoon.
Branco cartoon reprinted by permission. (See link* below)

WASHINGTON, July 1, 2015 – Just in time to provide some much-needed comic relief, President Obama has just proposed yet another economy- and job-stifling rule, this time opining that the income threshold for the government’s current “overtime rule” should be increased, allegedly to “save” the middle class.

How will our Middle Class Messiah accomplish this miracle? According to USA Today,

“Currently, certain salaried workers who make more than $23,660 cannot claim overtime; the proposed rule would raise that threshold to $50,440 per year for those workers now exempt from overtime benefits.”

Obama’s proposed new rule would cover a whopping 5 million middle class worker bees, a prospect that gets Labor Secretary Tom Perez all a-tingle. USA Today has him gushing about the potential rule change, claiming it “goes to the heart of what it means to be middle class in America.”

Wow! What’s not to like? Sounds great. Just like most things Washington, D.C. politicians say, until you do the math.

Generally liberal blogger Mickey Kaus throws a bit of cold water on the Administration’s lousy touts:

Obama’s increase (in the upper salary threshold covered by the overtime rule) may boost the pay of ‘nearly’ 5 million workers. There are about 122 million workers in the U.S. economy —  so according to my calculator the change will affect 4% of them. If that’s the biggest action Obama can take to help the middle class, it shows the severe limitations of his vaunted “pen and phone” strategy, no? …”

Furthermore, like the Obamacare-encouraged 30-hour “fulltime” work week, such a change in OT policy will cause a loss of middle class jobs, further destroying any possibility of middle class survival in this permanently-hobbled economy. The legendarily endangered snail-darter has more government backing for its survival as a species today than the American middle class worker does, which tells you something quite significant about the left’s real priorities.

Note to the least divisive American President in modern history: At this point, the best thing you can do for what’s left of the American middle class is to leave them the heck alone. You’ve given enough to them already, dude, and you’ve given it to them good and hard. Time to move on and damage something else.

Meanwhile, the Greek nonsense continues apace this week, with rumors and speeches flying back and forth all over Europe, with Alexis Tsipras deciding to hold his July 5 referendum before he decided against it before he decided to do it anyway. Has this guy been surreptitiously attending the John Kerry advanced seminar in creative flip-flopping?

It seems nobody in the Eurozone except the German voter really wants to lose a member-state that’s currently involved in that continent’s single currency. London and Irish bookies are taking bets on a Grexit, with upwards of 70 percent of bettors putting their euros down on the “no, they won’t” side. On the other hand, at least one Greek poll has voters there giving the latest European bailout proposal a thumbs-down by over 50 percent. In other words, nobody knows.

But as of this writing, everyone is still in limbo—including the overly optimistic U.S. stock market—as nobody really knows which way this farce will tumble next, including the players themselves. It’s emblematic of world “leadership” these days, but we digress.

Meanwhile, the ongoing Puerto Rico debt dilemma—the U.S. version of the Grexit drama, but with a much-higher dollar amount involved—continues to simmer, as that U.S. Commonwealth, like its Greek counterpart, is essentially insolvent. Again like Greece, Puerto Rico’s troubles are largely due to socialist generosity which destroys businesses to channel more and more tax dollars to enrich the Commonwealth’s bloated government bureaucratic class of leeches.

Socialists never bother with the math, things get out of control, taxpayers wealthy and just getting by start evading taxes to right their own sinking economic ships, and the whole system starts to sink. Unless it gets “bailed out” by a higher authority, which essentially frees the entity to go back to its old evil ways, solving precisely nothing.

In the case of Puerto Rico, however, there’s that small matter of the bazillions of high-yielding, totally untaxable bonds the Commonwealth has issued over many years which—whether they know it or not—are directly or indirectly held by investors in muni-bond funds, all of whom are getting dangerously close to a whopping haircut.

Stocks are up again today, based on optimistic rumors coming out of the Eurozone. But professional investors are continuing to sell, knowing full well that if something isn’t done—and soon—to at least stabilize the Greek and Puerto Rican twin contagions, it’s going to be a miserable summer for anyone with substantial assets in stocks and/or bonds.

We probably shouldn’t worry, though. President Obama will surely be able to help at least 5 percent of those who lose their shirts in the market, thereby “saving the middle class” once again. You get so angry about all this stuff, that in the end, you really have to laugh.

No Trading Tips today. Too dangerous, and every answer is likely to be wrong until someone, somewhere in a position of responsibility actually has the guts to do something definitive about the international debt situation before it’s too late.

*Branco Cartoon above originally appeared at Comically Incorrect. It appears here by arrangement and permission.

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Terry Ponick
Biographical Note: Dateline Award-winning music and theater critic for The Connection Newspapers and the Reston-Fairfax Times, Terry was the music critic for the Washington Times print edition (1994-2010) and online Communities (2010-2014). Since 2014, he has been the Business and Entertainment Editor for Communities Digital News (CDN). A former stockbroker and a writer and editor with many interests, he served as editor under contract from the White House Office of Science and Technology Policy (OSTP) and continues to write on science and business topics. He is a graduate of Georgetown University (BA, MA) and the University of South Carolina where he was awarded a Ph.D. in English and American Literature and co-founded one of the earliest Writing Labs in the country. Twitter: @terryp17