American Elephants

The Obama Economy — Just the Facts. by The Elephant's Child

On the campaign trail, President Obama continuously whines about the failures of the last decade that have made life so difficult for him.  He speaks about everything except his own economic record, and no wonder.

There are 3.3 million fewer U.S. jobs than when the President was inaugurated.  The unemployment rate is 1.9 percentage points higher than it was in January of last year.  The U.S. economy has lost jobs in 12 of the 19 months , including the last two months, for a rate of 9.6 percent, not including those who have stopped looking.

The President requested and signed into law an $862 billion stimulus law.  He signed into law two health care laws that will create $788 billion of new entitlements over the next decade.  Add to this a whole bunch of other spending bills which were not paid for, and the United States government is $2.5 trillion more in debt that it was just 19 months ago when the President took office.  That’s $8,000 more debt for every man, woman and child in the country.

The Obama administration projects that unemployment would average 9.0% over the four years of the President’s term.  Unemployment averaged 5.2 percent during President Bill Clinton’s tenure.  During President George W. Bush’s tenure, unemployment averaged 5.3 percent.  President Jimmy Carter’s unemployment rate averaged  6.5 percent.

The nonpartisan Congressional Budget Office estimates that this administration would have the federal government spend  more than 24 percent of the entire U.S. economy during his term — a government 25 percent larger than during the Clinton era.  Budget deficits would average 8.7 percent of the U.S. economy, compared to Clinton’s average 0.4% surplus.  Treasury Secretary Timothy Geithner says that the President is returning America to “the pro-growth tax and fiscal policies” of the Clinton administration.

Yet the President has asked for another $50 billion in stimulus money, a tacit admission that the previous stimulus bill did not work.  More infrastructure spending, not to do something about all those “shovel-ready” projects that never got done, but this time for an unworkable high-speed rail, which would cost far more than $50 billion.

These facts come from the estimable Keith Hennessey, and at his website you can find more, and the source for each figure.  Mr. Hennessey was the senior White House economic adviser to President George W. Bush, so he knows his way around the White House as well as around economic policy and problems.

Economist Alan Reynolds offers some comments of his own on the economy, unemployment, and what’s going wrong.


Soak the Rich, Bash Business, Cripple Confidence and Create Jobs? by The Elephant's Child
September 10, 2010, 7:15 am
Filed under: Capitalism, Economy, Liberalism, Taxes | Tags: , ,

There is a lot of confusion out there about “the rich.” Politicians want to tax the rich and give to the poor — on the theory that everybody loves Robin Hood. Politicians do so want to be loved.

Americans don’t naturally think of the rich with envy.  Americans have always believed that America is a place where everyone has the opportunity to get rich, or at least richer.  And they have always believed that their children can do better than they did.  One of our national characteristics is a distinct lack of envy.  Listen to the voices of immigrants and the children of immigrants. They find America a magical place full of opportunity for everyone.  Listen to Marco Rubio’s story.

Liberals worry politically about the poor. But they don’t worry much about them when they aren’t campaigning.  Thomas Sowell noted back in 2000:

What do the poor most need?  They need to stop being poor.  And how can that be done on a mass scale, except by an economy that creates more wealth?  Yet the political left has long had a remarkable lack of interest in how wealth is created.  As far as they are concerned, wealth exists “somehow” and the only interesting question is how to re-distribute it.

The re-distributors have an excellent record of making everybody poor, but that was not what they intended.  Even Fidel Castro just admitted that the Cuban social model doesn’t work.  It apparently did make Fidel one of the world’s richest people— at least on Forbes list — as Cuban soap and food money went into Fidel’s own bank account.  This is a frequent side-effect of re-distribution.

Barack Obama said in the Labor Day speech he gave in Milwaukee:

Anyone who thinks we can move this economy forward with a few doing well at the top, hoping it’ll trickle down to working folks running faster and faster just to keep up—they just haven’t studied our history.

Mr. Obama’s economic messages have consistently focused on the idea that the “well off”, the “special interests”, the fat-cats”, the “well-connected” have somehow screwed the middle class.  He demonstrates a complete lack of understanding in how market economies operate. Entrepreneurs are non-existent,  and ideas come from the inventiveness of government bureaucrats.

The president believes that the middle class owes everything it has to the government, rather than to wealth-creating entrepreneurs or businesses or their own efforts.  He does not grasp the difference between a  truly free market where individuals decide where  to invest their resources and energies, and a government-directed economy that sets collective priorities which require individuals to follow specific policy objectives defined by the political class.

This is a president that supposedly has an economics meeting every morning. Yet he suggests that private business should be focused on pursuing non-economic objectives.  You don’t restore business confidence by bashing business.  Does this sound like a clear definition of business in a market economy?

That means making sure corporations live up to their responsibilities to treat consumers fairly and play by the same rules as everyone else.  Their responsibility is to look out for their workers, as well as their shareholders, and create jobs here at home.

Ah, and how are those jobs created?  There is the problem.  Apparently nobody knows.

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