American Elephants

Ten Long Years of Substandard Growth. Thanks, President Obama. by The Elephant's Child


“The United States has gone for a record of 10 straight years without reaching 3 percent growth in real Gross Domestic Product.” President Obama has consistently tried to portray the economy as recovering and growing, but the Bureau of Economic Analysis has released the data and it’s a dismal picture.

The average growth rate for economic recoveries since the 1960s is 3.9 percent. The Obama recovery is ranked at an average GDP growth rate of just 2.1 percent — among the very slowest in history.

When the economy tanks, it is usually because optimism went a little overboard. There’s usually some big precipitating event, but too many small businesses were underfinanced, and too many large businesses hired too enthusiastically, and too many unwise investments were made, and when the trigger went off, everything tanked. People get laid off, businesses contract and refine their goals, tighten up and prepare to do business more efficiently.

The longest previous stretch of years when real GDP didn’t grow by at least 3.0 percent, as calculated by the BEA, was the four-year stretch from 1930 to 1933, during the Great Depression, when President Roosevelt embarked on a program of vast experimentation with the economy and the government. There have been four other periods when real GDP growth didn’t reach 3.0 percent — 1945-1947; 1956-1958; 1980-1982 and 2001-2003. The BEA put out a press release today when it published its revised estimate for GDP growth in the 4th quarter of 2015: September, October, November and December increased at an annual rate of 1.0 percent.

No wonder the people are angry.

Senator Dan Coats (R-IN), chairs the Joint Economic Committee of the U.S. Congress. In the Annual Report of the Council of Economic Advisers sent to Congress this week, the projection that real GDP would only grow by 2.7 percent this year and less in the following two years.

“Whether it is burdensome regulations, a broken tax code or a ballooning national debt, the Obama Administration’s policies are a dead weight on the economy,” said Sen. Coats. “Under this president, we continue to see stubbornly low workforce participation and historically high long-term unemployment rates.

“In order to boost GDP, we need to overhaul our tax code and strip away unnecessary government regulations to give employers the confidence they need grow their businesses and create new jobs. Congress can take action to help grow our economy, but we need a willing partner in the White House,” said Coats.

2 Comments so far
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10 years? And Obama is to blame for that? That is equivalent to bitching about a passenger who is handed the wheel, just as the car goes over the cliff. Don’t get me wrong, there are a number of things that he has done that I flat out disagree with, but come on, get real.

The US economy/world economy is not a speed boat. It is a large frigate. It has a lot of moving parts. It takes time to build a meaningful recovery. To place blame on a single person, even the leader, is disingenuous at best.

What do you propose? What are your ideas? How would you pull the economy up to a level acceptable to you? What effects would your policies have? What data do you have to support it?

Sitting back and describing the water to a drowning man is not exactly help. That’s the problem with this country. No one wants to row the boat, everyone just wants to sit back and bitch about the guy calling the cadence.


Comment by Jeff

Well, yes he is. We have many examples of how economies recover. President Obama has assumed, as Democrats usually do that he can ‘fix’ businesses with more regulation, and the regulations have flowed from almost every agency. For example, it was decided that restaurants should display for customers the calorie count of all the ingredients on their menus. Does this mean new signage for the fast food joints? Or just new menus? What about pizza places? They have a wide assortment of ingredients from anchovies to mushrooms to various cheeses —and each ingredient has to have the calorie count? Does anyone actually care? When you want a pizza, you know it’s probably an indulgence. But there are costs to all of that, Big costs. Add on the costs of ObamaCare, the cost of switching all your workers to part time to avoid the ObamaCare mandate. Business exists to make money. For most businesses the profit margin is small. We have the highest corporate tax in the western world. Why? Because the Democrats are sure that greedy corporations have a far higher profit margin than they do, and they don’t like corporations.

There are many books that explain how economic recoveries take place, from Amity Shales Coolidge to Bob Bartley’s The Seven Fat Years or you can read about how FDR’s policies prolonged the Great Depression by 7 years. Yes, Obama is to blame for that.


Comment by The Elephant's Child

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