Saturday, July 14, 2012

Obama's Worsening Economic Record

With a growing stack of feeble employment reports accumulating on his desk, it’s hardly surprising that Barack Obama wants to talk about Mitt Romney’s Swiss bank account.

Last month, the economy created only 80,000 jobs. For the last quarter, monthly job creation has averaged an incredibly feeble 75,000. And, for about the 40th month in a row, the mainstream news media described the economic performance as “unexpectedly” weak.

One wonders how many consecutive poor economic reports will be required before the mainstream news media learn to expect bad news.

Obama called the June employment report a “step in the right direction.” But for the 30th time in the last 32 months, he has advised Americans, “not to read too much into any one monthly report.”

Ex-President Bill Clinton’s Labor Secretary Robert Reich does not agree that 80,000 jobs is a step in the right direction. He reminds anyone paying attention that the economy needs to create at least 125,000 jobs per month before it can break even with the natural growth of the labor force.

Obama’s characterization of last month’s employment is particularly ironic considering that in May of 2004, US Senate candidate Barack Obama dismissed the creation of 310,000 jobs when he delivered the Democrats’ weekly radio address. Obamanomics has yet to approach that value.

And even those 80,000 jobs may be illusory. According to the New York Times, temporary employment services are one of the economy’s few growth sectors.

And the abrupt decline in manufacturing last month suggests that the economy has begun shedding jobs rather than generating them. Last month’s manufacturing index fell to 49.7 from 53.5. Any value below 50 indicates contraction.

A more obscure economic indicator is the “ordering index.” New factory orders fell by 12.3% last month. The last time orders fell that far, that fast, was in October of 2011. And that was the result of the 9/11 terrorist attacks. 

There is really no way to describe the state of the economy as anything but awful. And there’s one man, one political party and one ideology to blame.

Immediately after the 2008 election, the Democrats invested their political capital into Obamacare and green jobs. Both have been economic catastrophes.

Obamacare was supposed to lower health care costs and make the US more competitive in the world marketplace. That hasn’t happened. In fact, health care costs have risen so much that the Congressional Budget Office predicts that as many as 20 million Americans could lose their employer provided health insurance.

And contrary to the Democrats’ claims that Obamacare would lower the federal deficit, the most recent numbers from the CBO predict that Obamacare will cost $2.6 trillion over the next 10 years, or nearly triple what Obama predicted.

And how have those green jobs worked out? Obama claims that he has created over 3 million green jobs, but this is nonsense. Most of these were pre-existing jobs that his administration simply reclassified. The guy who pumps gas into a bus is now a “green collar” worker. So is the janitor who sweeps the floor at the bus stop. Even the lobbyist who defends oil companies against EPA regulations now has a green job.

The green economy that Obama promised has been a failure. Solyndra is only the most dramatic example. Even as I researched this article, two more Obama subsidized green companies failed (here and here). The best green news I could find this week regarded a battery company that might have enough taxpayer money to sustain its current burn rate until after the election, possibly sparing Obama another embarrassment.

The sad fact is that the number of people drawing disability insurance payments has grown faster than the employment numbers. While 80,000 got jobs last week, 85,000 went on disability. Since June of 2009, the economy has added 2.6 million jobs while 3.1 million Americans have signed up for Social Security disability insurance.

Democrats have been captive to the mythology of Franklin Roosevelt. Popular history blames the tight fisted policies of Herbert Hoover for starting the Great Depression and credits the free spending of Franklin Roosevelt for ending it. Neither is true. Federal spending under Herbert Hoover rose 50% in four years and Franklin Roosevelt’s policies prolonged the Depression.

Nevertheless, this is the economic model that Democrats bitterly cling to.

What has happened during these last four years that you want more of?


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