Team Obama is out and about mourning a “double-dip recession,” while Fed head Ben Bernanke is warning of a faltering economy. I have described the current economic environment as the front end of a recession.
But Obama’s populist, class-warfare attack on millionaires and billionaires, his new war on bank profits, his linking arms with the protesters occupying Wall Street, and his big-government stimulus plan will surely not solve this crisis.
The September jobs report underscores the economic alarm. The unemployment rate stayed at 9.1 percent. But the rate of marginally unemployed (U6) jumped from 16.2 percent to 16.5 percent. Nonfarm payrolls rose by 103,000 while private payrolls gained by 137,000, small-enough increases to dodge a recession bullet right now. But nearly half those job gains came from the return of 45,000 striking Verizon workers.
And while the small-business household survey showed an encouraging jump of 398,000, it turns out that an even larger 444,000 are only working part-time. So household employment -- excluding the part timers -- actually fell by 46,000. That’s a discouraging sign. At the same time, worker earnings are rising less than the inflation rate. That’s a consumer drag on the economy.
Were it not for the business investment of highly profitable companies, we’d be in the recession soup right now. But that doesn’t stop President Obama from attacking these corporations, especially the oil and gas firms that if left alone could save the entire economy.
When their first stimulus bill passed in 2009, the White House projected the jobless rate would be close to 6 percent today, not 9.1 percent. But that’s not the main reason for Team Obama’s double-dip economic panic. They’re trying to sell their faux jobs package, with its $200 billion in higher spending and $250 billion in temporary tax cuts.
People are not stupid. They know the spending won’t work. And they also know they cannot spend or invest a temporary tax cut, which goes away in a year.
President Bush tried this rebate idea and it failed. President Obama has already tried it once, and it failed too.
Here’s the real silliness of all this. The Obama plan would permanently raise tax rates in order to pay for a temporary tax cut. In other words, taxes are going up, not down, as far as the eye can see under Obama’s program.