The Obama Economy - If Only He Would Claim It

Bob Beauprez
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Posted: Mar 24, 2013 12:01 AM

"When is President Obama going to get some credit – and this is like Rodney Dangerfield – when's he going to get some credit for this amazing economy that's coming back?"

Chris Matthews, MSNBC Hardball, March 8, 2013

Chris Matthews' hearing must be as faulty as his objectivity. The American people are more than willing to give Barack Obama "credit" for the sad condition of our economy. The problem is that Barack It's-Not-My-Fault Obama isn't willing to accept responsibility for his failed policies that have stalled, even worsened, the recovery he promised to lead.

True enough, the March jobs report from the Labor Department indicated that the unemployment rate had declined slightly to 7.7%. That was the cause for Matthews' elation as he opened his Hardball show on MSNBC the day the report was released.

What Matthews failed to note was that the unemployment rate declined in large part because another 130,000 Americans left the workforce in frustration of not being able to find work. The Labor Force Participation Rate (63.5%) declined again, matching the August 2012 rate, which is the lowest percentage of the available population either working or looking for work in 32 years.

While the Civilian Non-Institutional Population, as measured by the Labor Department, has increased by 10.7 million people since Obama took office in 2009, the number of employed Americans increased just 1.3 million. On Obama's watch and during his supposed recovery, the rate of job creation isn't even close to keeping up with the growth in the population.

The Labor Department's U-6 ratio that measures total underemployment (unemployed and marginally attached and part-time workers) remains stubbornly stuck at 14.3%.

However, when the millions of Americans that have given up trying to find work are accounted for, the real unemployment rate is closer to 11%, and the U-6 is nearer 17%.

The record of failure is all the more damning when we recall that it was this President who promised his policies would have by now returned the economy to normalcy with just 5% unemployment. Furthermore, over $5 trillion of new debt has been accumulated as his policies failed and the economy languished.

In a speech at the White House on February 25, VP Biden pronounced that Americans are "no longer worried about the economy being overwhelmed." Biden shouldn't opine about economics or shotguns.

And, just because Matthews has a "thrill go up his leg" at the mere thought of Obama doesn't mean all is well. While the Obamaphiles were busy praising the President for leading America back to economic Milk-and-Honey, a vastly different sentiment was being heard in the heartland.

Gallup's Economic Confidence Index released on March 5 fell to -22, matching the low at the New Year in the midst of the fiscal cliff debacle, and the lowest since September 2012.

Investor's Business Daily headline read, "Economic Optimism in U.S. Plunges to a 15-Month Low" as they released their latest TIPP poll results also on March 5 as follows:

  • Economic Optimism Index plunged 5.1 points in March to 42.2, the lowest since December, 2011.
  • Federal Economic Policies Confidence Gauge fell 11% to 35.5, also a 15 month low.
  • Six-Month Outlook Index cratered 18% to 38.8, the worst since October, 2011.
  • January personal income sank 3.6%, the most in 20 years.

The IBD/TIPP poll also found that 59% believe the U.S. economy is in recession with just 35% saying it is not.

In his weekly wrap up on March 9, Scott Rasmussen reported more of the same pessimism that pours ice-water onto Biden's and Matthews' exuberance. "Despite record stock market gains and a slightly improved jobs picture this week, Americans still express a lot of uncertainty about the economy and the future in general," Rasmussen found. Specifically:

  • Short-term economic confidence is now at a new low. Just 25% think the economy will be stronger a year from now.
  • Just 14% of consumers rated the economy as good or excellent; 46% deemed it poor. Among investors 18% scored it good or excellent: 40% said it was poor. 
  • Despite recent rallies, only 20% think the stock market will be higher a year from now.
  • A majority, 54%, believe it will take more than three years for housing to recover.
  • Only 28% believe the country is headed in the right direction. That's down from 42% on Election Day, and 39% when he was inaugurated just two months ago.
  • Rejecting the Promises of ObamaCare, 54% of voters believe the health care system is likely to get worse over the next couple of years – the highest level of pessimism Rasmussen has recorded to date.
  • Belying Obama's claim to be "fighting for the middle class," just 35% think the U.S. economy is fair to middle income Americans, the lowest ever recorded, and down 8 points since January.

Last month in this space, I wrote of the entrenched pessimism that persists today, which is so contrary to American's historic sense of optimism. I offered the following Six Principles to guide our politicians as they approach the issue of continued funding of government and the debate over various budget proposals.

  1. Don't raise taxes
  2. Reform entitlements
  3. Adopt Strict Spending Limits
  4. Systemic Reform of the Tax Code
  5. Put the Brakes on Regulations
  6. Preserve our National Security

I allowed that this list of principles may not be complete, but they would be a "good place to start if Congress and the President were only serious about trying to restore confidence and belief in the permanence of this great Republic."

Paul Ryan, Chairman of the House Budget Committee, has introduced the Republican House Budget. It comes as no surprise to me that Mr. Ryan's budget adheres in large part to these six principles. He doesn't raise tax rates while dramatically simplifying the tax code, he slows the growth of government, he offers a plan for entitlement reform, funds our national defense at a responsible level, and would repeal the leviathan ObamaCare. Most importantly, Ryan's plan would balance the federal budget within ten years.

While more needs to be done to re-establish Federalism and get our fiscal house in order, Ryan's plan would be a big step in the right direction.

On the other hand, the budget introduced by the Democrat Leadership in the Senate includes at least $1 trillion of new taxes, continues to grow government faster than the economy, has annual deficits of $400 to $600 billion, and adds $5.2 trillion more to the national debt within the decade. And, that's by their own admission!

Even the editors of the very liberal Washington Post were horrified: "In short, this document gives voters no reason to believe that Democrats have a viable plan – or even a responsible public assessment of – the country's long-term fiscal predicament."

Somebody tell Joe Biden – some folks actually are very worried.

Federal law requires the President to submit a ten year budget plan to Congress by the first Monday of February each year. Obama has only made that legal deadline once in his five chances. This year he says he might have a budget to Capitol Hill by April 8. Aside from violating the law, Obama's tardiness may matter little since his budgets of late haven't even garnered a single Democrat vote from Congress.

Further, Obama showed his cards already. In discussions with Congressional Republicans last week, he said "balancing the budget over the next 10 years is not on his priority list" according to a published summary in Roll Call. In other words, expect more of the same from the White House.

It would almost be better if they did nothing, but the Senate Democrats and the President press on, simply because they can. A few of them probably do know better, but they won't challenge the Anointed One in his relentless quest to "transform America."

The dour attitude of the American public is understandable given what emanates from Washington. And, right around the corner is the full implementation of ObamaCare, already with over 20,000 pages of regulations drafted, and the price tag soaring. The Joint Committee on Taxation now estimates the cost of the 21 new taxes in ObamaCare at over $1 trillion, almost twice the $570 billion slight-of-hand number used when the legislation was passed three years ago.

Worried? Yes, and with good reason.