Despite a mounting array of evidence to the contrary, President Obama continues to claim victory after victory with our economy.
Now, it is true this president has fundamentally changed the economy. What’s worse is that he has changed the way we look at it. In this administration’s eyes, declines considered as significant 10 years ago are irrelevant today.
Let’s analyze some of the president’s spurious victory claims.
May brought the creation of 38,000 net new private sector jobs—far less than the 160,000 economists anticipated. The more significant number is 550,000. That is the number added to the part-time workforce—people who would love to work more hours but can’t find a full-time job. Thus, we have the largest part-time workforce in the nation’s history.
The Bureau of Labor Statistics (BLS) continues surveying households to get a handle on job numbers. That method may have worked in the early (and slower-paced) 1980s, but we live now in a world of real-time data. The Internal Revenue Service is still part of the federal government. So how difficult would it be for the Labor Department to call the IRS at the end of the month to ask: “Oh, by the way, how many new jobs have been added?” They could get a real-time number and forget the surveys skewed with liberal biases and gushing admiration for the Obama administration.
A Bleak Picture
Now at a historic high, the part-time workforce is only part of the bleak picture. Close to 95 million people are completely out of the workforce, or nearly one-third of the U.S. population. That number increased by 664,000 in May. Yet Federal Reserve Chair Janet Yellen recently proclaimed that we are close to full employment. Only in the “new normal” of Obama-nomics.
As people continue to exit the workforce, some forecast that unemployment rates could sink to around 3 percent. Meanwhile, here is a picture of reality:
· An eroding middle class
· People with little discretionary income
· A labor participation rate at 1977 levels
· 2.1 percent GDP growth for the last seven years
· Wages have not risen in the last 10 years.
· In the first quarter of 2016, companies in the S&P Index declined 7.1 percent, marking the first time for four consecutive quarters of decreases since 2008-09.
· The retail sector mired in an Ice Age
· Health care costs for the average American continue to increase as wages fall.
· More people are filing for disability benefits, and the likelihood of an administrative law judge approving them is more than 50 percent.
· Food stamps and other government assistance are at an all-time high.
· The poverty rate of American has continued to climb every quarter since 2008.
· And, oh yeah—we are in a “recovery.”
I could go on but you get the point. Compared to today, 2007 looks like the greatest economy we’ve ever had.
In West Virginia alone, more than half of working age residents are jobless. Of course, this is bringing great joy to the Obama administration, which set out to ruin the coal industry (once the backbone of the state’s economy), and it has accomplished that goal.
We continue to see developed nations struggling to keep their heads above water. Congress may bail out Puerto Rico, which will lead to similar pleas from California and Illinois, with other states lining up behind them. We continue to decimate our middle class and create an emerging market-like society as civil unrest increases.
Most of all, I am appalled by our economically-inept leaders in Washington. They continue to assume that it is impossible for a rich America to fall apart at the seams. This arrogance seems to increase even as they watch the nation’s prosperity erode before their eyes, exacerbated by the realities of the real economy in Middle America.
The Federal Reserve continues to boast that “this year we are going to have a 2 percent GDP growth.” As if 2 percent is all we need to sustain any kind of growing middle class or offer hope for prosperity to future generations.
Recently I heard that the bright spot in the economy is that “wage growth” is beginning to rise. Really? We have not had real wage growth in more than 15 years. Looking at the past decade alone, annual part-time wages were $22,556 in 2006. Today, they are $25,309. Factoring in a conservative 1.5 percent rate for inflation means we should be at $26,117.
The same is true for salaries—only a little worse. Salaries in 2006 were $60,141. Today: $61,629. That is about a 0.25 percent increase; staying with a 1.5 percent inflation rate would hike the average to $69,796. (These numbers are available on the BLS website.)
I am not knocking any increase in wages. But a “bright spot” in a consumer-driven economy—really? The wage growth can’t even keep pace with the cost of health care. And we wonder why people aren’t spending more money?
Need for New Leadership
This administration’s fundamental change of Washington began with the 2008 election cycle and continues. It features the demonizing of wealth, despising profits of corporate America, a hatred of Wall Street—and job-creating entrepreneurs—and criticism of “fat cat” bankers.
All the while, Washington is so busy worshiping at the feet of political correctness they have made insignificant issues national priorities. In the meantime, they have disregarded positive steps that could create a more prosperous economy:
· Developing sound fiscal policy
· Offering incentives to small businesses
· Encouraging entrepreneurship and innovation
· Expanding a middle class
· Helping to lift people out of poverty
· Making sure real wages are growing
How about incentivizing corporate America to grow and to build with tax rates that are reasonable and not moving targets? Or easing regulatory burdens that seem to steadily increase?
Washington doesn’t seem to have the ability—or even the desire—to create this kind of environment. Their hope appears to rely instead on destroying more of what little middle class is left with the push to drive the minimum wage higher.
Thus, entry-level jobs that need to represent the first step on a career path for the rest of a person’s life, instead of a career, are likely to shrink. How is that supposed to help the poor?
This is why I say that the president’s pathetic display of victory laps over the economy continues to grow more shameful by the day. In an environment where politicians have fallen in love with the idea of no accountability, there seems to be little hope of a real turnaround without a change in leadership on Pennsylvania Avenue.
We don’t need to create something new, but return to what helped America grow in the first place.