Let me set the scene for you: Rising oil and gas prices, rising equity prices and falling housing prices. Storm signals start winking on the global economic front after a month of a braggadocious presidential tour telling us all that finally the economy has got it right; that it’s on its way to recovery.
Where have I seen this film before? Oh yeah: February, 2011.
Just one month before, in his State of the Union address of January 2011, Obama was bragging about his economic accomplishments.
“We are poised for progress,” he told Congress. “Two years after the worst recession most of us have ever known, the stock market has come roaring back. Corporate profits are up. The economy is growing again.”
At the start of 2011, the president was an insufferable blowhard, anxious to let us know that he saved the economy.
But after successfully destabilizing the Islamic world by intervening in Libya, Obama, along with loose money policies of the Federal Reserve, created successively higher oil prices as more and more regimes felt pressure from the Islamic Spring and Obama stifled production at home. And it wasn’t just oil prices, either, that went up. Food prices, gold and silver and other basic material prices were heading up just at a time when the global economy was showing signs of slowing.
Inflation then- as in the soon-to-be released 2012 sequel- acted as a brake on economies that were struggling to gain traction.
Then Mr. President Obama- who has always looked disinterested in real policy work- took several long vacations, inspired a sovereign debt crisis in the US and started the class warfare rhetoric that he now clings to bitterly as a substitute for religion and guns and real tax reform.
Several sovereign debt crises later, the largest economic union in the world, the Eurozone, is on life support, while China deteriorates economically and Japan is listless.
And how did America do in this after all of Obama’s bragging?
Corporate profits were up, yes, but employment was way down in 2011, while GDP grew at an anorexic 1.7 percent for the year. The S&P 500 returned a measly 1.02 percent for 2011, however much Obama was roaring about the stock market in January. Apparently the president doesn’t get to decide in January what the market will do for the year. Now Obama knows that.
Investors, who make economic decisions, not political speeches, didn’t buy the all-is-well mantra and bought very little equity in the stock market in 2011, despite “record profits.”
This time around, in 2012, as Obama lays on hands and raises the economy from the dead once again, he’s claiming only to have saved the auto industry. He "saved" it on the backs of the taxpayers’ gift of ten and twenty dollars bills that stretches out a billion times.
General Motors made “record profits” too this year, after getting the largest forgivable loan in the history of mankind- seriously- from the federal government. Investors haven’t been buying those “record profits” either, chasing shares down to $26 from an offering of $33 in late 2010. $54 is break even for taxpayers- I guess investors are waiting for higher “record profits” before they are convinced that GM is as valuable as Obama says.
By now, two months into 2012, if the White House isn’t hearing the soundtrack from Groundhog Day, saying “Okay, campers, rise and shine. Don’t forget your booties because it’s cold out there today,” then they are doomed, like Bill Murray’s weatherman, to make this year another repeat of the economic purgatory that’s largely been the hallmark of the Obama administration.
You see Obama has a big problem.
He wants you to believe that the economy is so bad that he needs trillions more to fix it. If that’s true, then all the bragging in the world by him isn’t going to remove the responsibility he has for the mess that he’s created over three years.
But he also wants you to think that things are improving as well. If that’s true, if unemployment is heading downward at 100 basis points a month, as Obama economists would have you believe, then the question becomes: Why does he need trillions more to fix an economy already in recovery?
It’s clear the both-ways president, as usual, wants it both ways. He wants to declaim any responsibility for anything, while taking credit for everything.
He got Bin Laden and he saved GM.
Subtle clues can be seen in places other than the bottom line of a doctored employment report- a report Obama, ironically, would like to claim credit for- that the economy is fragile and at risk of fracturing.
Let’s for a moment ignore the contortions that socialist economists execute in order to make it appear the best-of-times and the worst-of-times alternately for the benefit of Obama.
Millions of people have left the workforce in the last year, driving labor participation rates to a 30 year low and costing the economy literally hundreds of billions of dollars per year. Consumer sentiment is up, but that’s a lagging indicator of the economy. Confidence will be meaningful only on election-day. Even still, consumer confidence is well below what is considered healthy. As the Chicago Tribune points out confidence levels are a little below the same place they “occupied” one year ago.
Getting the picture?
While GDP was robust in fourth quarter, that was a one-off event. The first quarter will be decidedly worse, in part because all the growth was moved to bolster 4th quarter numbers. Already we have seen durable goods orders drop in the last month to three year lows, down a hefty four percent. And quarterly dividend futures point to companies eager to retain cash despite “record profits.” Home sales are not bottoming as of yet, with prices hitting five year lows.
Now add into that potent mix of economic miasma: 1) an Obama energy policy that has resulted in higher, less stable prices; 2) an Obama foreign policy that has resulted in more hostile and less stable global relationships, and; 3) a Federal Reserve policy that’s pushing more and more money into stock and commodity markets with higher prices for “things.” Plus there is serious chatter about a possible US intervention in Syria, even as the administration lets things go to shambles in Afghanistan and Iraq.
Are you starting to get the sense that perhaps you’ve seen this film before?
“Okay, campers, rise and shine. Don’t forget your booties because it’s cold out there today.”
It’s cold out there every day that this administration is in charge. And there can be no redemption for Obama and his administration, because- unlike Bill Murray’s weatherman in Groundhog Day- the one thing for certain about Obama is the fixity of his ideology.
He’ll keep repeating the same mistakes until he’s convinced the rest of us have finally got it right.
Or until he’s sees his own shadow and finally admits that there will be nine more months of winter.
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