The president tries to tax, spend, borrow, and regulate our way to prosperity.
By now, the current recession is officially the longest since World War II. The National Bureau of Economic Research dates the recession as starting some time during December, 2007. The longest recession since World War II was 16 months, with the average being 10 months. By today, the current recession has clearly lasted more than 16 months.
Which raises the question, are President Obama’s economic policies promoting recovery, or delaying it? Why is this the longest recession since World War II? That is a period of almost 65 years! Would other economic policies better promote economic growth?
Still No Recovery
Yes, there are signs that the economy is finally struggling out of its torpor. But the point is that the recovery is now officially overdue. It shouldn’t just be showing signs of recovery. A full recovery should now be in full swing, given the historical record of the last 65 years!
Moreover, the signs of recovery are on Wall Street. But Main Street is still plunging deeper and deeper. Unemployment now at 8.5% will probably jump to close to 9% in Friday’s report, the highest in almost 30 years. Unemployment in the urban areas that supported Obama so heavily is now in double digits. In New York City, the black unemployment rate for men is near 50%.
We are still losing over 600,000 jobs a month. In his press conference on April 29, Obama stated that his stimulus package passed in February “has already saved or created over 150,000 jobs.” But this number is completely made up. Since the beginning of the year, employment is down by 2.5 million jobs. Obama’s statement is not evidence that his economic recovery plan is working. It is evidence that the President suffers from mental delusion.
But even Wall Street is not doing that well. People are cheered because the stock market has reversed a decline that seemed to be heading towards zero under the weight of Obama’s new neo-socialism. But even with that rebound, the market is still down 40% from its highs.
The testimony of Federal Reserve Chairman Ben Bernanke yesterday did point to eventual recovery, but even he said,
[T]he available indicators of business investment remain extremely weak. Spending for equipment and software fell at an annual rate of about 30 percent in both the fourth and first quarters, and the level of new orders remains below the level of shipments, suggesting further near-term softness in business equipment spending. Recent business surveys have been a bit more positive, but surveyed firms are still reporting net declines in new orders and restrained capital spending plans. Our recent survey of bank loan officers reported further weakening of demand for commercial and industrial loans. The survey also showed that the net fraction of banks that tightened their business lending policies stayed elevated, although it has come down in the past two surveys. Conditions in the commercial real estate sector are poor. Vacancy rates for existing office, industrial, and retail properties have been rising, prices of these properties have been falling, and, consequently, the number of new projects in the pipeline has been shrinking. Credit conditions in the commercial real estate sector are still severely strained, with no commercial mortgage-backed securities (CMBS) having been issued in almost a year.
Savings and Investment No, Capital Flight Yes
Indeed, Bernanke here inadvertently identifies the fundamental weakness in Obamanomics. There is nothing anywhere in Obama’s economic recovery plan to promote savings and investment. To the contrary, Obama’s economic policies are focused on attacking savings, investment, capital, and property rights. That is deliberate, because Obama ideologically sees savings, investment, capital and property rights as the preserve of the rich, which he opposes, and, indeed, which he actually wants to displace with big government.
Even though American companies suffer the huge international competitive disadvantage of the second highest corporate tax rates in the industrialized world, Obama continues to scorn doing anything about this as taking us “back to the failed ideas of the past.” On Monday, Obama was out promoting still more tax increases on corporate America. He foolishly thinks that imposing taxes on the overseas investments of American companies will force investment back to the USA. But this is just one more whupping stick in Obama’s arsenal that is going to create full scale capital flight from the U.S. before his term is over. Watch as alert, independent thinking executives start to transform American companies with investments overseas into foreign companies with tentative investments in America at least for now.
Obama’s Hopeless Economics
Obama and his intellectual Minnie Mice defending his policies in think tanks, on the Internet, and on TV are expressly arguing that the way to promote economic growth is by massively increasing welfare, federal spending, federal deficits, and the national debt, to record levels, along with higher tax rates and more costly regulatory burdens. Does this sound like a promising strategy for economic growth to you? If so, you can best help your country by strictly devoting yourself to gardening, and avoiding all forms of political participation.
This is what Obama’s ballyhooed stimulus package was all about. But readers of this column already know that borrowing a trillion dollars out of the private economy to put a trillion dollars of government spending back in does nothing to promote the economy on net. In particular, it does nothing to improve the incentives that govern economic growth. That is why this stimulus package will create or save exactly zero jobs.
A man of faith in a godless age is hitting Americans where it hurts.
Mr. and Mrs. American Spectator Reader, let P.J. O’Rourke talk sense to your kids.
In Britain, defending your property can get you life.
It won’t take long for conservatives to scratch this presidential wannabe off their 2008 scorecard.
Was the President done in by the economy, or by the politics of the economy?