An administration doing all it can to delay economic recovery indefinitely.
For two years I have been arguing here and elsewhere that Obamanomics will not work. But for Obama and the Democrats to persist in transparent error after the election tsunami and now last Friday’s catastrophic unemployment report has now veered into madness.
Obama’s unreconstructed, throwback Keynesian economics from the 1970s and even the 1930s was a proven failure 30 years ago. Bringing it back as if nothing has happened since the Keynesian intellectual high water mark in the 1960s is public policy malpractice so extreme that it deserves sanctions. But Obamanomics has now gone beyond this silliness to outright assault on critical areas of our economy.
Dude, Where’s My Recovery?
The American economy doesn’t just fall flat on its back and then stay there for years and years. That has happened in countries like India in the past (currently booming), or Bangladesh or Argentina today, or elsewhere in the Third World. But not America.
For over 200 years, the American economy has fallen into periodic recessions and then recovered in a normal business cycle. A great success of Reaganomics was that it stimulated a 25-year economic boom virtually uninterrupted by recession. (People on the Left, like “Progressive” talk radio savant Thom Hartmann, don’t know that, because mentally they have not been living in America during that time).
But on average since World War II, now 65 years ago, recovery from recession has arrived just 10 months after the recession began. The longest previous postwar recession was 16 months.
But as of last Friday, nearly 3 years after this latest recession began, the unemployment rate was still rising, flirting with double digits at 9.8%. African Americans suffered with an unemployment rate at 16%, Hispanics with unemployment at 13.2%. Instead of a recovery after a previous recession record of 16 months, the unemployment rate has now remained stuck at 9.5% or above for a postwar record 16 months. This is why the record of Obamanomics is starting to look more like a depression than a recession.
The Bureau of Labor Statistics (BLS) household survey in Friday’s report actually showed a loss of 173,000 jobs last month, after a loss of 330,000 jobs the previous month, in a self-reinforcing downward spiral.
The number of unemployed rose to 15.1 million last month, with another 9 million “working part time because their hours had been cut back or because they were unable to find a full-time job,” according to the BLS. The number of discouraged workers who were not counted as unemployed because they had given up looking for work was up 421,000 from a year earlier.
As economist John Lott explained at FoxNews.com last Friday, “Economists thought that the unemployment rate would rise as some of the Americans who had completely left the labor force began to look again for jobs.” That would actually be a sign of coming recovery.
But as Lott further explained, that hopeful reason was not the cause of rising unemployment last month. Lott wrote, “Unfortunately, the bad news today is that not only is the number of unemployed rising, the number of people who have given up and left the labor force is also still going up. More than 500,000 Americans have left the labor force since September — a shocking rise in such a short period of time for a so-called ‘recovery.’” Moreover, “2 million Americans have either become unemployed or left the labor force since April.” Those are signs of continuing economic deterioration rather than recovery, again 3 years after the recession began.
Finally, as Lott perceptively reveals, “The untold story that isn’t being covered is how many Americans have stopped actively looking for work. At this writing, the number of unemployed plus those not in the labor force is at 99.83 million, just below 100 million and 10 million above what it was just two years ago. President Obama seems poised to claim the dubious distinction of breaking through that 100 million barrier.”
The Failure of Keynesian Economics
The economy has continued to deteriorate rather than recover because from the beginning the recession was countered with the proven failed nostrums of Keynesian economics. That, again, is the doctrine that what promotes economic recovery and restores growth is increased government spending, deficits and debt. Hence President Obama’s failed, wasted, nearly $1 trillion stimulus spending of February 2009.
The increased government spending and deficits are supposed to increase aggregate demand, which is supposed to stimulate increased production to meet that demand. It doesn’t work in part because if the government has to borrow, or worse tax, $1 trillion out of the economy, spending that additional trillion back into the economy leaves the economy no better off on net. In addition, all that government spending doesn’t do anything to change the fundamental incentives that really drive the economy.
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.
The debacle of this president’s administration is both a cause and a symptom of the decline of American values. Unless Congress impeaches him, that decline will go on unchecked. An eminent jurist surveys the damage and assesses the chances for the recovery of our culture.
It won’t take long for conservatives to scratch this presidential wannabe off their 2008 scorecard.
The American Christmas, like the songs that celebrate it, makes room for everybody under the rainbow. Is that why so many people seem to be hostile to it?
Was the President done in by the economy, or by the politics of the economy?