By his reasoning, Obama needs to destroy the middle class in order to save it.
It’s not surprising that President Obama’s re-election strategy is to “cast himself as a middle class warrior.” What is surprising is that he thinks he can get away with it. The fact that he actually might says less about Obama than about Americans’ understanding of economics and the Republicans’ particular skill at turning smart policy into stupid politics.
The obvious question when a politician wants to run as a champion of any particular group is “what has he done for that group?” So, let’s think about what Obama has done for, or — more precisely — to, the middle class.
Unemployment, the single most important economic statistic for the middle class, spiked to over 10 percent before recently “improving” to 8.6 percent (with December data due out Friday, January 6). The last time unemployment was this high was in 1983, coming out of the Jimmy Carter recession. Under Reagan, the unemployment rate dropped 2.5 percent in one year from its peak and another full percent in the subsequent year. Under Obama, the rate has dropped only 1.5 percent in two years from its peak.
This is no accident. The slowest economic recovery in modern American history is a direct result of Obama’s policies.
The administration’s doomed-to-fail Keynesian economic approach is based on assuming that Americans, and especially entrepreneurs, are stupid. They trust that we don’t realize that massive deficit spending now must translate into higher taxes later (and perhaps higher interest rates, though historically that connection is not as strong as one might expect).
By way of analogy: Imagine you don’t have any cash, so you borrow $20 from your teenage son. You spend $10 on lunch and put the remaining $10 in your pocket. According to President Obama, you’re $10 richer than you were before. And indeed you may be, but your family is $10 poorer.
Nevertheless, this is the exact sort of thinking that caused Obama and his economic team to tell us that if they were allowed to spend over a trillion dollars (including interest) of our children’s future earnings, unemployment would not go over 8 percent. Instead, as Gene Epstein wrote for Barron’s, “The recovery from the 2008-09 recession has been the slowest since any recession in the post-World War II era.”
Epstein also notes that based on growth rates from prior severe recessions, “the recovery from the recent recession should have taken half as long” and that even calculating GDP without the impact of residential real estate (for those who want to say the real estate crash is the problem, and isn’t Obama fault) this recovery “still comes up woefully short.”
It’s not just spending that would make the drunken sailor blush that has sapped the strength of the economic recovery. It is also every other important policy aspect of the Obama reign.
What could be worse for employment growth than health care “reform” that penalizes employers for reaching 50 employees? This is just one example of the anti-growth aspects of Obamacare, which in turn is just one, if the most important, of the job-crushing laws and regulations imposed by Obama and his radical environmentalist and union thug apparatchiks.
As investment bank UBS noted in a research report entitled “Great Suppression II: Revolt of the Employers,” “Observers are gradually starting to recognize that the tax hikes and regulations emanating from Washington are frightening employers and discouraging hiring.… Rising taxes and the surge in regulation [are] suppressing what J.M. Keynes called ‘animal spirits — a spontaneous urge to action rather than inaction.’ For corporations, a spate of new regulations raises the risk of investing in the U.S., delays projects that companies do wish to pursue, and raises the cost of labor relative to capital.”
The National Labor Relations Board, having been overtaken by Barack Obama’s recess-appointed union attorneys, is using the Board’s power to inspire fear in any company which would expand into a right-to-work state. And given recent extreme aggressiveness by unions (laid perfectly bare by Teamsters President Jimmy Hoffa who, talking about Tea Party activists, said that union supporters should “take these son-of-a-bitches out”), who would want to expand a business anywhere but a right-to-work state?
With his tax policy, his “signature” legislation, and his regulatory apparatus, President Obama attacks would-be job creators at every turn. Is it any wonder that our economic recovery is so slow, with the main victims being the middle class?
But harming employment is not all Obama has done and will do to the middle class. A recent study by the National Federation of Independent Business (NFIB) notes that Obamacare will “impose a cumulative cost of nearly $5,000 per family by 2020” through increased health insurance costs as well as “reduc[ing] private sector employment by 125,000 to 249,000 jobs in 2021, with 59 percent of those losses falling on small business.”
A report by Oliver Wyman consulting says that Obamacare’s costs “will increase premiums in fully insured coverage markets by an average of 1.9% to 2.3% in 2014. The impacts generally increase over time such that we estimate by 2023, the fees will ultimately increase premiums by an average of 2.8% to 3.7%. For small group coverage, this well on average increase the cost to cover an individual by about $2,800, and a family by about $6,800 over a 10-year period, beginning in 2014.”
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?