How the Obama campaign is trying to deceive you on the economy.
Calculated Deception. That is the central theme of the Obama campaign. Calculated Deception is the term I use for Obama’s rhetorical practice of trying to take advantage of what he calculates the average person does not know, and his party-controlled, so-called mainstream media won’t report. And that can be seen over and over in the Obama campaign.
Obscuring the Worst Recovery Since the Great
In Monday’s Wall Street Journal, Edward Lazear, former Bush chairman of the President’s Council of Economic Advisors, notes, “A graph titled ‘Private Sector Job Creation’ on the Obama-Biden campaign website… announces proudly that 4.4 million private sector jobs have been created over the past 28 months.” But that factoid is meaningless out of any context, more like a pediatrician boasting to you that under his care your 16-year-old son has grown to 4 feet 4 inches. At the same point during the Reagan recovery, the economy had created 9.5 million new jobs.
Moreover, Lazear correctly adds, “there hasn’t been one day during the entire Obama presidency when as many Americans were working as on the day President Bush left office.” That’s right, contrary to the Obama campaign’s misleading claim of 4.4 million new jobs created, total jobs today are still half a million less than in January 2009 when Obama entered office.
Lazear continues, “Moreover, the unemployment rate, which we were told would not exceed 8% if we enacted Mr. Obama’s stimulus package…has never fallen below 8% during his presidency. The rate has averaged 9.2% since February 2009.” In sharp contrast, after Bush’s tax rate cuts were all fully implemented in 2003, the economy created 7.8 million new jobs over the next 4 years and the unemployment rate fell from over 6% to 4.4%. We won’t see that again until Obama is out of office.
President Obama and his chairman of the Council of Economic Advisors, Alan Krueger, brag that private sector jobs have now grown for “28 straight months.” Obama and Krueger apparently think most Americans do not know that job growth is the norm and not the exception for the American economy. In the 62 years from January 1946, after World War II, until January 2008, jobs grew in 86% of the months, or 640 out of 744. Reagan’s recovery produced job growth in 81 out of its first 82 months, with 20 million new jobs created over those 7 years, increasing the civilian workforce at the time by 20%. Even George W. Bush oversaw 52 consecutive months of job growth, including nearly 8 million new jobs created after his 2003 capital gains and dividends tax rate cuts became effective (which Obama is dedicated to reversing).
The relevant streak of Obamanomics was extended in the June jobs report. That report established that under President Obama America has suffered 41 straight months of unemployment over 8%, which the Joint Economic Committee of Congress confirms is the worst recovery from a recession since the Great Depression almost 75 years ago. Indeed, the last time before Obama unemployment was even over 8% was December 1983, when Reaganomics was bringing it down from the Keynesian fiasco of the 1970s. It didn’t climb back above that level for 25 years, a generation, which is a measure of the spectacular success of Reaganomics.
But Krueger tells us about that June jobs report, “It is important not to read too much into any one monthly report.” The Obama Administration, however, has said the exact same thing for each of the last 30 months, as documented July 6 by Bryan Preston for PJMedia.
How Stupid Does He Think We Are?
President Obama keeps telling us his economic program should be judged by comparison to the worst of the recession. Look, we have turned the corner, he says, and the economy has started growing again, just like your teenage son. But the correct comparison is to prior recoveries from past recessions. As Lazear explained, “Yet we know that all recessions end and that labor markets recover eventually. What distinguishes this labor-market recovery is not that jobs are finally being created but rather the growth rate is so slow that it will be 2016 before we return to pre-recession employment levels.” Obama is campaigning as if he were certain that a majority of Americans do not know that all recessions end and that labor markets recover eventually.
American recessions since the Great Depression previously have lasted an average of 10 months, with the longest at 16 months. But this latest recession began in December 2007. The June labor report showed that the most commonly cited U3 unemployment rate remains stuck at 8.2%, with the number of unemployed Americans actually rising over the last 3 months by 76,000, 54 months after the recession started, and 3 years after it was supposedly over, the longest period of unemployment that high since the Great Depression.
Barack Obama knows that history, even though he is sure a majority of you don’t. That is why he was confident enough to tell Matt Lauer and the nation in February 2009 regarding economic recovery: “If I don’t have that done in three years, then this is going to be a one-term proposition.” And it is why the Administration so confidently labeled the summer of 2010 “Recovery Summer,” as by historical standards the recovery was already way overdue by then.
Obama’s tragic jobs record reflects the dismal economic growth under his administration’s throwback, Keynesian economic policies. For all of last year, the economy grew by a paltry real rate of 1.7%, only about half America’s long-term trend. The average so far this year has been no better. That dismal growth is further reflected in the Census Bureau reports of falling real wages under Obama, kicking median family income back over 10 years, with more Americans in poverty today than at any time in the more than 50 years that Census has been tracking poverty.
In sharp contrast, in the second year of Reagan’s recovery, the economy boomed by a real rate of 6.8%, the highest in 50 years. Real per capita disposable income increased by 18% from 1982 to 1989, meaning the American standard of living increased by almost 20% in those first 7 years of the Reagan boom alone. The poverty rate, which had started increasing during the Carter years, declined every year from 1984 to 1989, dropping by one-sixth from its peak. That is the proper comparison for Obama’s economic performance.
Obama cannot explain away the disgraceful failure of his Keynesian economic policies by arguing it is because the recession he inherited from Bush was so bad. The American historical experience is that the worse the recession, the stronger the recovery, as the American economy snaps back to its world-leading, long-term, economic growth trend line. Based on this historical record, we should be enjoying the third year of a raging economic recovery boom right now.
But the dismal economic performance we have suffered instead, with no real recovery from the steep 2008-2009 recession at all, is because Obama has so thoroughly followed the opposite of every policy of Reaganomics. I first argued in the Wall Street Journal in February 2009 that Obamanomics was going to produce the opposite of Reaganomics as a result. That is what is now just beginning to happen.
“The Rich” and Their Fair Share
We can see the same Calculated Deception in regard to President Obama’s tax policy, where he has been barnstorming the country for three years now telling us that “the rich” (whatever that is supposed to mean) do not pay their fair share of federal taxes, and the middle class pays more as a result. But the CBO issued a report last month that proves him grievously wrong.
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