A Further Perspective

Tell Him How to Mop

Obama’s economic floor remains all dirty wet and sloppy.

By 10.8.13

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More than three years ago, at a $50,000-per-couple fundraiser (or $15,000 per person if you skipped the photo-op) at the five-star St. Regis Hotel in Manhattan, President Obama was in a feisty and confident mood.

In office less than two years, Obama told the well-heeled gathering of supporters that he had put things back on the road after the Republicans had crashed the economy: “After they drove the car into the ditch, made it as difficult as possible for us to pull it back, now they want the keys back. No! You can’t drive! We don’t want to have to go back in the ditch. We just got the car out.”

In fact, the economy for most Americans remained in a ditch that night — and it’s still in a ditch, stuck in the slowest recovery since World War II.

American “households still have not come close to regaining the purchasing power they had before the financial crisis began,” explained New York Times reporter Robert Pear, citing household income figures in a new study by two former Census Bureau officials.

Median annual household incomes, adjusted for inflation, declined 4.4 percent from June 2009, when the recession ended, to June 2013, reported Pear. That income drop was on top of the 1.8 percent inflation-adjusted decline in median household income that occurred during the recession, from December 2007 to June 2009.

In other words, median household incomes, inflation-adjusted, dropped by roughly twice as much during Obama’s “recovery” than during George W. Bush’s recession.

Still, at the St. Regis that evening, with the economy for most Americans stuck firmly in the ditch, Obama continued to toss red meat to a crowd that was simultaneously being served a five-star menu prepared by the French Culinary Institute deans Alain Sailhac, André Soltner, Jacques Pepin and Jacques Torres: Chilled Maine lobster with avocado and black radish in yuzu dressing, roasted filet mignon with a truffle gift box potato, braised leeks and broccoli in cabernet sauce, and petit fours — plus, for the grand finale, opera cake in a mini-chocolate oven.

“We got our mops and our brooms out here and were cleaning stuff out and they’re sitting there saying, ‘Hold the broom better, that’s not how you mop,’” continued Obama, mocking those who questioned his stimulus-based approach and redistributionist ideology for economic recovery. “Don’t tell me how to mop! Pick up a mop!”

Well, it’s more than three years since Obama said those words and here’s what he’s saying now: “The average American earns less than he or she did in 1999,” he declared last month at Knox College in Galesburg, Illinois.

Specifically, the median household income in the U.S. is currently $2,380 lower than in June 2009, adjusted for inflation, a decline that’s hit the lower-income groups the hardest, while the labor force participation rate has dropped to its lowest level since 1978.

And why this decline in earnings, the decline in participation in the labor force? At Knox College, Obama didn’t mention how work hours are being cut and expansion plans shelved because of Obamacare’s mandates. Instead, Obama blamed the rich, saying that pay hikes since 2009 for those at the top have been too large.

That was Fidel Castro’s fixed pie argument. Cuba’s poor were poor, he preached, because the rich had too big a slice of the pie, and because the private sector was too big and the government was too small.

Well, Castro shot his way into power in 1959 and a steady stream of the most successful and entrepreneurial Cubans ended up in jail or Miami.

The result? Cuba’s per capita income in the 1950s was the fourth highest in Latin America, reported Eric Baklanoff, a professor emeritus of economics, finance and legal studies at the University of Alabama, in his 2008 “Cuba Before Fidel” column in the Latin Business Chronicle: “Only Venezuela, Argentina and Uruguay ranked above Cuba, and even Spain and Portugal failed to reach Cuba’s level.”

Additionally, “Cuba was third best in Latin America and the Caribbean for child mortality and fourth best for life expectancy, a reflection of strong nutrition levels, a reasonable health system, and relative prosperity” in 1960, prior to Castro’s fundamental changes in Cuba’s economic system, reports Archibald Ritter, professor emeritus in the Department of Economics and International Affairs at Carleton University in Ottawa.

And Cuba’s rank in Latin America after Castro, after decades the government’s smothering of private enterprise and personal autonomy? “Cuba’s economic ranking in terms of purchasing power of GDP per person fell well down the list in 1990, placing Cuba at the 14th rank,” reports Ritter — and that’s after decades of economic subsidization by the Soviet Union.

Someone needed to tell Fidel that he didn’t know how to mop.

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About the Author
Ralph R. Reiland is the B. Kenneth Simon professor of free enterprise and an associate professor of economics at Robert Morris University in Pittsburgh.