A Recovery That Never Comes
The President has been promising an economic recovery ever since 2008, when he promised to create 5 million green jobs and to "act quickly to help people stay in their homes." With all the promises Obama made, many voters who supported him expected the economy to begin turning around early in 2009. But then, shortly after his election, Obama let it be known that the economy had been driven "into a ditch" deeper than he had imagined, and the recovery would take some time. Then he discovered that the economy he inherited was not just in a ditch, it was actually a "mess" as well. There were always new excuses for why the recovery never came.
Now it seems, just as the President was prepared to declare "mission accomplished," the economy is slipping back into the ditch, only it's no longer George Bush's ditch. This ditch is entirely of Obama's making. After exhibiting a few "green shoots" earlier this year -- the first real signs of improvement in three years -- the economy is slowing once again. Unemployment and GDP growth are both declining, not improving. Even the President is now admitting there will be "ups and downs" and he's "got a lot more work to do."
The latest indicators point to an economy that is slowing if not headed back into recession. March employment numbers were worse than any economist surveyed by Bloomberg imagined. 120,000 new jobs are not even enough to absorb new entrants in the workforce, much less to bring down unemployment rates. Strangely, the official unemployment rate came down from 8.3 to 8.2%, but it did so because a quarter million Americans left the workforce, many of them filing for disability benefits or choosing to retire early.
Not only is unemployment high, under this President those who are still working have seen their incomes decline by $3000 on average. Pumped into the economy over the last three and a half years, those lost wages would amount to $1.575 trillion. That's even more than Obama squandered on his so-called stimulus in 2009, and it would have been spent a lot more wisely had it been left in the hands of private citizens.
An extra $6,000 per family amounts to almost half of a typical mortgage payment. By one estimate, 26,230,000 foreclosures could have been prevented or significantly delayed if Obama's $787 billion stimulus funding had remained in private hands. Had wages not declined in aggregate by $1.575 trillion, homeowners would have retained twice the income needed to prevent an anticipated 25 million foreclosures.
Yet this President has not even acknowledged the suffering of every American worker whose income is $3,000 less than it was when he took office. Obama is so extraordinarily arrogant, and so detached, that the widespread suffering of ordinary people makes no impression on him. At the same time, he rushes to attend to the wishes of billionaire green energy investors, union bosses, and environmental activists -- the very ones who have caused America's economy to stagnate.
Things are bad at present, but they aren't likely to get better anytime soon. Respected forecaster IHS Global Insight predicts that the economy will slow to 2.1% GDP growth by July. Given current policies, with Obama's plan for huge tax increases and with new regulations scheduled to take effect after the election, the long-term outlook is not any better. For all of 2012, BusinessWire predicts U.S. GDP growth of 2.2% and for 2013-2016 only 2.3%.
To put that in perspective, U.S. long-term GDP growth, excluding periods of recession, has averaged 4% over the past 200 years. President Obama inherited an economy that was already in recovery by the end of the first quarter of 2009. But since Obama took office, GDP growth has averaged 1.42%, about a third of what one would expect.
That low level of growth might be enough to force millions of Americans into unwelcome retirement, but it is not enough to bring the actual jobless rate down. It's not even enough to absorb the millions who are about to graduate this spring.
Obama has failed to deliver on the most important promise of the 2008 campaign: his promise of jobs and prosperity for all. Now he is repeating that promise, but like the child who cried wolf, no one really believes him. Americans have been waiting for a vigorous economic recovery for 39 months, and this president has failed to deliver. All we've had is one excuse after another. It's George Bush's fault. It's Greece's fault. It's the Japanese tsunami. It's corporations sitting on their cash. It's Big Banks refusing to lend. It's the price of gas. Obama has more excuses than Rihanna has Facebook friends.
But excuses don't bring about an economic recovery. Not until Obama's anti-growth policies are reversed will America return to normal GDP growth. That means ending handouts for losers like green energy, public sector unions, and socialized medicine, and allowing the free market to return to a normal business cycle. At this point in the cycle, GDP growth should be closer to 5% and unemployment down to 5.5%, as they were under George Bush during his fourth year in office. Instead they stand at 2.4% (for the last half of 2011) and 8.2%, respectively.
For the ordinary American, things just get worse, but Obama keeps mumbling "be patient" and laying the blame elsewhere. Tax the rich, he shouts, and that will make things better. How will taxing the rich create jobs? Or making inflammatory speeches in front of the United Auto Workers, or throwing yourself into the Trayvon Martin case by saying, "If I had a son, he would look like Trayvon"? That kind of divisive rhetoric does not create a single job. It only divides and weakens the country.
More Americans have lost their jobs and their homes, and seen their incomes decline under Obama than under any president in history, and all of this in just one term. Yet this President, who has destroyed the dream of success for so many, imagines he has "a lot more work to do." Just imagine how many dreams Obama could kill in another four years.
Jeffrey Folks is the author of many books on American culture, including Heartland of the Imagination (2011).