President Obama believes that his economic policies are working, which begs the question: What are the goals of his policies? If his goals have been job creation, leveling of the trade imbalance, and economic growth and stability, his policies have been a huge failure. If however, his goals has been the opposite, he is correct…they have been amazingly successful.
Touting the recent Labor Department report that 114,000 new non-farm jobs were created last month, bringing the unemployment rate down to 7.8 % (the level it was when Obama took office) Obama says this is evidence that his policies are working and that, “We are moving forward again.”
Using a more traditional model, the actual unemployment rate stands at approximately 15%, and is by no means demonstrative of Obama’s policies putting people back to work. Mitt Romney has been right to criticize Obama’s assessment, noting the fact that this number has only recently dropped, and it dropped in large part due to people ceasing to look for work.
In order for job creation to merely keep up with population growth, our economy needs to add approximately 125,000 jobs each month. In reality what was added to the economy was yet more unemployed workers, albeit at a slower rate than over much of the last 3.5 years.
I know how this may sound to some, but I believe that this number has been massaged for Obama’s political benefit, is only truly reflective of Obama’s dreams rather than reality, and that the timing of this “increase” is pure political theatrics. While I have no evidence of this “conspiracy,” at least I am not alone in questioning the accuracy of the data. In a piece dated October 16, 2012, Christopher Matthews of Time Business News says that, “The Unemployment Report Wasn’t Rigged, but It’s Not Accurate, Either.”
The U.S. has a mammoth trade imbalance with the rest of the world, a gap that grew from $42.5 billion to $44.2 billion in just the month of August. By any measure, this is a 4% move in the wrong direction, in a very short amount of time.
During the Presidential Debate Tuesday evening, President Obama said, “I believe that the free enterprise system is the greatest engine of prosperity that the world’s ever known, I believe in self-reliance…but I also believe that everybody should have a fair shot.”
While he was clearly attempting to garner the support of undecided (and possibly unemployed) voters with that statement, his intent was not as obvious as it may have seemed. The words “fair shot” sound nice, but are open to very loose interpretation. Whatever a “fair shot” looks like to Obama, this statement portends yet more government intervention in our economy, which by definition is anything but “free enterprise”.
In order to revive U.S. manufacturing, and prevent jobs from leaving the country, President Obama recommends:
- Tax breaks for companies that keep positions in the United States
- Tax penalties for firms that move work overseas
- Government-backed hubs that connect community colleges and businesses, to ensure people are trained for open positions
Together, he imagines that these policies could lead to 1 million new non-farm jobs being created by the end of a theoretical second term of office. That is 1 million jobs in a four year Presidency, or roughly 21,000 jobs every month. 1 million really sounds like a big number, until you spread it out over the suggested time period…and with 12.088 million unemployed (seasonally adjusted, of course) 1 million jobs isn’t nearly enough to get America working again.
Since Obama vociferously opposes tax breaks for the rich, one must wonder which poor companies that employ many workers are to be the recipients of these tax breaks. I cannot believe there are enough poor employers out there to make a difference.
Combining targeted job-training with tax breaks/penalties may actually increase the raw number of jobs in the economy, but is this really “free enterprise?” I think not…and Obama knows not. In assigning tax breaks and penalties, Obama would again be choosing winners and losers, rather than letting the free market make those determinations. It is nothing more than crony-capitalism, whitewashed for mass consumption.
Wikipedia defines economic stability as:
“…an absence of excessive fluctuations in the macroeconomy. An economy with fairly constant output growth and low and stable inflation would be considered economically stable. An economy with frequent large recessions, a pronounced business cycle, very high or variable inflation, or frequent financial crises would be considered economically unstable.”
While I don’t completely agree with that definition (inflation, even at a low rate, is representative of anything but stability) if we are to take him at face value, President Obama has no clue that this definition even exists.
A chart of the Dow Jones Industrial average may appear to show relatively stable growth over the last 4 years, but other factors have painted this tape favorably, for mass consumption. That is, the market is being forced upward, so that you and I can look at it and feel good. The truth is that this relative stability has been purchased by over $2 trillion in new debt (a doubling of the debt Obama promised to cut in half) and massive government intervention in the economy.
This new debt has had the unpleasant effect of also devaluing every dollar in circulation (think: hidden tax) so that the money you earn buys you less with each and every paycheck, hitting the lower and middle class hard as they struggle with their monthly budgets.
Is selling our progeny into debt-slavery…paying for the stock market always rising with the blood of our children and grandchildren…really worth this pretty picture? My kids don’t think so, and I bet yours wouldn’t either, if you asked them.
During Tuesday’s debate, Obama said, “(When I took office) the economy was on the verge of collapse because we were about to go through the worst recession since the Great Depression…”. His solutions since that day have been incomprehensible. If high unemployment, a huge trade imbalance and unstable (but painted-for-mass-consumption) markets were the goals of the Obama administration, then it is time to proclaim, “Mission Accomplished!” If however, the goals were more along the lines of what Obama told us they were, this man needs to be unemployed starting in January.