Don's Tuesday Column

           THE WAY I SEE IT   by Don Polson    Red Bluff Daily News   5/03/2016

           Obama’s economic delusions

The headlines alone tell the tale: “How does Hillary run on a bad economy” (J. Hinderaker), “Hillary to run against…Obama?” (re: Obama’s economy, S. Hayward), “White House struggles to explain weak economy as Obama boasts of job growth” (Dave Boyer), “As GDP Flatlines, Obama Brags About His Economic Record” (Investors.com), and “Simply the worst—Obama is first president ever to not see single year of 3% GDP growth” (Jim Hoft).

Hoft: “The rate of real economic growth is the single greatest determinate of both America’s strength as a nation and the well-being of the American people. On Thursday, the Commerce Department announced that the US economy expanded at the slowest pace in two years. GDP growth rose at an anemic 0.5% rate after a paltry 1.4% fourth quarter advance.

            “Ronald Reagan brought forth an annual real GDP growth of 3.5%. Barack Obama will be lucky to average a 1.55% GDP growth rate. Barack Obama will be the only U.S. president in history who did not deliver a single year of 3.0%+ economic growth.

“According to Louis Woodhill, ‘Assuming 2.67% RGDP growth for 2016, Obama will leave office having produced an average of 1.55% growth. This would place his presidency fourth from the bottom of the list…above only Herbert Hoover (-5.65%), Andrew Johnson (-0.70%) and Theodore Roosevelt (1.41%).’”

 Accompanying two of the articles is a chart by The Center for Economic and Policy Research: “Index of Real GDP Since Start of the Recession for the Last Four Recessions.” The Reagan economy, 8 years after the 1981 recession, was over 35% larger, meaning more jobs, higher wages, greater tax revenue, etc.

The Clinton economy was almost 30% larger after 8 years; but Clinton did nothing to grow the economy beyond accepting Republican mandates that no taxes be raised and spending be constrained. The George Bush economy grew similar to the Clinton economy for almost 7 years following the 2001 dot-com crash and terrorist attacks, becoming about 20% larger.

CEPR comments: “The weak growth for the quarter puts this recovery even further behind any prior recovery at the same stage. After eight and a quarter years, the economy is only 10.1% larger than its pre-recession level of output. A typical recovery would have seen at least twice as much growth.”

Sanders, Trump (or any Republican candidate) can run against said weak economic performance, while Hillary tries to skate past providing corrective policies—she has no new ideas. Sanders’ prescription is essentially to double down on the same type of centralized control and micromanagement that produced our current “malaise.” F.D. Roosevelt’s similar policies extended the Great Depression from a bad recession into an additional 7 years of misery, a pathetic record rescued only by WWII (per UCLA economist Lee Ohanian).

In general, Obama and most Democrats are treating bad economic numbers, as well as expectations by some that another recession approaches, as illustrated by Michael Ramirez. He drew a cartoon that showed Obama standing high on the stern of a sinking Titanic-like ship labeled “U.S. Economy,” proclaiming, “See, it’s never been higher.”

Hinderaker offers some reflections on what actually occurred and what, if any, credit Obama can claim: “Democrats love to cherry pick statistics to make the case that Barack Obama’s stewardship of our economy has been successful. Obama himself often claims to have saved the world economy from disaster, but how? If anything averted collapse, it was the Troubled Asset Relief Program, which was executed by the Bush administration, for better or worse. If any government measure saved the economy, it was TARP.

“The ‘stimulus’ bill that didn’t stimulate anything was enacted in Obama’s first year (DP: remember the recession officially ended in June of 2009, before any Obama/Democrat policies went into effect); that had only a fraction of the predicted impact and no one claims it somehow rescued the world economy. Nor did Dodd-Frank, which was passed in 2010, after the financial crisis had passed. Dodd-Frank’s principal effects were to devastate community banks and starve small businesses of capital.”

D. Boyer wrote, “White House press secretary Josh Earnest said that congressional Republicans were in part to blame for the weak growth, saying the economy would be stronger if Congress had agreed to Mr. Obama’s proposals for higher spending on infrastructure projects three or four years ago—their ‘stubborn refusal to consider any of President Obama’s priorities.’” Irony abounds over such arguments after Democrats got their stimulus wish list, together with trillions of dollars of deficit spending; Obama admitted, “there are no shovel-ready projects.”

Investor’s Business Daily observed that, “while Obama claimed to have saved ‘the banks’ and ‘the auto industry,’ he didn’t save either industry. Obama’s only contribution to GM and Chrysler’s bankruptcy process was to protect union interests at taxpayer’s expense. Dodd-Frank didn’t save banks…His stimulus was a massively expensive bust…Obama talks about 14.4 million new jobs since 2010, without noting that working age population grew by 15.8 million over those same months. He touts the 5% unemployment rate, but fails to mention that it would be more like 10% if millions of Americans hadn’t given up looking for work altogether.”

From the waste of government green energy subsidies, to Obamacare, to deficits, taxes and regulations—100% Obama’s responsibilities—this weak economy is Obama’s alone to bear.