On July 24,
2013 President Obama stated, “But -- and here's the big but -- I’m here today
to tell you that we’re not there yet. We all know that. We're not there yet; we've got more work to
do.” This quote followed a lengthy and
positive review of the economic record of his administration. The words were designed -- according to the
president -- to refocus America’s attention on and reconfirm his ongoing
resolve to improve the economy even in the face of obstructionist congressional
republicans. The economy has become a
staple of this president’s rhetoric and ‘immediate’ priorities many times over the past 4.5 years…so
often that it is easy to forget that economic performance factors also matter
and that our government’s own economic statistics contradict his aggrandizing words.
Almost
begrudgingly and only recently has the media begun to report on the Obama
administration’s scandals including Benghazi, the IRS, NSA, Pigford and others in
combination with his rapidly declining job approval numbers. Perhaps as a consequence, President Obama
hoped to create misdirection to derail the expansion of the
narratives fixated on the scandals by using his well-honed and vaunted verbal
dexterity. In the past he has
successfully employed misdirection to obfuscate measurable policy failures
at the expense of reality,
clarity and truth. In addition, the
President has certainly learned to use to his advantage the mainstream media’s (MSM)
penchant for biased economic reporting, i.e. not presenting complete performance assessments, consistently
under reporting economic negatives and ignoring the reality of a virtually
nonexistent recovery.
Obama’s attempt
to change the subject gains further currency given his follow-on speech of July
25 when he suggested Washington should end its focus on an “endless parade of distractions
and political posturing and phony scandals” and support his agenda of more spending, further stimulus
and higher taxes. The President clearly
believes he can ‘sell’ his economic prowess of the past 4.5 years (as he did
immediately before the last election) to suppress the dangers of the metastasizing
scandals even though the facts
demonstrate very little economic progress to date during his tenure.
Yet have
Obama’s economic solutions failed? Can
his initiatives be shown to have been a source of our current economic problems
– slow GDP growth, lagging job creation, constricted free markets, ballooning
deficits and debt, growing and counterproductive regulation, crippling taxation
and the penalization of small business.
A survey and
realistic appraisal of available economic facts/statistics surfaces the
following:
Employment/Unemployment
- The July unemployment picture essentially replicated the glacial progress made in new job generation seen since the end of the recession in 2009. The Bureau of Labor Statistics (BLS) reported the addition of 162,000 non-farm jobs in July which demonstrated a decline against the average gain of 189,000 per month during 2012. The growth was, on closer inspection, at the lower end of the income spectrum and partially composed of 47,000 retail, 38,000 leisure and hospitality and 13,700 wholesaling jobs – fully 61% of the new jobs reported. The statistics also followed the trend that 77% of this year’s new jobs are part time in structure.
- The unemployment rate declined to 7.4%; a decline assisted by more than 250,000 frustrated job seekers dropping out of the marketplace. The rate of 7.4% ended a record drought of 54 months of unemployment rates in excess of 7.4%. Nevertheless the much headlined 7.4% unemployment rate is quite misleading since an estimated 22 million Americans are underemployed or unemployed and not included in the unemployment calculations. The government however does track two statistics that indicate the extent of today’s jobs paucity – the U5 & U6 rates of labor underutilization that were 8.8% and 14.0% respectively in July.
- On a more macro level the Census Bureau tracks monthly resident population growth. The average resident growth from April 2010 to November 2012 (32 months) equaled 185,684 per month or by extension an aggregate of 9,841,252 people have been added to the population since Obama’s inauguration – as population grows a corresponding number of jobs is needed just to maintain economic equilibrium. By contrast the BLS reports an increase in employment of 2,132,000 net jobs from January 2009 to July 2013 or a mean monthly increase of 38,764 jobs. The difference in the two numbers is blindingly obvious…where are the jobs?
- 11,514,000 people are currently unemployed (a 7.4% rate) of a 155,798,000 civilian labor force. But as of today the BLS is reporting an astonishing 89,957,000 able-bodied adults are sitting on the employment sidelines thus creating a labor force participation rate of only 63.4%. Linking this fact with over 8,900,000 individuals exiting the job marketplace during Obama’s tenure and the only stunning conclusion that can be drawn is that a virtually jobless recovery is occurring.
GDP-Economic
Growth
- The MSM’s ballyhooing of the previous quarter’s gross domestic product (GDP) growth rate of 2.4% came to a screeching halt in late June. The Commerce Department revised the 1st quarter GDP number from 2.4% to a tepid 1.8%. The initial 2.4% estimate marked the highest quarterly performance number since the 4th quarter of 2011 when GDP equaled 4.1%. GDP has exhibited both significant volatility and a downward trend since the recession ended. In 2010 average quarterly GDP growth equaled 2.4% which declined to 2.0% in 2011 and subsequently to 1.7 % in 2012. 2012’s fourth quarter saw a meager advance of just .4%. Given the first quarter GDP performance of 2013, average quarterly growth for 2013 will struggle to equal 2012’s appalling 1.7% level. The trend has triggered recent economist predictions that 2013 may grow at only 1%.
Income
- Both household median income and personal disposable income continue to decline although the rate of decline has slowed since the end of the recession. Median household income fell 4.2% during the recession and eroded by another 4.1% in the 2 years following the recession. The declines in income continue as seen in the BLS July jobs report that shows not only a decrease in the average work week to 34.4 hours but a reduction in average hourly earnings for all employees to $23.98. Sadly this reinforces the long term trend of both statistics.
Other
Notable Factors
- Less than 50% of working Americans now hold a full-time job. The BLS shows 144,285,000 were employed in July but only 115,505,000 were employed full-time or 47%. And since the beginning of this year fully 77% of the 953,000 jobs created were part-time…an eye opening 731,000 part-time jobs.
- Home ownership fell to its lowest level in 18 years. Home ownership peaked in 1995 at 69.2% but has declined to 65% in the 1st quarter of this year as reported by the Census Bureau.
- Over the previous four months the MSM has intermittently trumpeted a rebound in housing as an economic bright spot or at a minimum a precursor of a more economic ‘good news to come’. However the Commerce Department reported an appreciable setback in June in the number of housing starts that has dragged into July, i.e. work began on 836,000 houses (annualized rate) a drop from the 928,000 reported in May. Both prices and length of time on market of existing homes continues to vary dramatically by market.
- The Center for Immigration Studies released an analysis concluding that all job gains subsequent to 2000 can be accounted for by immigrants – both legal and illegal. The report shows that 22.4 million immigrants held jobs at the outset of the year an increase of 5.3 million since 2000 while native born Americans with jobs declined 1.3 million.
Many
more additional negative and discouraging economic
realities can be identified – ethnic unemployment rates, growing debt, deficit
spending, food stamps, increasing poverty, oppressive regulations – yet more citations
will not build a stronger case against the Obama ‘economic recovery’. The recovery is a truly phony event
constructed on wishful thinking and happy talk by the administration and by some
in the mainstream media.
Today, if
the same proportion of Americans were employed as was the case a decade ago,
there would be almost 9 million more people working. And last year maybe 2 million discouraged adults
would not have ‘given up’ and left the workforce. And maybe, just maybe, a majority of
Americans would be holding full-time jobs.
And maybe if the Federal Reserve was not trying to stimulate the recovery
with expenditures of $85 billion per month to ‘quantitatively ease’ interest
rates, capital investment would be spurred. And maybe
household incomes and personal disposable income would be growing not the
specter of debilitating future inflation. Then and only then would the American economy
be actually experiencing a recovery based on the economic measures cited that dictate
a real economic rebound.
No matter
what President Obama may say, the recovery is a truly phony event, constructed
on wishful thinking and happy talk by the administration and by some in the
mainstream media. The “phony scandals”
plaguing his administration, on the other hand, are quite real. It is up to the American people to decide
which issues deserves more attention.
