Obama’s Summer of “Recovery”
As the President and Vice-President run around the country touting their economic recovery plan- such that exists beyond spend and spend more- a look at the real economic numbers are in order. It is increasingly obvious that this Administration is just ignorant of the stark facts or does not understand. Given the alleged brain power on his economic team, I opt for ignorance. Today, Joe Biden is to give a speech on the Obama stimulus spending on science and technology. By any other name, he will sing the praises of the President’s green energy program that has added negligible jobs at a high cost. In fact, from May through July, Obama’s policies have added about 153,000 jobs. Take away the temporary census workers and other government employees, about 80,000 jobs have been added to the economy in that time period. To put it in bleaker perspective, the economy would have to add 8 million jobs to reach pre-recession levels. To Obama and the Democrats, its party time! Whoopie!!!! Thinking back to 1992 when Bush lost re-election to Clinton, that recession actually ended in late 1991. When Election Day rolled around, the economy was rebounding and growing at a rate considerably higher than today, yet Bush still lost. In the fact, the parallels to Carter are more appropriate and we all remember that fiasco.
While it is all well and good to point the finger at the previous Administration with cutesy catch phrases and analogies, Bush and the Republicans are not in power now. It is not a case of driving a car in the ditch. Obama is driving the car into a cesspool. This is Obama’s economy now and it smells and the smell is getting worse. At the June Fed meeting, this bleak outlook was noted: jobless claims hit a 9-month high, consumer spending is declining along with confidence, disposable income has decreased, manufacturing activity has slowed down while inventory is up (Makes sense- no one is buying anything, hence no need to produce anything, hence more jobs lost), consumer and business credit are down, the GDP is anemic, home sales are declining while the CPI remains dangerously low. This is Carter all over again…only worse. By current estimates, most economists now predict that a full recovery will not come until 2013-2014.
Meanwhile, Obama plods along ignorant of reality. For example, look at Obama’s speech in Detroit recently regarding the auto industry. I paraphrase, but to hoots and hollers he exulted in the fact that he put his money on the auto industry and its workers. That is a pretty bold statement since it was not his money, but our money, that was thrown into that black whole of an industry. And while auto sales are up over last year, that hardly is proof of turnaround in that industry. Remember your basic math from 4th grade: negative five is greater than negative ten, but it doesn’t change the fact it is still a negative number.
In the first six months of this year, consumer credit averages $2.4 billion LESS than a year ago. Retail sales are up a meager average of 0.15% while the orders of durable goods are up an equally meager 0.86%. importantly, consumer confidence- a broad gauge of future consumer spending- hovers in the low 50’s. Considering that spending drives 67% of this country’s economy, this does not bode well.
Remember how the housing collapse caused this whole mess because Bush was asleep at the wheel? The Housing Market Index- a look at how real estate professionals feel about the market- has been in steady decline through the summer. Not surprising, existing home sales as well as new home sales are declining. New housing starts are also decreasing which makes sense. Why build more when you cannot move what is out there? And this has a ripple effect since someone has to provide that wood, stucco, concrete, masonry, electrical equipment and plumbing fixtures. Most economists have concluded that the housing bargain hunting has ceased and the downward trends will continue throughout this year. While Obama can hail their 2500 page financial reform bill, it did absolutely nothing to address the housing crisis. In over 2500 pages of “law,” neither Fannie Mae or Freddie Mac are mentioned. Instead, we get yet another “summit” to a address those issues. Instead, we get de facto affirmative guidelines for Wall Street, as if the sex or skin color of those on Wall Street had anything to do with the financial meltdown. According to Obama and his ilk, apparently only white males have a monopoly on greed. Perhaps he should appoint Charlie Rangel and Maxine Waters co-czars on Wall Street oversight.
In short, the economic news is bleak despite his touted $787 billion stimulus package. While every momentary, fleeting positive blip is heralded by Obama and the Democrats, they ignore or downplay the next month’s essential wipe out of any gains. They are explained away via political finger pointing. Instead of relying on the numbers of the Fed or even his own Commerce and Labor Departments, they ignore the fact that a mere 27% of Americans see any improvement in the economy under his leadership. In fact, a minority- 43%- approve of his handling of the economy. Numbers- that is, facts- are tricky things to explain away. Against a backdrop of generic polls showing Republicans at their highest point against Democrats, it is not only Obama and Biden’s rosy economic outlook as late as June they need worry about. Consider Biden’srosy political outlook that Democrats will retain both the House and Senate. This may go down as one of Biden’s greatest gaffes which would be something considering his propensity for gaffes. It spells trouble for the Democrats in the House, if not the Senate also. And if the Fed recovery predictions are correct, it will spell trouble for Obama in 2012. The economy was considerably better for Bush in 1992 than they are for Democrats in 2010, yet Bush still lost. Biden and Obama ignore not only facts, but history also. The Democratic Party’s mantra of 1992 will certainly ring true in 2010 and possibly in 2012: “It’s the economy, stupid.” Except this time, it will be Obama and the Democratic Party wearing the dunce caps.