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LAMBRO: Obama’s economic legacy
It’s not worst recession since the Great Depression, but the worst recovery ever
The sharp slowdown in hiring stunned President Obama’s worried campaign strategists Friday, fueling deeper doubts about a second term.
The bleak jobs report and a new election poll struck the White House with a politically withering, one-two punch. The Obama economy created only 120,000 jobs in March, not enough to even keep up with population growth. And a Washington Post poll shows more Americans now trust likely Republican presidential nominee Mitt Romney to handle the economy better than Barack Obama by 47 percent to 43 percent.
Mr. Obama’s weak, persistently high unemployment economy remains the overwhelming issue in this election. Nothing else comes close. Its power was reflected in Monday’s daily Gallup poll that showed his job approval numbers sinking to 45 percent approval versus 46 percent disapproval.
The employment numbers showed the jobless rate edging down to 8.2 percent, because 133,000 long-unemployed adults were so discouraged they stopped looking for work and thus were not counted in the labor force.
Actually, the jobs picture was even bleaker than the one the network news programs reported last week. When you deduct jobs in the heavily subsidized health care industry and the temporary work services, the private sector really added only 98,000 jobs in March. “Factoring in those discouraged adults and others working part-time for lack of full-time opportunities, the unemployment rate is about 14.5 percent,” calculates University of Maryland economist Peter Morici.
Throw in college graduates who are in low-skill jobs in counter work and waiting tables because they can’t find livable employment and the rate is closer to 18 percent. “Prospects for lowering those dreadful statistics remain slim. The economy must add 13 million jobs over the next three years - 362,000 each month - to bring the unemployment rate down to 6 percent,” Mr. Morici says.
That would require the economy to grow at 1980s-style, Reagan recovery growth rates. But not even Mr. Obama’s economic advisers believe that’s going to happen in the seven months before the November election.
It’s not a number you ever hear mentioned by Mr. Obama or his campaign strategists, or even his economic advisers, but the economy grew at a snail’s pace 1.7 percent last year, and isn’t expected to do much better than an anemic 2 percent rate this year.
What’s holding the Mr. Obama economy back are his policies that have led to weak economic growth: a failed spending stimulus plan that added nearly $1 trillion to the national debt; temporary tax credits that proved impotent; counterproductive business regulations; job-killing health care mandates; hostility to new trade agreements that would boost U.S. exports; and dysfunctional oil and gas energy policies that are squeezing consumers and businesses alike.
Mr. Obama is going around the country insisting that the U.S. economy is really “moving in the right direction,” but that’s not what the vast majority of Americans feel or believe. In fact, it’s hard to recall a White House that was so out of touch with the grim economic reality that many Americans are experiencing in the real world.
The new Washington Post poll reports that a walloping 76 percent say “The economy is still in a recession.” The reason: While the official unemployment rate is a national average based on surveys, tens of millions of Americans do not live in the world of economic averages. In at least 18 states, the jobless rates were between 8 percent and 12.3 percent. Including the most populated: California (10.9), Florida (9.4), New Jersey, (9.0), and Illinois (9.1), to name just a few.
Another key reason Americans do not feel that we have come out of the recession yet: Despite the White House’s ballyhoo over its mediocre jobs numbers, the job deficit continues to grow. “There are 5.1 million fewer jobs now than there were when the last recession began in December 2007,” the Post reported in the wake of Friday’s disappointing job numbers.
Mr. Obama has been fond of saying throughout the past three years that the country’s been in the worst recession since the Great Depression. He has repeated that refrain month after month as an excuse for his failure to lift the economy and get it back on track. He wants us to think that no one has faced this kind of economic challenge before. Baloney.
The truth is, Mr. President, “our current recovery pales in comparison with most other recoveries, including the one following the Great Depression,” notes Edward P. Lazear, who chaired the President’s Council of Economic Advisers between 2006 and 2009. Even after the economy plunged into a depression in 1930, ‘31, ‘32 and ‘33, “In the three following years, the economy rebounded strongly with growth rates of 11 percent, 9 percent and 13 percent, respectively,” Mr. Lazear reminded us last week in the Wall Street Journal. Mr. Lazear, a professor at Stanford University’s Graduate School of Business, makes a good point. Mr. Obama isn’t the only president who has dealt with severe recessions.
The 1980-82 recession was one of our deepest in recent decades, with unemployment hitting 10 percent at one point. But after President Reagan cut taxes across the board, we came roaring back with economic growth rates that Mr. Obama can only dream about. At the end of Reagan’s third year in office, the economy grew by 7.7 percent in the fourth quarter. In his fourth year, when he was up for re-election, the economy expanded in each quarter by 8.5 percent, 7.9 percent, 6.9 percent and 5.8 percent, respectively. The unemployment rate fell to 7.5 percent and Reagan carried 49 states.
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