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EDITORIAL: Obama’s economic crisis
By Bill Clinton’s standards, we’re in a severe downturn
Question of the Day
The Commerce Department on Friday delivered very bad news to President Obama. Economic growth in the second quarter of 2012 plummeted to 1.5 percent — a critically poor showing going into an election. Twenty years ago, then-candidate Bill Clinton sounded the alarm after receiving similar information. His words then are prophetic today.
In 1992, the second-quarter growth came in at 1.4 percent, though the economy enjoyed a lower unemployment rate and drastically smaller federal budget deficits. “Today’s economic statistics confirm what the American people have been trying to tell the president for some time now,” Mr. Clinton said at the time. “We are in a crisis, an economic crisis.”
That message helped propel the former Arkansas governor into the Oval Office. “Maybe today’s statistics will be a wake-up call to an administration that is still offering alibis, not action, while people are hurting,” he said then. Mitt Romney could credibly say the same thing about Mr. Obama, considering the president’s assertion at a fundraiser in California on July 23, “We tried our [economic] plan — and it worked.”
Given the rapid decline in growth rates, it’s legitimate to ask how Mr. Obama measures success. Fourth-quarter 2011 growth for some reason was revised upward by more than a full point, from 3 percent to 4.1 percent, which may have been touted as evidence of Mr. Obama’s effective leadership. Now it means that the current contraction is far worse than economists expected. Instead of growth being cut in half since last year, it has plunged by almost two-thirds.
The president “offers nothing more than blame and more of the same,” Mr. Clinton said in 1992. The same is true today. Mr. Obama has no new direction to offer, no compelling, positive vision for the future. Every aspect of his economic policy is dominated by increasing the size and role of government. The campaign is struggling to shake the impact of Mr. Obama’s statement to business owners that “you didn’t build that,” claiming it was taken out of context. That sentiment was fully within the context not only of the pro-big-government speech in which it appeared but also in the sum of Mr. Obama’s track record. It dovetails with the point he was making when he said, “The private sector is doing fine,” while arguing for increased government job creation in a time of massive budget deficits.
The White House blog responded to the miserable gross-domestic-product report saying that “the economy continues to move in the right direction,” which is an odd conclusion because the trend is sharply downward. Chairman of the Council of Economic Advisers Alan Krueger wrote that “additional growth is needed,” though it doesn’t take an economist to figure that out.
The new Commerce Department report claims government deficit spending did more to boost the economy in the early days of the recession than at first believed, but Mr. Obama’s statisticians revise the past more than any previous administration, and always in ways that support the White House narrative. “He is deliberately misrepresenting this,” Mr. Clinton said in 1992. “Here’s a person with a terrible record on government spending and a terrible record on jobs and a person who broke his word on taxes. He has no credibility.” Twenty years later, it’s still the economy, stupid.
The Washington Times
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