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LAMBRO: Crunch time for Obama’s weak economic numbers
Recovery begins with a President Romney
The bleak truth about the comatose Obama economy is not just that it’s barely breathing. It’s still not far from another recession.
President Obama’s campaign bid for another four years is loosely based on the preposterous claim that the economy is “moving forward.” In fact, it’s been falling backward or at least treading water on a number of fronts, and economic forecasters say it will weaken further under his policies if he is re-elected.
Economists predict yet another weak jobs figure Friday that may push the unemployment rate up a bit, reminding undecided voters and even jittery Obama supporters that the jobs picture isn’t going to improve anytime soon under his failed presidency. It will continue to get worse.
The broadest and most accurate measurement of the American economy is its gross domestic product (GDP), which totals everything we make, produce, buy and sell here and abroad.
The 2011 fourth-quarter GDP growth rate was a short-lived 3 percent. But this year it plunged to 2 percent in the first quarter and dropped to a pitiful 1.3 percent in the second.
Last week, the Commerce Department reported that third-quarter GDP edged up to 2 percent, but economists and top economic writers said there was very little to cheer in this latest mediocre growth rate.
A 2 percent GDP “is nothing to write home about, given the high unemployment rate,” writes Neil Irwin, an economic analyst for The Washington Post. It’s “not enough to put the millions of jobless people back to work with any speed.”
The Wall Street Journal reported that the Commerce “report’s details and other recent figures suggest the economy is more likely to slow than accelerate in coming months.”
Troubling symptoms emerged from that report, including a 1.6 percent decline in U.S. exports, and a continuing weakness in business expansion that fell by an annualized rate of 4.4 percent. Business investment stalled last month as capital-goods orders remained flat and employers held on to their cash reserves in the face of an increasingly uncertain and sluggish economy.
For weeks, there have been numerous published reports of businesses laying off workers, or declining even to fill job openings amid fears that Mr. Obama may let the Bush tax cuts automatically expire Jan. 1. This would drive up taxes for more than 90 percent of taxpayers, which would push the economy into a recession.
The National Association of Manufacturers said failure to prevent sharply higher tax rates from kicking in will kill close to 6 million jobs by 2014 and push the jobless rate to 12 percent.
Mr. Obama and his economic advisers never address any of this. The iron-clad rule in the White House and the Obama campaign team is to whitewash every economic report, no matter how bad the economic numbers are.
Last week’s weak GDP report “provides further evidence the economy is moving in the right direction,” said Alan B. Krueger, who is chairman of the White House Council of Economic Advisers.
Former Massachusetts Gov. Mitt Romney saw things very differently, saying the quarterly report showed economic growth has stalled over the past 10 months and was little or no better this year (1.7 percent on an annualized basis) than last year’s 1.8 percent GDP growth rate.
A little-reported factor behind the uptick in GDP was a sharp increase in federal spending, including a 13 percent jump in defense expenditures. The administration pushed hard to spend every dollar Congress had approved before the end of the fiscal year to boost what would have been an even weaker GDP rate.
In the less than a week before the election, Mr. Romney must drive home the core of his campaign to deny the president a second term: Mr. Obama has failed to pull the economy out of its slump and put tens of millions of unemployed and underemployed Americans back to work.
“The [7.8 percent] unemployment rate has been lowered mostly by folks quitting the job market altogether,” writes University of Maryland economist Peter Morici. “If the adult labor force participation rate was the same today as when the recovery began, unemployment would stand at 9.7 percent.
“Adding in folks relegated to part-time work, but who would prefer full-time positions, the jobless rate jumps to 14.7 percent,” Mr. Morici said.
Mr. Romney has pounded Mr. Obama with a litany of evidence that his stimulus spending has not worked and never could work. While Mr. Obama talks only about protecting the middle class, the group that have suffered the most from his anti-growth policies has been the middle class.
Declining median income is 8 percent lower than it was in 2007, the year before the economy fell into a recession. It’s down 2.3 percent from Mr. Obama’s first year in office.
More than 46 million Americans are living below the federal poverty line, the highest in more than two decades. A record 46 million Americans are on food stamps. The Agriculture Department reports a growing number of Americans are going hungry.
An estimated 3.5 million people are homeless, including 1.5 million children. The Education Department recently estimated that there were more than 1 million homeless students nationwide.
Home foreclosure starts grew this summer by 16 percent, and 2.42 million people were delinquent two months or more on their mortgages.
New business startups are at their lowest level in 30 years. It takes investment capital to start a business, and Mr. Obama has declared war on investors and small businesses. His plan to raise the capital-gains tax rate and the two top income-tax rates would hurt investment, the lifeblood of a growing economy, and small businesses, too.
“More than three years after the recovery began — in name, at least — the economy is still in a giant hole,” The Post’s Mr. Irwin reported Tuesday.
Two years after the 1981-82 recession, the Reagan economy came roaring back with muscular GDP rates as high as 8.5 percent. It just takes a change in policies and a new president who knows how to do it.
Donald Lambro is a syndicated columnist and former chief political correspondent for The Washington Times.
© Copyright 2013 The Washington Times, LLC. Click here for reprint permission.
About the Author
By John R. Bolton
The president fiddles at his domestic altar while the world burns
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