When millions of voters went to the polls in November to narrowly re-elect Barack Obama, the economy was rapidly shrinking toward recessionary levels.
In the last three months of 2012, the gross domestic product — the measurement of everything America produces — fell to an annualized rate of 0.1 percent, the Commerce Department reported Wednesday. This means the economy grew at a weak 2.2 percent rate for the entire year, little better than its feeble 1.8 percent growth rate the year before.
The Wall Street Journal, never mincing words, said, “U.S. economic momentum screeched to a halt.”
Apparently, millions of voters didn’t know it or chose to ignore the handwriting on the wall that was there for all to see. In his campaign, President Obama insisted that the economy was “moving forward,” that “we’re making progress,” and that the nation’s economy was in recovery. His top advisers repeated the claim, as did his cheerleaders in the news media.
Millions of voters believed him. After all, there were few stories on the network nightly news shows about the nation’s still severely high unemployment. Newspapers often referred to “the recovery,” played up every downward tick in the jobless rate, even when the decline was largely because of long-discouraged job seekers dropping out of the labor force. More than 12 million Americans were officially out of work, and more than half of the jobs being created were low-wage ones or only part-time.
Numerous business and independent economists were warning at the time that the Obama economy was slowing and were rapidly revising their fourth-quarter growth rates to little more than 1 percent. Their estimates, however, apparently fell on deaf ears.
Still, the Washington news media continued to cover for Mr. Obama, whose four-year “economic recovery” record is the worst since the Great Depression.
The day before Wednesday’s bleak report that the once-mighty American economy was no longer growing, The Washington Post ran a story grudgingly acknowledging that the economy had “slowed” but was still in “a solid recovery.”
Twenty-four hours later, in its lead, front-page story on the government’s dreary GDP numbers, the newspaper retreated a bit, saying it now looks like “a modest recovery.”
Excuse me? The economy is creating a relatively small number of jobs each month (only 155,000 in December), nowhere near the 358,000 a month needed to pound the unemployment rate down to 6 percent.
Declining U.S. exports plunged by $27 billion, or nearly 6 percent in the last quarter. The richest economy in the world is selling less abroad for a number of reasons, but the biggest obstacle is Mr. Obama’s job-killing resistance to new trade-expansion agreements.
Businesses, too, were slashing inventories by $40 billion amid growing signs of a precipitous slowdown, adding new downward pressure on future orders that were reflected in declining fourth-quarter final sales.
Capital spending was already falling in the third quarter, the first decline in more than three years.
Let’s not forget that as Mr. Obama enters his fifth year in office, many states are still suffering from recession-leaning unemployment levels: California, the most populous state in the country, 9.8 percent; Florida, 8 percent; Georgia, 8.6 percent; Illinois, 8.7 percent; Nevada, 10.2 percent; North Carolina, 9.2 percent; South Carolina, 8.4 percent. Does this sound like “a solid recovery”?
People who are unemployed or underemployed mean less consumer spending and lower revenues that drive up federal budget deficits. That’s not going to change anytime soon.