Three days following His Majesty’s Immigration Proclamation and related pronouncements concerning the state of America’s economy, I remain more convinced than ever that experts urgently need to study the 25th Amendment to the U.S. Constitution.
Concerning basic economics, President Obama continually makes former Vice President Dan Quayle look brilliant. This morsel from another man who might consider staying out of the sun on golf courses aptly describes our current stubborn and misguided leader: “What a waste it is to lose one’s mind. Or not to have a mind is being very wasteful. How true that is.”
The current occupant of 1600 Pennsylvania Ave. needs care little about “those who did not vote” and even less concerning foreign citizens who persistently break American immigration and employment laws.
His paramount economic objective is simple — he needs to do what he can to help all American citizens earn more than they spend each year in face of daunting competition from less-expensive foreign labor and from machines that relentlessly grow more powerful and less costly.
This mission dwarfs in importance any other economic matter and, in this area, Barack Obama unquestionably speeds a once-great nation toward complete ruin.
Economic facts that matter most
Other than the truly small number of repetitively successful entrepreneurs and speculators, people who acquire financial security during their lifetimes do so by following one incredibly straightforward practice — they spend less each year than they earn.
Under Mr. Obama’s presidency, most Americans have suffered directly and indirectly, as information published by the Federal Bureau of Labor Statistics in their Consumer Expenditure Surveys makes crystal clear.
In 2008, the last full year before Barack Obama assumed stewardship over American affairs, 120.8 million households earned an average of $61,774 each after taxes. In August 2013 (well after the November 2012 elections), the 2012 survey showed that 124.4 million households earned $63,370 each — a cumulative increase per household, unadjusted for inflation, of just 2.6 percent after four years of supposedly heroic work on our behalf.
Three months ago, the 2013 survey revealed that 125.7 million households earned just $56,352 each in 2013. Even before considering the steadily withering purchasing power of our currency, this is a stunning 11.1 percent under 2012 and 8.9 percent under 2008.
It gets much worse.
In 2008, households where at least one person held a college level degree or higher saved a total of $808 billion, while the remaining 71 percent of households saved $558 billion. In 2012, college households saved $1,108 billion and the other 62 percent saved $379 billion.
Last year was an utter disaster — annual savings of college households dropped 52 percent to $533 billion while all other households, 61 percent of the total, experienced a 66 percent drop in savings to just $128 billion.
Households that borrowed and studied to get ahead as well as households that chose not to acquire skills necessary to flourish in steadily toughening global competition all suffered.
Meanwhile, America’s total debt rose in absolute terms, according to information compiled by the Federal Reserve System.
At year-end 2008, America’s domestic debt was $50.8 trillion or 37 times the total amount that American households added to savings that year ($1.4 trillion). At year-end 2012, our total debt was $52.2 trillion — 35 times the amount all households saved in 2012 ($1.5 trillion). Last year, our total debt reached $53.7 trillion — a stunning 81 times households savings during 2013 ($0.7 trillion).
You do not fix a debt problem by increasing downward pressure upon after-tax incomes. As with “shovel ready jobs,” “stimulus,” and “affordable care,” Mr. Obama’s latest rhetorical concoction will not actually create manifest economic progress inside America’s borders.
So, let legal experts examine the “Presidential Memorandum” signed Friday — nothing Mr. Obama says or does here addresses existential threats that compound under his economically illiterate administration.
False hopes should remain in Las Vegas where they belong.
• Charles Ortel serves as managing director of Newport Value Partners (NewportValue.com), which provides economic research to executives and to investment firms.