As of now, I am in control here, in the White House

The U.S. Economy: A Man-Made Natural Disaster

I remember a few weeks ago hearing White House press Secretary Josh Earnest mention the strong economy.

Strong economy?

The economy is actually quite weak. Still.

Former Sen. Phil Gramm, R-Texas, an economist, takes a look at the Obama recovery and makes a simple argument: Bad Policy makes for bad economies.

From the piece:

How bad is the Obama recovery? Compared with the average postwar recovery, the economy in the past six years has created 12.1 million fewer jobs and $6,175 less income on average for every man, woman and child in the country . . .  At the present rate of growth in per capita GDP, it will take another 31 years for this recovery to match the per capita income growth already achieved at this point in previous postwar recoveries. When the recession ended, the Federal Reserve projected future real GDP growth would average between 3.8% and 5% in 2011-14 . . . Even though the economy never came close to those projections in 2011-13, the Fed continued to predict a strong recovery, projecting a 2014 growth rate in excess of 4%. Yet the economy underperformed for the sixth year in a row, growing at only 2.4%.

Well that’s the effect. According to Gramm, the causes are numerous, and can be traced to Obama. He has put together one of the most detailed and precise lists I’ve seen of Obama-generated conditions that are dragging the economy down.

  • Marginal tax rates on ordinary income are up 24%, a burden that falls directly on small businesses.
  • Tax rates on capital gains and dividends are up 59%, and the estate-tax rate is up 14%.
  • While tax reform has languished in the U.S., other nations have cut corporate tax rates.
  • The U.S. now has the highest corporate rate in the world and the most punitive treatment of foreign earnings.
  • Federal debt held by the public has doubled, so a return of interest rates to their postwar norms, roughly 5% on a five-year Treasury note, will send the cost of servicing the debt up by $439 billion, almost doubling the current deficit.
  • Large banks, under aggressive interpretation of the 2010 Dodd-Frank financial law, are regulated as if they were public utilities.
  • Across the financial sector the rule of law is in tatters as tens of billions of dollars are extorted from large banks in legal settlements; insurance companies and money managers are subject to regulations set by international bodies; and the Consumer Financial Protection Bureau, formed in 2011, faces few checks, balances or restraints.
  • With ObamaCare the government now effectively controls the health-care market—one seventh of the economy.
  • The administration’s anti-carbon policies hamstring the energy market, distort investment and lower efficiency.
  • During Mr. Obama’s presidency, the number of Americans receiving food stamps has risen by two-thirds and the number of people drawing disability insurance is up more than 20%. Not surprisingly, labor-force participation has plummeted.
  • Crony capitalism and artificially low interest rates have distorted the capital markets, misallocating capital, overpricing assets and underpricing debt.

GDP growth in the fourth quarter of 2014 was 2.2 percent. Growth for the first quarter of 2015, which will be announced next week, is projected to be below one percent.

Now that’s what I call a man-made natural disaster.

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20 Responses to The U.S. Economy: A Man-Made Natural Disaster

  1. the simple fact is that the Republicans, and the Democrats all have a hand in the Recession and why it occurred. And Republicans and Democrats have a hand in why the “recovery” has stalled, even as the wealthiest has gotten wealthier.

    Economic, environmental, and healthcare policies from the President have done everything they can to prevent this Economy from taking off. It’s like adding cement bags to a hot air balloon…everytime the balloon starts to go up, a cement bag is added.

    But Congress, even this new Congress have not been forceful enough to control the President. And they are to be blamed as well.

  2. My youngest opened a business in NYC about 7 years ago, she lived on about 15 cents an hour after paying her staff and bills. Lucky for her, she lived in her shop the first couple of years so she wouldn’t be homeless, or starve. Shep Smith did a profile of her a few years ago:

    http://video.foxnews.com/v/3928601/two-wheel-revolution/?#sp=show-clips

    Flash forward to 2015, she’s thinking of selling the business, though it’s doing well, the more she grosses the more her storefront rent gets hiked and city, state and federal taxes take a bigger bite of her profits and she still can’t afford to move out of her in-law’s home.

    She’s ready to sell and I’m sad. She built that. :(

    • You Denise should be VERY, VERY PROUD of your daughter as I know you are.
      Many small businesses fail at the first attempt.
      Seems to me that she has the grit to make one go.
      Tenacity is the key.
      Desire is the engine.

      Good luck to her !

    • Wow, what a fine young lady you raised, Denise. You must be so proud of the risks she took and the success she has had. I’m sorry she’s thinking of selling, even though she’s been successful. But I can attest, doing your own business is all-consuming, and if others, including the government, are digging too deep into your profits, it’s not worth it. It seems clear to me though that she will succeed at whatever else she does.

    • Ronald Reagan put policies in effect that restored this Country back to where it was before Jimmy Carter.

      The next president has a task ahead of them that entail the same effort, if not more.

      Obama has damaged this Country more than you realize.

  3. Why is no one reporting this? Looking into this? Are we just a bunch of stupid sheep going along with whatever the heck comes out of Washington?

    How do we change this mess before it’s too late?

    Nothing personal against sheep.

  4. What bugs me is the politicians will get up there and say they want to take care of the middle class. Why doesn’t at least one of them say they would take care of businesses so businesses will create jobs for everyone, which includes all classes.

    It is simple to see. Get rid of excess government regulations and lower taxes to begin with.

    • One of my Economics professors — my advisor during my graduate program — was a graduate student of Phil Gramm — and I heard some stories (worry not — Economists here — nothing exciting)… but I did further understand the connection between freedom – REAL freedom and how our government system takes our freedom away.

      Today I ask you to think about this — East Berliners — fenced off from leaving — a failed approach — yet look at our economic system now — trying to hold in the 1% (while demonizing them) — trying to police and extract tax from citizens when policies of FREEDOM would bring capital to this country and keep capital here and turn this economy around in a fast and furious economic recovery. The saddest part to me is that this would be soooooooooo easy if real FREEDOM lovers were involved.

  5. And not a single aspect of the disaster is due to incompetence, though Barry and his boys and girls ARE incompetent at actually running anything they take over/socialize.

    This is all by design, all part of the “fundamental transformation of America”. The US must become much weaker, much poorer, far more vulnerable in order to take her “proper” place in the globalist governing body–the UN–as just another banana republic, collectivist mess…nothing special.