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Tag Archives: economy

The Obama Economy and the Fed’s New Pessimism

Remember all that talk over the previous months about steady interest rate increases by the Fed? Well, forget about it. The Fed made clear this week that it understands that the Obama economy is not going anywhere and, therefore, neither are rates.

President Obama actually thinks he’s doing a great job with the economy. The Federal Reserve knows better.

Scary. Because one of the least-remarked features of the barely growing economy is that it is occurring in an environment of basically zero interest rates. Investors have nearly free money, and Obama still can’t make the economy work. The Fed is being as stimulative as it can without actually paying people to take money. And if the ISIS terrorists Obama has permitted to spawn inflict an economically disastrous strike or something else spurs an economic meltdown, there are very few tools left to deal with it.


Growth the last two quarters has averaged about one percent. The Federal Open Market Committee is now predicting just two percent growth for the year, seven years into the Obama “recovery.” And the FOMC thinks things won’t get any better next year either.

The Wall Street Journal notes:

The Keynesian economists who have run U.S. economic policy since 2008 are clearly stumped. First they said $800 billion in fiscal stimulus would stir a return to prosperity, then they said that monetary stimulus would do the trick. Now they blame their failure on “secular stagnation” and Republicans in Congress whose pro-growth proposals have been blocked at every turn by Senate Democrats and President Obama . . .

The the reality is that this is the (economist Paul) Krugman-Obama economy. The White House and Fed have spent eight years pursuing the City University economist’s agenda of raising taxes, increasing regulation in every possible section of the private economy, and trying any new monetary experiment.

Seven years after the recession ended, we know the score: The slowest expansion in decades, falling labor participation rates last seen in the 1970s, mediocre business investment, a declining pace of business start-ups, disappointing wage growth, rising inequality, and an outbreak of angry populism on the left and right.

President Obama has regulated, taxed, and spent this economy to the precipice of disaster. Hillary Clinton will be surrounded by the same economic advisors. She will do more of the same.

Video || When Exactly Did Our Kids Become Communists?

This is from Fox News’ Red Eye Last night. Host Tom Shillue quotes a poll of young adults between the ages of 18 and 29 that finds 51 percent don’t support capitalism, 42 percent do, and 33 percent say they support Socialism.

Respondents said capitalism is “unfair.” Well, as Shillue notes, they’re right, and that’s the point of it.

So now, we’re getting the results of the “Everybody gets a trophy” philosophy kids have been growing up with. The notions of “fairness” and “oppression” and “victims” are drummed into our kids’ skulls from an early age by the public schools system and then universities, all of which are the domain of the Left. Things that used to be par for the course, like absolute values denoting right from wrong and heroism on the battlefield and elsewhere are minimized or ignored.

You can see it in operation at the White House, where the man who was president as these kids came into adulthood, Barack Obama, thinks pay should be based on what people “deserve” and not on what their value is to an organization.

“We’ve got to keep making sure hard work is rewarded,” Obama wrote in the Huffington Post last year. “Right now, too many Americans are working long days for less pay than they deserve.”

Obama’s worldview is essentially that of the socialist – to each according to their needs, from each according to their ability to pony up. Such notions must be enforced by the government. And government interference, regulation, and taxation is what is wrecking the economy and causing widespread misery in this nation.

Obama Whines About Lack of “Credit” for Economy as it Tanks

Okay, Mr. President. At White House Dossier, you get all the credit.

We’re basically within an accounting error of a recession, and President Obama is front and center on the New York Times website Thursday grumbling that he is not getting credit for fixing the economy. The economy, in the first quarter of 2016, grew at an annualized rate of 0.5 percent, following a 1.4 percent increase the last quarter of 2015.

The Wall Street Journal notes, “U.S. corporate profits are set to decline for the third straight quarter, the longest and broadest slide in earnings since the financial crisis.”

Yes, Mr. President, you fixed us. You fixed us good.

Obama rainbow

Obama, of course, thinks the reason he is not getting “traction” for his excellent stewardship of the economy is the same as the reason for all of his problems: Republicans and their politicization of everything.

From the Times piece:

There are, of course, many reasons so few Americans seem to be celebrating. “How people feel about the economy,” Obama told me, giving one part of his own theory, is influenced by “what they hear.” He went on: “And if you have a political party — in this case, the Republicans — that denies any progress and is constantly channeling to their base, which is sizable, say, 40 percent of the population, that things are terrible all the time, then people will start absorbing that.”

Alas, by any conceivable measure – or by any relevant measure – things are terrible. Obama has the worst economic growth record of any post-war president – ALL OF THEM – with an average GDP increase each quarter of around 1.7 percent. More people are out of the workforce than at any time in the last 40 years, helping account for the low unemployment rate, since those not looking for work aren’t counted as unemployed. Median income hasn’t risen, and the poverty rate is at the same level it was before Lyndon Johnson’s Great Society socialism kicked in.

And yet Obama and the New York Times collaborate on a serious article about why he isn’t getting enough credit. Go figure.

OECD: U.S. Economic Growth to Slow Again

One of the enduring myths of the past few years, trumpeted by the White House and accepted by much of the press, is that President Obama has led the economy back to a state of strong, or even solid, growth. Despite annual evidence to the contrary, the myth persists.

If you climb Mount Olympus on your Greek vacation this summer and find Zues hanging out with Hera, let me know. Maybe they have the strong economy up there with them and are willing to send it down.

The Organization for Economic Cooperation and Development is just the latest to notice that the emperor’s economic advisors have no clothes. According to the Wall Street Journal:

OECD’s gauge of future activity suggests that following a return to expansion in the second quarter, the U.S. economy is unlikely to grow as rapidly as it did last year. The leading indicator for the U.S. has fallen in each month this year, and now stands at 99.5. A level below 100.0, where it started the year, signals a slowdown, while a level above signals an acceleration.

Economic growth since 2010, during the “recovery,” has each year been between 1.6 and 2.5 percent in the United States, which, to use a term employed by PhD-level economists I know, really sucks. This, along with growing federal government offers of free stuff, explains why the labor force participation rate is the lowest it has been in 40 years and why income growth has stagnated.

In a little-noticed development last month – the New York Times, for example, relegated it to the B Section – the Federal Reserve actually LOWERED its growth forecast for the year, pegging it to between 1.8 and 2 percent growth. In other words, a little worse than usual for the Obama era. It had been forecasting growth in the range of 2.3-2.7 percent.

A recent article by former Bush economic advisor Edward Lazear helps debunk the other myth peddled by the White House, that this recession is special and harder to come back from. Lazear found that “states that suffered the worst employment shocks in the 2007-09 recession had the most rapid postrecession employment growth.”

Right. So the worse the recession was for them, the better they recovered. How does that square with White House claims that we were dug so far in nationally it was impossible to come out strongly? Lazier cites another study that found “steep recoveries after financial crises.”

Maybe you like Obamacare. Maybe you liked the stimulus. Maybe you like the growth in government. Those are opinions, and that’s fine.

But it is not an opinion that economic growth is strong. That, rather, is mythology written by the myth-makers in the West Wing.

And the Greek tragedy is being lived out by the rest of us.

Economy Contracts; White House: Everything’s Still Cool

The White House today downplayed news that the economy contracted 0.7 percent during the first quarter of the year, arguing “the most stable components of GDP” were growing quite nicely.

The new number was a downward revision of the previous estimate that GDP had increased by a mere 0.2 percent.

From White House Council of Economic Advisor Chairman Jason Furman:

Today’s downward revision to GDP growth was entirely accounted for by revisions to inventory investment and net exports, with other changes being small and neutral on balance. The first-quarter slowdown was the result of harsh winter weather, tepid foreign demand, and consumers saving the windfall from lower oil prices. The combination of personal consumption and fixed investment, the most stable components of GDP, has grown 3.4 percent over the past four quarters. This solid long-term economic trend complements the robust pace of job growth and unemployment reduction over the last year.

Well, all of this is technically true. Furman is too good an economist to start making stuff up, though at this point it must be tempting. But here’s the issue: A strong economy takes hits and keeps on growing, even if at a slow pace for a quarter. Good things make up for the bad. That’s not what’s happening here.

Whatever the excuse making, the economy CONTRACTED. Something’s wrong. Moreover, growth in the fourth quarter of 2014 was a dismal 2.2 percent, and growth in the current quarter – the second of 2015 – is expected to come in at about two percent as well.

We’re at six and a half years. Folks, this is the Obama economy. Annual growth rates averaging a little bit above two percent, which is pathetic by historic standards. And years after the recession ended.

Mr. Furman can go about plucking the strands of good news from his data charts all he wants. But the bottom line is clear.

Despite massive debt-financed government spending and near-zero interest rates, the economy is in crummy shape. And it’s not Bush’s fault.

U.S. Economy Stalls

If anyone has any questions about the decrepitude of the Obama economy and the “recovery” that never seems to get to “fully recovered,” it was answered today as the Commerce Department announced that GDP had expanded by 0.2 percent during the first three months of the year – that is, growth basically stopped.

This comes off a lousy 2.2 percent increase in the fourth quarter of last year, suggesting the slowdown is endemic and not due to the bad winter – i.e. increased cooling due to global warming – or the alignment of the planets, George W. Bush, the Tea Party, or the Nixon administration.

According to the Wall Street Journal:

The U.S. economy slowed sharply at the start of the year as businesses slashed investment, exports tumbled and consumers showed signs of caution, marking a return to the uneven growth that has been a hallmark of the nearly six-year economic expansion.

Economists surveyed by The Wall Street Journal had expected growth of 1% in the first three months of this year.

The first-quarter figures repeat a common pattern in recent years: one or two strong readings followed by a big slowdown . . . And while most economists expect another second-quarter rebound, some forecasts are muted. Ahead of Wednesday’s GDP release, for example, J.P. Morgan Chase was predicting only a 2.5% pace in the second quarter.

Wednesday’s report showed consumer spending, which accounts for more than two-thirds of economic output, decelerated to a 1.9% pace in the first quarter, down from 4.4% growth in the fourth quarter.

Households last year were buoyed by strong job growth and tumbling gasoline prices. But fuel costs have crept up since the start of the year and the labor market appeared to downshift in March, damping confidence.

Oh wait a second. The White House did find someone else to blame. FOREIGNERS.

“Economic growth in the first quarter was restrained by factors including, tepid foreign demand and harsh winter weather,” wrote White House Council of Economic Advisors Chairman Jason Furman. “This report underscores that the U.S. economy is directly affected by the global economy.”

Unfortunately, Furman neglected to mention the actual, primary cause of the slow economic growth.

If you are causing an economic slowdown, please stand up.

Obama stands

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.

WH Doesn’t Deny Small Business Growth “Stalled Out”

White House Press Secretary Josh Earnest Tuesday was unable to launch a serious counterargument to Hillary Clinton’s claim that small business creation in the United States has “stalled out” under President Obama. Notice how he tried to dodge the question and, when ABC news reporter Jonathan Karl wouldn’t let him get away, went to the… Continue Reading

More Obama-Style Economic Growth

Ahh, the Summer of Recovery. I remember it like it was yesterday. It was 2009, and we danced, we sang, and we toasted the stimulus, which was going to pull us off the sickbed and out of the doldrums. And then, the summer went by, and there was no recovery. For years, we waited. Occasionally,… Continue Reading

Economy Adds 321,000 Jobs in November

The U.S. economy added 321,000 jobs in November, a robust pace that makes the number of new jobs created this year the highest since 1999, the Labor Department reported this morning. The numbers for the last two months were also revised upward, showing employers added 243,000 in October instead of the 214,000 previously stated and 271,000… Continue Reading