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