Economic Numbers Show Obama Hasn’t Earned Re-Election
September 7, 2012 20 Comments
Last night Obama barely brought up the economy, at least not in any specific terms. He likely knew about the economic numbers released today, which were not very good. Unemployment dropped to 8.1%. While you think that might sound good, only 96,000 jobs were created while 368,000 people left the workforce. In other words, nearly four times the number of people left the workforce as were added to it. That’s why the unemployment rate went down, it only tracks people actually in the workforce. If someone has given up or otherwise doesn’t want to or cannot work, they aren’t counted. That’s how the number dropped, it’s nothing to get excited about.
Nearly 89 million adult Americans are not working. Less than 70% of adult men are working, the lowest since 1948. There are 261,000 fewer American employed today than when Obama took office, there are 822,000 fewer Americans with permanent jobs. June and July’s job count were both cut by around 20,000 jobs. Black unemployment stands at 17% while young black are unemployed at a staggering 47.2% rate. Hispanic unemployment is 11.1%, young Hispanics have a 37.4% rate.
This is an economic report that is simply unacceptable three years after an economic recovery supposedly began. We have economic growth in the last quarter under 2%, we’re heading to another quarter with under 2% growth. Unemployment is down but only because the government has removed people from the workforce. There are fewer people in the workforce today than when Barack Obama took the oath of office despite the fact that population growth sees us adding 150,000 people every month. We lost nearly 9 million jobs during the recession, only 46% have been recovered in a three year recession and we haven’t even begun to chip at the growth in working age adults.
The numbers released today don’t suggest things are getting gradually better. They don’t indicate that prosperity is right around the corner or that President Obama’s policies really are working but just need another year or two to really get going. They indicate a stagnant economy that isn’t growing in any measurable way. We’re seeing flat unemployment and more people giving up and leaving the workforce. We’re seeing an economy that has 90 million adults simply not working and thus dependent on someone else. We need more jobs, it’s becoming painfully obvious that Barack Obama’s policies aren’t creating conditions for job growth.
Yet the White House claims this report is good, that it somehow proves we’re on an upswing. What else are they going to say? Their position is pure fantasy and they know it. The economy isn’t getting better, it’s getting worse compared to last year. We face taxmageddon on January 1st because Obama refuses to extend tax cuts, even though both he and Bill Clinton said we shouldn’t raise taxes during a recession. Most Americans think this is a recession, it sure is for our pocketbooks. During the Obama years household income had dropped by $4,000. We’re paying $1,000 more per year at the pump since Obama took office, inflation has caused food prices to rise substantially. So not only are we earning less money, we’re paying more for basic goods.
We deserve better than this. Obama presented no new ideas last night. He has no plan for the next four years, certainly he has no plan that’s any different than the last four years. Unfortunately his plans have failed. We aren’t better off than we were four years ago, the numbers play that out. Mitt Romney isn’t going to be the great savior of the American economy. But you can’t tell me Romney can’t do better than Obama. Like it or not, Obama hasn’t earned another four years based on economic news like today’s. It’s time to give someone else a shot and if he doesn’t do a good job then we can get rid of him in 2016. But at this point, Obama simply hasn’t earned re-election.
About Steven
The Democrats are grasping for any news they can spin as being good. That’s why this jobs report is getting so dizzy, from the amount of spin they are applying. To put it bluntly, they have nothing else to run on.
And yet Obama is the odds on favorite to win.
In January of 2009, Obama’s first month in office, the country lost 580,000 net jobs. Last month the country gained 96,000. This is not progress?
I agree that the numbers do not indicate that prosperity is right around the corner, but to say Obama’s policies are not working is hollow rhetoric. I rarely hear anyone state which policies are not working and that is because there are none to cite. Whether you credit poor leadership or Republican obstruction (I favor the latter), there are no “Obama policies” on which to blame the anemic recovery. Some might try to point to Obamacare, but that is over-reaching to be kind.
The President did propose a jobs act which would have created jobs–albeit government ones–but it was blocked by a Republican controlled congress. Maybe this is the Obama policy that isn’t working?
There are several Obama policies that have limited job growth. Obamacare has added costs and taxes for businesses. Around 70% of people work for small businesses. If a small business hits 50 employees they’re directly affected by Obamacare. Thus there is no incentive to hire beyond 50 employees. For companies already over 50 employees, there is no incentive to hire more because Obamacare places such a financial burden upon businesses. The uncertainty surrounding taxes is another problem, since Obama refused to do anything more than pass a temporary extension of the current tax rates back in Dec. 2010. We can go through dozens of EPA regulations which are costing us jobs. We can talk about Obama’s support for Fed quantitative easing which hasn’t helped matters at all. We could talk about Obama’s energy policy, which seeks to destroy coal and oil in favor of bogus green energy. There’s a lot we can point to and if you read this blog often enough you’ll see we’ve discussed all of these issues before.
This is the worst economic recovery in the postwar period. Economic growth over the last three years totals 6.5%. The average of all other three year economic recoveries has been 14%. We have a net gain of 300,000 jobs since Obama took office based on the number of people employed. (CNN wrote about it last week) We need 150,000 jobs per month just to keep up with population growth. Anything less is a net loss. So color me unimpressed with 96.000 jobs estimated to have been created last month.
Thanks for the substantive response.
I recently completed a course on health care policy offered through the University of Penn and Coursera. The course was taught by one of the architects of the Affordable Care Act, Dr. Ezikiel Emanuel (brother of Rahm). In the course he proves that, because of the tax credit for health care dollars, it is not a financial burden at all to hire workers. By offering healthcare as part of a compensation package, it is actually a financial benefit to small businesses. The course and all the lectures are still available for free through coursera. I would recommend checking it out. If you have a source for me which makes a solid, detailed, and mathematically accurate argument to the contrary, I would gladly check it out.
https://www.coursera.org/course/healthpolicy
I wouldn’t attribute tax uncertainty to a particular Obama policy, but point taken. I would agree that it was his responsibility to come to a better agreement with congress.
As for the EPA regulations, they can create jobs just as well as they can kill them, so that point is moot in my opinion–not to mention the fact that the regulations save lives and preserve what’s left of our country for future generations. See the following for how regulations create jobs:
http://www.businessweek.com/magazine/regulations-create-jobs-too-02092012.html
The same argument goes for green energy. It creates jobs. Just look at the initiatives that governors (both Republican and Democrat) are taking in their respective states. These governors know what is best for job growth in their states and nearly all of them are pursuing alternative energy as economic engines.
Can’t speak to Fed interventions. Too complicated for me to understand. In fact, I don’t think anyone could legitimately claim to understand the complex effects of the Fed’s actions on the American economy.
I am not impressed with 96,000 jobs last month either. But I wouldn’t trade economic places with January 2009. We are better off now–even if better off means not spiraling toward a depression.
I wouldn’t be so quick to buy into a partisan presentation of Obamacare. The CBO has suggested it will cost businesses, there are plenty of businesses who seem to think it will cost them a fortune. Even if the businesses are wrong it doesn’t change the fact that they aren’t hiring because of Obamacare.
The EPA has never created a job. They have on the other hand cost people jobs with costly regulations. The whole green energy thing is a big scam. Green energy costs more to produce and there is a limited market for it. There are countless examples of government expenditures in green energy costing hundreds of thousands or millions per job created. It would be cheaper just to cut those people $50,000 checks. Especially when their companies go bankrupt anyway.
January 2009 was never going to last. We were not on the brink of a depression, we’ve never been on the brink of a second depression. There are natural up and down cycles in the free market, this one was more down than others largely because of government action. (it was government that helped create the subprime mortgage market) The issue when Obama took office wasn’t whether he could avoid a depression, that was never going to be a problem. The issue was how would he create conditions for a quick and robust recovery. It was the same thing when Reagan took office in 1980. Obama hasn’t created conditions for a quick and robust recovery. He’s prolonged the recovery to the point that it has become stagnant. At this point 2011, which was a generally rotten year, is shaping up to be better than 2012. That’s not good and it suggests there’s something wrong with what Obama is doing.
“…they aren’t hiring because of Obamacare.” Bah. Show me a single substantive survey saying Obamacare is a driver of a lack of hiring. You can’t, because they don’t exist. What is preventing hiring? A lack of customers. See for instance: http://www.dailyfinance.com/2012/05/23/why-arent-companies-hiring-/.
http://www.heritage.org/research/reports/2011/07/economic-recovery-stalled-after-obamacare-passed
Is it really so shocking that small businesses with 49 employees would not want to hire a 50th employee because of the massive costs placed on 50 employee businesses thanks to Obamacare? Is it really so shocking that businesses with more than 50 employees would not want to hire additional employees because they’re going to be stuck paying Obamacare taxes and costs that they aren’t paying now for the employees they already have? Of course Obamacare is hurting the jobs market. Even if only 20% of businesses are taking the cost of Obamacare seriously, it has a serious effect on the jobs market.
So, I clicked through and read the survey (cite 11) from the US Chamber of Commerce (I’ll leave aside the potential bias of the source) and found it interesting. What strikes me most is that the health care bill is subsumed by ‘economic uncertainty’ and ‘lack of sales’ (slide 8). This, to me, substantiates my very point – demand (and uncertainty about demand) are the biggest drivers.
I’ll certainly stipulate that there are some businesses out there that are particularly sensitive to Obamacare – it is a big piece of legislation that is going to take time to digest – but I contend (and the survey supports) that if those businesses are turning away customers they could have served if they had another body or two, they are hiring. Sales lost to a lack of capacity are unbelievably expensive (i.e. current sales plus present value of all anticipated future sales to that customer), you miss out on capturing a new customer/client as a reference, you grow your market share, etc. These all dominate worry about healthcare costs.
I never suggested that Obamacare was per se a #1 concern of businesses. It’s part of an overall problem of uncertainty created by the Obama administration. There is tax uncertainty, regulatory uncertanty and Obamacare plays a big role in creating an uncertain environment for business.
I acknowledge that Emanual’s presentation of Obamacare is partisan, but I still put more stock in it than anything that comes out of the most dysfunctional congress in American history.
The CBO is supposedly non-partisan. I wouldn’t call the current Congress the most dysfunctional in history. It’s a fairly typical split Congress with the House passing a lot of stuff and the Senate doing nothing. We’ve had this before, we’ll have it again.
“The CBO is supposedly non-partisan.” Exactly. And the CBO says Obamacare is a net deficit reducer. Period.
The CBO does not say that. They have revised their outlook on Obamacare nearly a dozen times since it was passed, each time they show it costing more. The tax increases are more or less set in stone. But the cost keeps going up. It’s a 2,000 page bill that will ultimately have 50,000 pages or more of costly regulations. Those regulations never reduce cost, they always increase it. What you will see is that like Medicare in the 60′s, Obamacare will do nothing other than rise in price.
As of July 24, the CBO says that repeal of Obamacare would “cause a net increase in federal budget deficits of $109 billion over the 2013–2022 period”. http://www.cbo.gov/publication/43471
Based on the non-partisan CBO, Obamacare is deficit reducer. No two ways about it. If you want to go off and introduce your own gobbledygook that gets you to the conclusion you want, you are certainly free to do so. But at least acknowledge that you are asserting you know the law itself and macroeconomics better than the CBO.
Repeal says nothing of what Obamacare will cost. Mind you the CBO has to operate based on what a bill does. Obamacare spends the first few years taxing while providing no benefits, then it does both. Thus repealing Obamacare strips away 3-4 years of taxes for which no benefits are provided, creating the so called increase in the budget deficit of which you speak. It’s a sham savings.
Right, they have to operate on what a bill does – in this case Obamacare reduces the deficit. Follow the link and then read the pdf linked in the upper left – Full Text Document. Look on page 4. Black and white and year by year. The bill is in full effect in 2014, so drop 2013 (the last year of your ‘sham savings’) and you still see repeal increases the deficit out through 2022. Repeal does help in 2017-2018, but net for the 10 years, things are better with Obamacare.
The point though is that Obamacare is being paid for by 4 years of taxes that didn’t get paid out as benefits. That means Obamacare isn’t a net positive for the budget, it’s likely a net negative. The CBO and your argument either way assumes costs are as the government says they’ll be, which we know from experience they won’t be. The government always underestimates cost. The Rx drug bill, Medicare etc. There are few if any government programs that cost as little as the government says they will. But even if we assume their numbers are accurate for a decade from now, the fact is that Obamacare is being paid off with 4 years of taxes in which no benefits were paid.
Look, the CBO analysis is for 2013 forward – yes, there is one year (2013) where there are little costs – but it doesn’t outweigh the forecasted benefits. Pre-2012 doesn’t have a material effect on the numbers for the next decade.
Of course the forecasts may be wrong. Of course things maybe under (or over stated). The future is, admittedly, hard to predicts. The point is that the CBO analysis is, as you said, the most non-partisan effort to understand what is going to happen as a result of the bill. At least acknowledge that their conclusion is inconsistent with yours because you are introducing your own bias against government ever doing anything.
They’ve been collecting Obamacare taxes, save the individual mandate tax, since 2010. I don’t put a whole lot of stock in anything the CBO predicts beyond next year, which is why I highly question their analysis for a decade down the road. These guys are notoriously bad at predicting. Government was wrong by 900% about the cost of Medicare, they were wrong by 100% about the cost of Bush’s Rx drug plan. It is foolish to believe their numbers for 10 years down the line.
Obamacare doesn’t tax businesses enough nor does it tax individuals enough in the first few years to offset its costs. It doesn’t add a single person to the ranks of the insured. In fact, because it starts out taxing businesses and individuals below the cost of a health plan it’s highly likely people will lose their health insurance. If that happens, the CBO hasn’t accounted for that and it would have a substantial impact on the cost of Obamacare. If 5% of employers ditched health insurance and chose to pay the Obamacare tax instead the cost for Obamacare would rise dramatically. But of course the CBO doesn’t account for that, it only plugs in current conditions and assumes they remain constant. They don’t take into account that government is creating an incentive for employers to cut health benefits.