The Myth of the Obama Recovery

Depending on how you read the jobs report, you might think we are well on our way to economic recovery.  At least if you read the headlines.  Well, we should be.  In three short years, this President has increased the debt more than any President in the history of our country combined.

What do we have to show for it?

Think about it.  Think of all that we have accomplished with the last $6.3 trillion in debt.  We won two world wars, at various times brought unemployment down to 4.4% (most recently under the economic policies that supposedly got us into this mess), fought five other major wars, four major undeclared conflicts, and assisted in several other wars, gave hundreds of billions back in tax cuts, sent a man to the moon, maintained a shuttle program, bought over half the land in the country, rebuilt after a civil war, implemented civil rights, built socialistic retirement, healthcare and welfare systems, helped produce 5% and higher GDP growth, built every crumbling and non crumbling bridge in the United States today, and created a massive bureaucratic infrastructure covering roads, education, homeland security, and our entire regulatory system.

So what has Obama done with $6.5 trillion in debt?  He has brought 5.7% unemployment down to 8.3%.  Oops, I meant up to 10% and then down to 8.3%.  We have managed to get GDP just over 2% for a fleeting couple quarters.  We did continue two major conflicts which accounts for almost a trillion of Obama’s $6.5 trillion in debt.  But he didn’t do anything to stop the conflicts, and in fact started another one in Libya.

A lot of that money went in to funding failed green energy projects, such as Solyndra, which were owned by Obama’s supporters.  A lot of money went towards bailing out Wall Street and making the United States a shareholder in failed companies like Citigroup, GM and Chrysler.

One of Obama’s large debt contributions was in the form of extended unemployment benefits to make the victims of his economic policies comfortable enough to not complain.  This year when he runs on a platform of how he cut taxes, be assured that no member of the media will ask him about the taxes he has forced states to collect to fund their own broke unemployment compensation funds, and pay interest on federal loans of unemployment funds, all of which has been passed on to business owners of every size.

The amazing thing is that in his term so far, Obama has spent the equivalent of more than one full year of United States private sector GDP.  Nearly half of that has been in the form of debt.  Stop and think about that for a minute.  And yet, with more debt than every other President combined, Obama is ecstatic with an 8.3% unemployment rate?  There is something seriously wrong with this.

But it gets worse.  There is unemployment and real unemployment.  What’s the difference?  The 8.3% represents only people who are still looking for a job.  If you counted the same number of people who were looking for a job in 2007, the unemployment rate would be at 10.3% and that hasn’t changed  since 2009.

Ezra Klein at the Washington Post notes this disturbing trend which seems to show little variance in the unemployment rate when you consider people who have stopped working.  That means that with $6.5 trillion in new debt, more than all other Presidents combined, Obama hasn’t managed to increase job growth, he has just managed to increase the number of discouraged workers who are willing to settle for his extended unemployment welfare program.

In fact, although Obama will be running on the myth of jobs saved and created, in actuality there are 2.4 million fewer people working today than there were when Obama signed the stimulus in 2009. The number of people who have jobs, according to the Bureau of Labor Statistics, is down to 139 million from 141 million in 2009.

For those keeping score, it was 127 million in 2001.  Do the math.

President Obama a one term president?

According to the CNN Poll of Polls, which is an average of the most recent national surveys, 45 percent of Americans approve of how the president is handling his job and 51% disapprove, a short term boost largely attributed to the recent success in Libya. 

It is now 364 days until perhaps the most economically important presidential election in generations both nationally and internationally. The president has already raised more money than all his GOP rivals combined. Obama hopes to raise nearly $1 billion for his 2012 re-election bid. There is no doubt, President Obama has enjoyed considerable success in the war on terror and in his pledges to drawn down American forces in Iraq and Afghanistan which many, believe to be politically motivated, rather than a matter of military decision making.

How would I rate President Obama’s re-election chances? I still see it as very much a 50-50 chance for the following reasons; while people may disapprove of his administration in many areas, President Obama is still personally very popular, especially among minority groups who are expected to have a big influence on the outcome in 2012. He will have considerable funds and the support of the liberal media on his side, which, cannot be under estimated and above all, it is the ability of the GOP to unite behind a credible and strong candidate that will ultimately have the biggest influence on the outcome in 2012. Don’t under estimate President Obama’s campaigning ability and rhetorical skills, he will prove an extremely determined competitor, and if his manages to get people to remember why they liked and voted for him in 2008, it will be difficult for any GOP contender to beat him.

President Obama following his many recent travels appears determined not to concede key swing states like North Carolina, Indiana, Virginia, Florida, Colorado and New Mexico.  A year is an extremely long time in American politics, and things could change the odds in President Obama’s favour.  Economic growth could exceed expectations, and the unemployment rate could start to turn on a downward trajectory restoring some of the much shattered economic confidence in American households. My own personal belief is that the current administration seem incapable of making the fundamental policy shift in curbing spending and lowering taxes, to really deliver a boost to economic growth and this has only been further solidified by Democratic support for the Occupy Wall Street protests of recent weeks, and the attacks on the entrepreneurial spirit which has made America a great nation for the last century.

James Carville the famous and respected Democratic strategist coined the phrase, “It the Economy stupid” when former President Clinton was running against former President Bush Snr. amazingly, President Bush Snr. enjoyed an astounding approval rating of 89% just over a year before the election and went on to lose. In this coming election the phrase for the GOP should be, “It’s Jobs stupid.” A record number of Americans, 49.1 million are poor, based on a new census measure that for the first time takes into account rising medical costs and other expenses. External debt now stands as % of GDP at an incredible 101.1% and unemployment is at 9%, higher then even the biggest sceptic believed it would be following the stimulus plan. Unfortunately, President Obama’s economic team have only created uncertainty surrounding healthcare costs, tax and regulation over the last three years, these three factors alone are the biggest reasons why job growth in American has come to a standstill practically.

A Washington Post/ ABC polling today showed only 38% of American’s approved of President Obama’s handling of the economy against a disapproval rating of 61%. The reality is, if people took out President Obama’s personal appeal and focussed on his job performance and implemented policies during the first two years of his administration, the outcome of next years election would be a foregone conclusion with a GOP landslide. However, this election is going to be unlike any other. Personally, I believe substantively only Mitt Romney or Newt Gingrich really have the experience, credentials and ability to beat President Obama in a head to head with the exception of Ron Paul who may benefit from a failure by the international community to resolve the debt crisis. It is important that the GOP nominee sells the message that they are the person capable of restoring America’s economic prospects and focus on facts.

The strategy to an Obama victory seems set to be played out in the Midwest states where President Obama still enjoys popular support and on portraying an “Under Dog” tag. The Democratic Party machine will unleash the fiercest and most personal attack campaign American electioneering history has witnessed. The president has already tried to use class divide and emotional scare tactics to frighten voters into supporting him, the one fact which cannot escape President Obama is his record.

Don’t believe the “Under Dog” status, President Obama will be the best supported and financed “Under Dog” in political history. The choice for American’s like previous elections, “Are you better now then you were four years ago come November 6, 2012”.

The eventual GOP nominee will need to focus on President Obama’s record, which is partly why, I believe Speaker Gingrich may be the best bet for the GOP nomination due to his factual, precise and eloquent communication skills. It promises to be the mother of all contests that is for sure.

All the World’s a Stage: Debt will not exit Left or Right

President Obama: Upstage or Upstaged?

Bookmark and Share    You know you’re in trouble when Warren Buffet comes out of the woodwork to offer a plan. And, you know you’re in bigger trouble when you kind of agree with him. Buffet’s plan is this: “I could end the deficit in five minutes. You just pass a law that says that any time there’s a deficit of more than three percent of GDP, all sitting members of Congress are ineligible for re-election.” Buffet says he was only half joking, but it may be recorded as one of his more sensible observations.

The reality is that the debt talks are theater pure and simple.

Look at the backdrop: We are in a new presidential election cycle, which complicates matters. Then look at President Obama taking center stage. Maybe a reason why the Leftists are going so negative on Obama here is that even they recognize a guy wanting to keep the lead role, sorry running for election, when they see one.

Entering Stage Left is his most trenchant critic Paul Krugman, writing reviews that he hopes will close this show, but he has difficulty closing a toilet seat at the best of times. He says, “let’s be frank. It’s getting harder and harder to trust Mr. Obama’s motives in the budget fight, given the way his economic rhetoric has veered to the right. In fact, if all you did was listen to his speeches, you might conclude that he basically shares the GOP’s diagnosis of what ails our economy and what should be done to fix it. And maybe that’s not a false impression; maybe it’s the simple truth.” Yes, Mr. Krugman it is the simple truth.

However, theater is about fantasy so let’s move to the next Scene.

President Obama says “Government has to start living within its means, just like families do. We have to cut the spending we can’t afford so we can put the economy on sounder footing, and give our businesses the confidence they need to grow and create jobs.” Krugman says this is conservative ideology, since government should not budget like families, and argues businesses aren’t holding back because they lack confidence in government policies; they’re holding back because they don’t have enough customers. There’s a reason for that Mr. Krugman at a time when the economy is actually growing, it’s called confidence and politicians are knocking the stuffing out of the economy in a staged fight.

So let’s go to the next Act, and the dramatic scene featuring the President addressing the audience directly.

Obama says the debt ceiling should not “be used as a gun against the heads” of Americans to retain breaks for corporate jet owners or oil and gas companies, using some of his most direct dialog to date. He wants to reduce the deficit, in part, through new tax revenue raised by closing loopholes and tax subsidies. Beneath the rhetoric to the audience, however, is a soliloquy to the Democrats of good old fashioned class warfare.

So, entering stage Right, the Republicans oppose measures that raise taxes, demanding steep reductions in the US budget deficit as the price of a debt increase. Leftist rag The Nation (I refer you to the earlier point of Krugman closing the toilet seat), says, “Republicans have been negotiating in bad faith, unwilling to compromise even an inch on their extremist and absolutist positions. Some are no longer willing to come to the table at all.” Leftists sing a chorus that the Republican Party is threatening to default on the nation’s debt and this will sabotage the global economy on the basis of narrow ideological goals. A new verse is being added as you read this, namely that the President should invoke Section 4 of the 14th Amendment, which says that “the validity of the public debt of the United States … shall not be questioned.”

Democrats and Republicans remain “far apart on a wide range of issues,” Obama, said wringing his hands as he adjusted his teleprompter prop. “Everyone acknowledged that we have to get this done before the hard deadline of Aug. 2 to make sure America does not default for the first time on its obligations. And everybody acknowledged that there’s going to be pain involved politically on all sides.”

Meanwhile, the Opening Night of this show, August 2, is fast approaching and the cast are still fluffing their lines over raising the $14.3 trillion debt ceiling.

At Thursday’s rehearsal, all the lead cast turned up and “All the leaders came here in a spirit of compromise and of wanting to solve problems on behalf of the American people.” So, it will be alright on the night! President Obama hopes Sunday’s dress rehearsal will pave the way for the “hard bargaining” necessary for a deal, because “Everybody acknowledges that there’s going to be pain involved politically on all sides,” he said. And, the chorus joined in with a handful of officials on both sides of the aisle indicating they are ready to give ground.

With all this improvisation, let’s just remind ourselves of the script: •Public debt was $14.3 trillion on 31 May, up from $10.6 trillion when Obama took office in January 2009 •Congress has voted to raise the US debt limit 10 times since 2001 •The largest expenditures of the projected $135 Billion deficit include: $80.9 Billion on Social Security and Medicare/Medicaid, $72.9 Billion on government agency expenses, $31.7 Billion on Defense, and $29.0 Billion on Interest on Treasury securities.

In the show Chorus Line, the opening song ends with the lines:

Who am I anyway?

 Am I my resume?

 That is a picture of a person I don’t know.

 What does he want from me?

What should I try to be?

So many faces all around, and here we go.

 I need this job, oh God, I need this show.

Yeah, the show must go on Mr. President…it’s time for your close up.

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