The real Obama economic policy record
Eric Golub is a politically conservative Jewish blogger,...
CANTON, Ohio, October 2, 2012 — The first presidential debate is almost upon us. The debate will focus only on domestic policy. The very respected Jim Lehrer will be the moderator, and the debate will focus only on domestic policy.
President Obama should be judged only on his record, not how people personally regard him. Several days ago Obama’s foreign policy was being scrutinized. Today his economic policies are being looked at, and we have another day to think about his non-economic domestic policies before he gets to defend them on in the debate. The task is easy: His economic record is available for all to see.
Saved us from a great depression: This is a cliche. What actual policies were enacted? Drastic steps were already taken before President Obama took office. President George W. Bush and Treasury Secretary Hank Paulson created the Troubled Asset Relief Program (TARP). Many Americans (including me) were against the bailouts, but there is no denying that the toxic assets were purchased by the government in 2008, before Mr. Obama was sworn in. People can debate whether TARP worked or the economy would have stabilized anyway without it. One cannot say Obama played any role in implementing it.
The stimulus: This was Obama’s policy in 2009, and his alone. It did not work. The purpose of the stimulus was to create jobs, and this did not happen. Obama’s supporters say that it was too small. The real problem was that the Keynesian stimulus approach failed in the 1930s and the 1970s, and has failed again. The supply-side approach worked in the 1960s, 1980s, and 2000s. The stimulus was counter to what works.
The worst economy since the Great Depression: This is a cliche, and it is disputed. Some say the conditions in the 1970s and early 1980s were worse. However, the sharper the drop, the sharper the bounce back should be. This has always been the case. The Great Depression was followed by strong growth. The stagflation years under Jimmy Carter were followed by rapid growth under Ronald Reagan. The recessions of 1992 and 2000 were followed by rapid growth. While the depth of the crash can be debated, what is not in dispute is that this is the most anemic recovery this century. The average down period is months. It has been four bad years under Obama.
Jobs: Obama supporters claim 4.6 million new jobs. This is not a truthful number. Obama discounts jobs that were lost in the first six months of his term. He then starts from the low point of July 2009. This is cherry-picking the data, when the results of his entire term are less favorable.
Job growth: Obama supporters start by saying that the economy was losing 750,000 jobs per month under George W. Bush, and that Obama prevented this from continuing. This is false. Had the downward pace continued there would have been 0 jobs and 100 percent unemployment. Even Enron advisor Paul Krugman cannot pretend this would have happened. Mr. Obama did not invent the resilience of the U.S. Economy. As for his other claims, 40 months of job growth is bragged about. Job growth is defined as anything above 0. Growth has been mired at 1 percent, which is disastrous for a recovery. Obama’s job growth record doesn’t even create enough jobs to match the growth of our population. If people hadn’t been dropping out of the work force in droves, we’d have seen unemployment rates rising constantly over the last four years and well into the double digits by now. We are suffering the way Japan has for over a decade. Anything under 3 percent growth is failure and 4 percent growth brings prosperity. Keynesian economics and excessive regulations stifle growth. That is Obama’s path.
Jobs saved or created: This is a fictional metric that never existed before Obama took office. There is no way to calculate how or what saves a job. It is impossible to prove, and therefore lacks credibility as a meaningful measure. What jobs were actually saved?
Saved the American auto industry: This is not true. Money was given to General Motors at the expense of competitors. The method used to restructure the company would have been illegal had it been done by a private entity and not a president. Bond holders lost everything while the unions were made practically whole. Mr. Obama saved the United Autoworkers Union, not the company. Government Motors still has taxpayers on the hook for billions of dollars as the company is worth far less than it was when Obama nationalized it. The company may go back into bankruptcy again. The union costs still have GM lagging while foreign competitors with lower labor costs thrive.
Inflation: Obama supporters claim inflation is low, but this is also not true. Food and fuel prices have been removed from the inflation calculation. Both food and fuel prices are skyrocketing. Gasoline prices were under $2 per gallon when he took office, and have doubled on his watch.
America’s credit rating: Like low gas prices, Obama “inherited” a AAA credit rating from his predecessor. Failure to rein in government spending caused Standard and Poors to downgrade America’s credit rating for the first time in our history. Obama supporters blamed Standard and Poors, since they failed to warn about the 2008 crash. The response is that they learned from that debacle and are now raising standards. Blaming the messenger is not the answer. Dealing with the problem is.
The stock market: Wall Street is doing well, but that is not always an accurate gauge of economic health. The market was doing well in 1992 under President George Herbert Walker Bush, but the overall economy lagged behind. Ben Bernanke has turned on the printing presses with Quantitative Easing III (QE3). This is propping up the stock market. Companies are not growing. They are cutting costs, and there is not much left to cut.
Unemployment: Unemployment has come down from over 10 percent, but has been over 8 percent for the entire Obama term. This does not count “underemployment,” people taking massive pay cuts to work at jobs below their skill level. Obama supporters claim unemployment is coming down, but again this is not true. Unemployment numbers only count people looking for work. They do not count people who have given up looking out of despair. They simply fall of the calculation grid. The real unemployment number is between 16 and 20 percent.
The debt: Mr. Obama took a $9 trillion debt and increased it to $16 trillion. It is projected to reach $20 trillion by 2016. Obama blames the wars in Iraq and Afghanistan, but once again this is not true. The real cost drivers are entitlements. Social Security, Medicare, and Medicaid are what is causing the exploding the debt. Obama demonized GOP plans championed by Paul Ryan to address these issues. Obama did not offer a serious plan of his own. The biggest increase in the debt comes from Obamacare, with costs set to explode in 2014.
The deficit: Mr. Obama promised to reduce the deficit in half during his first term. He never said how he would do this. He does not say how he would in a second term. Entitlements have America heading toward a fiscal cliff, and Obama has no answers. Deficits have increased on his watch to over $1 trillion annually for three straight years. That had never happened before he took office.
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