Economic Recovery: The Old Dysfunctional
We started hearing about it six months after President Obama’s inauguration. The new normal. You know, permanently lowered economic expectations. A downturn that never looked back. Or up. From here on out, consumers are living lean by spending a whole lot less. High unemployment is a fact of life. So are vast, bleak oceans of foreclosed houses, deserted strip malls and boarded up storefronts. The nation’s debt throttle is stuck in high gear. Taxes barely invented are already squeezing the breath right out of us. All the color drained from our small lives, replaced by those depressing gray hues. Blah, blah, blah.
To hear it told, the Great Recession outsmarted us. The damage was so great we can’t figure out how to repair enough of it to find the sunny side of the street again. So, roll up the sidewalks because our future is behind us. The closest we’ll get to what once was is reading about it in history books. Which is pretty much right if you think the best we can do is what’s been done in the past two years.
But, you can put the pity party on hold if you recognize what those two years have really been about. A sorry performance by the old dysfunctional, all wrapped up in false promises and failed programs. And the pity party can be canceled altogether if we boot the people responsible so we can get going in the right direction again. With competent governance, even a good smack down can’t kill the world’s largest, most productive free economy. And not very much governance, at that.
So, where has the old dysfunctional left us? Jobs and GDP growth are a road map to its dumping ground. When the pretty-nearly $1 trillion stimulus bill was signed, unemployment was 7.6% with 11.2 million people unemployed. Back then, which seems like a couple of lifetimes ago, Obama promised that unemployment would never exceed 8.2%. Even better, by December 2010, the economy would reduce unemployment by millions of jobs. These fantastic results would happen because of the stimulus spending. Keynesian economics at its big government best. And oh, yeah, in 2010, GDP growth would reach 4% per year and continue at that stellar rate through at least 2013.
In the intervening twenty months, a bunch of things happened alright, but nothing like in Obama’s rosy parallel universe. Our unemployment rate hit 10.2% and hasn’t seen the south side of 9.5% since. With all that stimulus spending, the jobless number has increased by 3.2 million, or 28%. This year, our GDP growth has been sitting below 2% for months. That’s not even fast enough to keep pace with the number of people entering the job market due to population aging. This means the number of unemployed grows larger with each brand new job prospector.
None of this is surprising when you consider the dysfunctional programs themselves. Just take a look at two of the many, Shovel Ready and Making Work Pay. One of Obama’s major justifications for punching a huge stimulus hole in our budget last year was shovel ready jobs. In fact, his “pulpit power” speaking style wowed his listeners about shovel ready solutions to our economic recovery problem. But, last week, Obama admitted that shovel ready projects don’t exist. Not then. Not now. That’s a whole different kind of wow.
Making Work Pay is the tax credit that is so ineffective even the beneficiaries don’t know it exists. The credit was conceived as a tax cut of $400 for individuals and $800 for married couples. But, the Government feared the money would be saved rather than spent. So, the cut morphed into a credit of $15 per paycheck for those paid every two weeks, or barely one dollar a day. It wouldn’t be recognized at all except it costs $60 billion to fund.
Less than two years into his Presidency, Obama is losing major White House advisors. Vacancies this early in a Presidential term are usually because of the need for a new direction or the rats are deserting the sinking ship. Do you really want to take the chance that it’s the former? Or do you want to join the growing parade of politically attuned and realize it’s the latter?
See you in the mirror.