recovery

Barack Obama hates America — that’s the only conclusion you can draw after nearly six years of terrible economic policies

This is pretty douchetastic. In an Independence Day eve speech at the DC-based tech firm 1776, President Barack Obama — the worst president since World War II — suggested that Republicans don’t have enough “economic patriotism” to work with him to get the economy moving again:

“[W]e can make even more progress if Congress is willing to work with my administration and to set politics aside, at least occasionally, which I know is what the American people are urgently looking for,” Obama said Thursday at 1776. “It’s a sort of economic patriotism where you say to yourself, how is it that we can start rebuilding this country to make sure that all of the young people who are here but their kids and their grandkids are going to be able to enjoy the same incredible opportunities that this country offers as we have. That’s our job. That’s what we should be focused on. And it’s worth remembering as we go into Independence Day.”

What. The. Actual. Fuck.

Sorry, but this is ridiculous. President Barack Obama’s idea of working with Republicans is for them to do what he wants without asking questions. He doesn’t view Congress as a coequal branch of government, but rather a minor inconvenience that he can go around pretty much whenever he wants.

What’s more, if President Obama wants to start throwing around the term “economic patriotism” so loosely, then his own record should be open for discussion. The most recent recession, for example, officially ended six years ago, in June 2008.

Failed $831 billion stimulus bill signed five years ago today

Believe it or not, folks, it’s been five years since President Barack Obama signed the American Recovery and Reinvestment Act, the 2009 stimulus measure spent $831 billion on infrastructure, tax credits, and other policies that largely served as taxpayer-funded giveaways to core leftist constituencies

Passed in the aftermath of the Great Recession, the stimulus bill was based on the Keynesian notion that the government, through spending on “shovel-ready” infrastructure projects and other purported economic multipliers, could drive aggregate demand and create jobs.

Christina Romer and Jared Bernstein, the economic advisors who developed the stimulus plan, argued that these policies would help bring the United States back from the brink of economic depression. In their January 2009 policy paper, the two economists claimed that the unemployment rate would not exceed 7.9% with the stimulus bill, while it would reach 8.8% without it. Because, you know, counterfactual.

They were wrong.

Even with the $831 billion stimulus bill, the unemployment rate rose from 7.8% in January 2009 to 10% in October of that same year, at which point Romer declared that the measure had already had its greatest impact. In fact, unemployment didn’t fall below 9% until October 2011.

The infamous Romer-Bernstein chart shows the unemployment rate falling to 5% in December 2013. In reality, the December 2013 unemployment rate was 6.7%, nearly 2 points higher.

Obama’s economy: Labor participation drops again, recovery far below average

The October jobs report surprised analysts, many of whom thought that the government shutdown would have a negative impact on the economy. Not only were 204,000 jobs added last month, the two previous months were revised upward by 60,000.

The bad news is that the unemployment rate ticked up slightly to 7.3%, as did the U-6 unemployment rate, now at 13.8%. The worse news is that number of workers not in the labor force exploded by 932,000 in October, according to Zero Hedge, bringing the labor participation rate to 62.8%. Not only is this the lowest rate since the aftermath of the 2007-2008 recession, it’s the lowest since 1978.

(Chart via Zero Hedge - click to enlarge)

The Employment Policy Institute (EPI), a leftist think tank, offered a rather grim take on the jobs report and the long-term outlook.

House Democrat welcomes “stealth socialism” in America

Alan Grayson

Rep. Alan Grayson (D-FL) says that “stealth socialism” has been “created” in the United States through the Federal Reserve’s bond buying program, which essentially monetizes the government’s debt. What’s more he’s happy about it.

“The one good thing that’s happened in the past five years, in the sense of making people hopeful that the economy might survive a collapse, is that the Federal Reserve’s unconventional monetary policy put us back on a low-level track toward growth,”Grayson, a far-leftist firebrand, told Salon.com in a recent interview. “They showed that monetary policy in extremis can work to some degree.”

In a surprise move, the Federal Reserve announced last week that it would continue the bond buying program, known as “quantitative easing,” in hopes that it would stimulate an economy that is still struggling to recover from the 2008 recession. This is the third round of quantitative easing (QE3) since 2009, bringing the Federal Reserve’s balance sheet, according to the Los Angeles Times, “to nearly $3.7 trillion from about $900 billion in mid-2008.”

“We’ve had a government takeover of the bond market. Stealth socialism’s been created. Government simply ends up owning more and more and more,” he said. “If government had taken over the steel industry, maybe it would have been more noticeable. They’ve taken over the financing of housing industry as well, with a desired result.”

Federal Reserve to the rescue? QE3 likely on the way

Ben Bernanke

“The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design.” - F.A. Hayek

After another poor jobs report, it seems that the Federal Reserve may launch a third round of quantitative easing, perhaps as early as this week, in hopes that it will bring a boost to the economy:

“QE3 is a done deal,” says Dan Greenhaus, chief global strategist at BTIG. “After today’s report, this debate is moot.”

Economists from Goldman Sachs share similar sentiment. They expect the Fed to launch a new bond-buying program next week, rather than in December or early 2013 as previously predicted.

A consensus is building in the bond market that a third bond-buying program, known as quantitative easing measures, will be a combination of longer-dated Treasury bonds and mortgage-backed securities, which would boost the value of
the targeted assets.

Goldman’s Jan Hatzius says QE3 will likely consist of an open-ended asset purchase program of around $50 billion per month. He doesn’t anticipate an end date given in advance. Instead it would likely be formulated based on the pace of the economic recovery.

Michelle Meyer, senior U.S. economist at Bank of America BAC. Merrill Lynch, is also in the camp that expects more Fed easing.

“The Fed will not stand idle in the face of subpar growth,” she says. “We expect additional balance sheet expansion before year-end, with a growing probability of an open-ended QE program tied to healing in the economy.”

Aren’t we supposed to be in an economic recovery?

While it seems that President Barack Obama may have received a bump in support thanks to some firey speeches at the Democratic National Convention last week, the gains may be short-lived thanks to yet another dismal jobs report. On Friday, the Bureau of Labor Statistics (BLS) reported that 96,000 jobs were created in August, though the unemployment rate did fall, that is thanks to some 368,000 people leaving the labor market.

President Obama and Democrats are trying to put the best spin they can on the report, oftening claiming that 4.5 million private-sector jobs have been created since January 2010, which is a dubious claim since the net gain is closer to 300,000 since he took office. But it’s hard to look at the numbers and deny just how poorly the economy is functioning in what is supposed to be a recovery. James Pethokoukis noted a key point, outside of the job creation numbers and unemployment rate, is average hourly earnings from the private-sector. As you can see, the numbers so a continuing downward trend, even three years after the recession ended:

Is Obama’s recovery better than the Reagan economy?

Ronald Reagan

There is a reason that Democrats are focusing on just about any issue other than the economy. Despite promises that the unemployment rate would be 5.6% today with the passage of the 2009 stimulus bill, it’s actually at 8.3%. Many have pulled out of the labor market entirely and economic forecasts are constantly being revised downward.

With all of that, it’s odd that anyone from President Barack Obama’s campaign would claim that they’ve been good on jobs. It’s even more odd that Stephanie Cutter, a spokewoman for Obama’s campaign, would say that the current recovery is better than that of Ronald Reagan (emphasis mine):

Well, I think that worker probably has a good understanding of what’s happened over the past four years in terms of the president coming in and seeing 800,000 jobs lost on the day that the president was being sworn in, and seeing the president moving pretty quickly to stem the losses, to turn the economy around, and over the past, you know, 27 months we’ve created 4.5 million private sector jobs. That’s more jobs than in the Bush recovery, in the Reagan recovery, there’s obviously more we need to do, and as I said to Mika at the at beginning of the program, I think that unemployed worker probably sees one person in this race trying to move the country forward and that’s the president.

So this is recovery?

I’ve written before that I don’t believe there is really an economic recovery.  I’ve been questioned on that before, and I honestly just don’t believe it.  While there have been jobs created, they’re a paltry amount compared to the number needed on a monthly basis to truly be what I would feel is a recovery.  Apparently, The Atlantic has a report that seems to, at least somewhat, agree with me:

This is a remarkable sequence of pictures from Calculated Risk showing that no major economic indicator has returned to its pre-crisis level. In other words, after two years of recovery, not a single key broad measure of the economy has actually recovered.

The ingenious thing about these graphs, which I’ve never before seen, is that they compare key recession indicators as a share of their pre-recession peaks. The outcome reveals each recession in the last 50 years as a kind of hanging icicle. Ours is by far the longest, and we don’t yet know when we’ll trace our way back to the 2007. Here’s why I don’t expect the path up to get much smoother in the near future.

I’m not going to put up the graphs, because it’s their bandwidth and I’m not going to steal it.

Now, these graphs do show a move towards a recovery.  We’ve hit the peak and are moving in a more positive direction.  However, recovery indicates a lot more to me than just a trend back.  It needs to actually be close to where we started.  Only one of the four graphs even remotely comes close to that, and that’s gross GDP.  Unemployment, which isn’t really a shock if you follow the numbers coming out each month, shows even less of a move towards recovery.

The newest sign of a bad economy

For many libertarians and conservatives, the mainstream media isn’t the most friendly ground for news.  A perceived bias – real or not – turns many of us off.  However, CBS News has a report that seems to confirm my post yesterday that there is no recovery, despite what Washington is trying to tell us.

From CBS News (emphasis added):

Tinong Nwachan, for example, has far too much time on his hands. When CBS News met the former truck driver he had been out of work for two years.

“I don’t really tell too many people this but I’m not ashamed or nothing, I’m homeless,” Nwachan said.

His day job is looking for work at a jobs center in Hollywood. He has plenty of company, including Fabian Lambrecht, who wonders when the economy’s improvement will affect them.”They’re saying there are more jobs. I’m just wondering where those jobs are,” Lambrecht said.

About 6.2 million Americans, 45.1 percent of all unemployed workers in this country, have been jobless for more than six months – a higher percentage than during the Great Depression.

And this is supposed to be a recovery?  I don’t think so.

The truth is that what little recovery-like behavior we’ve seen hasn’t particularly been sustained.  There’s been a lot of talk about a jobless recovery, at least earlier on in the process, but frankly people don’t give a damn about recovery unless there are jobs.  Let’s be honest for a moment here, is there anyone who really thinks it’s not a big deal when we can find a statistic dealing with this economy where we are actually worse off than during the Great Depression?

There is no recovery

Last week, it was announced that unemployment had risen .1%.  The economy only gained 54,000 jobs.  The Dow was moving in the wrong direction, which affects millions of Americans who don’t remotely qualify as “rich”.  What does all of this mean?  It’s simple.  That’s the idea that we’re in a recovery has as much basis if fact as unicorns and leprechauns.

While we may not be having the collapse we were just a couple of years ago, we’re clearly not in anything approaching a recovery.  In a recovery, people go to work.  The stock markets builds.  Things start moving in a much more positive direction.  However, that just ain’t happening.

Instead, we have a great deal of instability.  While unemployment may improve over several months, it can then drop over the next month or two.  Even with a generally downward trend, that instability doesn’t exactly engender confidence in the US economy.

Things are rough all over though.  Greece is looking to the EU for yet another round of bailouts (and people are already protesting the necessary austerity measures to go along with it). Portugal has had a recent change in government due to their economy as well.  No one seems to really be doing well.

Now, it’s easy for people to see a couple of indicators and say “See?  It’s getting better.”  Honestly, I wish that was the truth.  However, that just ain’t the case.  Instead, those are false indicators of recovery…or so they seem at this point.  Had indicators improved over a longer period of time, it might have been fine.  Instead, investors are unsure what they should be doing with their money.  They seem to decide that it’s best to just sit on their money for the time being.  That means money isn’t being invested, money needed to create new jobs.


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