Since the Federal Reserve announced its third-round of quantitative easing (QE3), a monetary policy move which essentially involves the central bank buying up debt, Americans are beginning to wondering what impact it will have on them.
The goal of QE3 is ultimately to bring down the unemployment by one-percent, but it would also raise commodity prices and may even have some affect on housing market, though that impact may be marginal.
Questions remain whether the launching the program was wise, especially when one considers that the two previous rounds of quantitative easing and Operation Twist, have done little to ease the slow growth the economy has experienced.
The Federal Reserve, which has printed money and loaned trillions to national and foreign banks, has been under increased scrutiny since the 2008 financial crisis. Over the last four years, Rep. Ron Paul (R-TX) has led the push in Congress to audit the United States’ central bank. As George Will recently said, the Federal Reserve has become the fourth branch of government, taking questionable steps with little oversight. Others wonder if the United States even needs the Fed since its creating more problems than anything else.
In a new video from Learn Liberty, Lawrence White, a professor at George Mason University, explains that the United States could indeed survive and prosper without the Federal Reserve, which, as he notes, has frequently become impediment to economic growth:
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:
Facing an increasingly tight race for re-election thanks to lagging job growth, President Barack Obama yesterday ostensibly said that it’s too soon to give him a fair grade, despite being in office for almost a full term:
President Obama’s assessment of his first term hasn’t changed since the last time he weighed in.
Asked to grade his first term in an interview with KKTV in Colorado, Obama said: “You know I would say incomplete…but what I would say is the steps that we have taken in saving the auto industry, in making sure that college is more affordable and investing in clean energy and science and technology and research, those are all the things that we are going to need to grow over the long term.”
The grade — typically given by teachers to students with unfinished work — is what Obama has given himself a number of other times.
While President Obama has given himself an “incomplete” on other occasions in the last couple of years, he wasn’t so shy about giving himself positive marks after less than a full year in the White House. In case you don’t remember, Obama gave himself a “solid B-plus” on the economy during an interview with Oprah Winfrey in December 2009, adding that if he got his health care law signed, “[W]e tip into A-minus.”
Citizens United, a group made famous thanks to a 2010 Supreme Court case dealing with free speech, put together some good stuff about the Left in the United States. They will soon be released Occupy Unmasked, which documents the crazy that we know as Occupy Wall Street.
Another documentary, The Hope and the Change, they’ve put together looks at the thoughts of some Democrats and independent voters who supported Barack Obama in 2008, but have been disappointed in his presidency:
This documentary, which is out now on DVD, will be among those offered by Citizens United for a free screening during next week’s Republican National Convention in Tampa.
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.
While we have gotten off on another distraction thanks to Todd Akin’s comments about abortion and rape, swing state voters may wish the national focus of the election was back on the economy. According to recent jobs numbers, the unemployment rate went up in 44 states, including many that will play a factor in determining the presidential race:
The jobless rate climbed in July in nine of 10 battleground states that could play a pivotal role in the presidential election, even though employers added workers in most of them.
The unemployment rates rose in Iowa, Florida, Michigan, Nevada, New Hampshire, Pennsylvania, and Virginia, according to Labor Department data released Friday. The rate also increased very slightly, in Colorado and North Carolina, and held steady in Ohio, ending 11 months of declines there, the data show.
Nevada’s 12% unemployment was highest among all 50 states. Michigan’s rate hit 9% for the first time since January, and Florida’s rate, now at 8.8%, increased for the first time in more than a year.
The state figures largely tracked the national jobless rate, which ticked up to 8.3% in July from 8.2% in June.
Separately, Gallup notes that 56% of voters in swing states say they are not better off than they were four years ago. Only 40% say they are better off. The number of voters who say they aren’t better off is up slightly from when the same question was asked back in January. Who do they blame? Twenty percent point their finger at President Barack Obama, while only 7% blame his predecessor, George W. Bush.
Yesterday, my friends at the Foundation for Economic Education noted a recent article by the Christian Science Monitor explaining how the “debate about job creation is becoming one of the central themes of this year’s election campaign.” While it’s true that the economy, which includes “job creation,” is something to which some voters are paying attention, those running things in Washington are trying to find any excuse to talk about other issues.
The record of President Barack Obama on the economy should be the primary focus of voters at the point in time. With the real unemployment rate at 15% (the U-3 rate, which is what media outlets report, is at 8.3%), a budget deficit approaching $1 trillion for the fourth consecutive year, and the fiscal cliff looming; it’s hard to defend Obama’s record. In fact, as Dan Mitchell recently explained, Obamanomics has been a failure.
The jobs report from July has been met with familar rhetoric from both sides. Republicans, highlighting the fact that this is the 42nd consecutive month with an unemployment rate of 8% or higher, used it as evidence that President Barack Obama’s economic policies are a failure. Democrats pointed to the gains in employment and again urged Americans not to read too much into the lagging job creation.
So who are we supposed to believe? The basics of the jobs report are pretty straightforward. There were 163,000 jobs created in July, which is slightly higher than the number needed to keep up with population growth. However, 150,000 workers left the workforce. Mish Shedlock notes that “those ‘not’ in the labor force rose by 2,027,000” in the last year, which is a concerning number. Shedlock points out that “[w]ere it not for people dropping out of the labor force, the unemployment rate would be well over 11%.”
If that number isn’t overwhelming enough, the Hamilton Project estimates that, given current job growth trends, unemployment will not fall to pre-recession levels until 2025:
There is no denying at all that Mitt Romney reverses positions as frequently as the wind changes. We can go through and cite numorous examples. But that doesn’t absolve or excuse President Barack Obama from his own reversals in matters of public policy, including his flip-flop on raising taxes during tough economic times.
During his weekly address on December 11, 2010, President Obama, who was pushing a two-year extension of existing tax rates, explained, “By putting more money in people’s pockets, and helping companies grow, we’re going to see people being able to spend a little more, we’re going to spur hiring - we’re going to strengthen our entire economy.” Obama also Truer words could not have been spoken.
Indeed, the strength of our economy rides on the back of small businesses. But they are currently being threatened by President Obama’s proposed tax hike, which has already cleared the Senate. But this is counter to what President Obama said in 2009, when he noted that “[y]ou don’t raise taxes in a recession.”