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Sunday, June 26, 2011

"Unchartered Depths": Obama Policies Provide The 'Worst Recovery' In A Lifetime

WSJ shows that the Joint Economic Committee has chronicled how weak Obama's recovery has been compared to others since World War II. Here is how Obama's recovery compares to previous post 1960 recoveries: (From report called "Unchartered Depths")

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In a report entitled "Unchartered Depths," the Committee finds that "employment is now 5.0% below what it was at the start of the recession, 38 months ago. This compares to an average rise in employment of 3.7% over the same period in prior post-WWII recessions."

On economic growth, real GDP has risen 0.8% over the 13 quarters since the recession began, compared to an average increase of 9.9% in past recoveries. From the beginning of the recession to April 2011, real personal income has grown just .9% compared to 9.4% for the same period in previous post 1960 recessions.

The standard response from Obama apologists is that recession of 2008 and 2009 was different because, as former Clinton administration economist Robert Shapiro puts it, "this was a financial crisis, and these take longer to recover from." In fact, in most cases, the deeper the recession, the stronger the recovery to make up for lost ground.

That was what Ronald Reagan's critics said when the U.S. economy soared during 1983 and 1984 with quarterly growth numbers exceeding 7%. At the time, liberal Keynesians yawned and declared the good times nothing more than a normal snapback from the deep recession.

So where is the normal snapback now? Even $4 trillion in deficits since 2009 and nearly $2 trillion of asset purchases by the Fed haven't pulled the economy from its funk.

No one denies Obama inherited a bad economic situation, as have other presidents in the past. Comparing the the results from Obama's actions with the actions and results of previous administrations faced with inherited economic difficulties tells a story of a failed recovery.

Here are a few of the differences between what Reagan successfully did to spur recovery compared to what Obama has done:

Like President Reagan, President Obama inherited an economy in crisis. But Obama came into office vowing to implement policy ideas that were exactly opposite the ideas that inspired the successful Reagan Presidency.

* Reagan cut income tax rates. Obama spent his first two years promising to increase tax rates on “the rich,” mostly small business owners and investors. In December he signed legislation that schedules his tax increase to take effect two months after the 2012 Presidential election

* Reagan cut “discretionary” spending. Obama dramatically increased it.

* Reagan reduced regulation and government intervention in the private sector.

* Obama has implemented waves of new regulation and under his leadership Congress passed legislation that will require new regulations of health insurance and virtually every detail of banking and finance – even ATM cards.

He and Democrats spent when they should have cut. Obama and Democrats fought change when they should have ushered it in. Obama and Democrats focused on Obamacare, against the opposition of the majority of Americans, when they should have focused on job creation. Obama and Democrats spent trillions in monies we did not have, so they borrowed more to spend more. Obama and Democrats have declared all out war on businesses, which are a huge source of job creation and could give the economy the boost it needs to recover.

Every economic decision Barack Obama has made has pulled the so-called recovery farther back instead of pushing it forward.

It is Obama's failed policies that has made this the worst recovery of a lifetime, pure and simple.