Obama’s Long Malaise
by Jeffrey Folks
Issue 209 – August 15, 2012
On October 9, 2007, the Dow Jones Industrial Average recorded an all-time high close of 14,164. Since then it has been all downhill, not just for the stock market but for the American economy, and it is liberals like Barack Obama who are to blame. What stands out is not just the tepid recovery we have experienced but the sense that there is no end in sight to the current economic malaise. Not since Jimmy Carter has an incumbent president with such bad numbers run his campaign on the premise that the public demands more of the same.
In 2009, with the swearing in of Barack Obama, Democrats gained total control of government for the next two years. The job-killing spree that had begun with the Democratic Congress of 2006 turned into a rout with the passage of ObamaCare, Dodd- Frank, and a version of cap and trade that has been implemented by executive order after it failed in the Senate. With each new regulation and tax increase, businesses have cut their hiring plans, consumers have pulled back, and economic growth has declined.
During the Carter administration, when 57 Americans were held hostage in Iran, that crisis was marked each evening on the national news with a daily count which reached 444 days before the hostages were released in January 1981. The current economic malaise, the longest period of stagnation since the Great Depression, is a crisis similar in one respect: like the Iran hostage crisis, the current period of economic stagnation drags on and on, worsening and compounding with each day that passes.
In the present crisis, the nation as a whole is being held hostage by anti-growth ideologues within the Democratic Party. It has been 13 quarters since the end of the Great Recession, but GDP growth has remained below 4%—the minimal growth rate expected during a recovery— throughout that period. That’s nearly 1,200 days since America has experienced even a middling level of post-recession growth.
When Obama entered office in January 2009, the unemployment rate stood at 7.3%, the highest it had been at any point during the Bush presidency. In just one month under Obama, the unemployment rate rose to 8.3%, and despite his promise that it would never rise above 8% during his presidency, it has never fallen below 8% since. It has now been more than 1,200 days since the unemployment rate in the U.S. has fallen below 8%, and the latest jobs report suggests that the situation is worsening. The June report shows a net addition of only 80,000 jobs, a figure likely to be revised downward if recent history is any guide.
By contrast, the average unemployment rate during the Bush presidency was 5.3%. As Peter Wehner points out in a recent Commentary article, “In Bush v. Obama, Bush Wins in a Rout,” Obama and his party are largely to blame for the failed economy we now experience. Having inherited a severe recession and fully cognizant of the fact that growth-oriented policies were needed, Obama recklessly implemented policies that were hostile to business. He is not the victim of exogenous forces such as the European debt crisis or slowing growth in the emerging countries. He himself is the architect of slow growth.
In truth, employment is even worse than the headline number suggests, with 5 million fewer Americans now working than in 2007. Astounding as it seems, the American economy, measured by the number of persons working and the total of wages earned, has been contracting during a post-recessionary period of economic recovery. No other administration in American history has the unenviable distinction of having reduced the size of the workforce over the course of four years of economic recovery. If this is what the Obama recovery looks like, I would hate to see a recession on his watch.
The long malaise will not end until Obama and the Democratic Party are swept out of office and conservatives enjoy control of Congress and the executive. At that point America can begin the recovery that Obama talks of but never delivers. With the repeal of ObamaCare and Dodd-Frank, the reining in of the EPA, and a positive, pro-growth attitude toward business, the economy will heal all by itself, with no help from government.
Jeffrey Folks is the author of many books and articles on American culture, including Heartland of the Imagination (2011).