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Some weeks ago the President made the inconceivable retort that the private sector is doing fine. No need to rehash the economic facts, it is clear to all that this is not even close to being true. He further iterated that the real problem was a lack of governmental expansion, especially at the state and local level (See Reality Check). Words like clueless and out of touch seem to come up short in describing such statements, beyond the pale might come close.
This week the jobs report came out and it showed hiring is continuing to head south. Only 80,000 jobs were added last month. Given that a country the size of the U.S. needs around 150,000 just to keep even with retirements and new people coming into the workplace the number actually meant a 70,000 net loss. A much less heralded but just as important report came out just prior to the jobs report. The ISM report (Institute for Supply Management) gives a month by month synopsis of what industry movers and shakers are doing. This report used by economists the world over shows the Manufacturer Index hitting a three year low, basically showing manufacturing is planning to slow and slow significantly.
So what is the latest from the President? Is he talking about a new stimulus (which wouldn’t work but would show he knew there was a problem) or some bold plan to lower taxes to thwart further economic calamity? The answer is no, not only is it no it is actually quite the opposite. The president’s response to the latest economic news is “Its a Step in the Right Direction.” The jobs growth was expected to be 95,000 or better but that does not matter. The fact is the average for the first quarter was 225,000 jobs but now the second is struggling with just 75,000. Add to this the ISM report and you have an economy in real trouble. Despite these recent reports the President seems to think things are going well or at least not doing all that bad.
In actuality President Obama’s statements seems to better fit the realm of those who lurk in dark padded cells and prefer fantasy to the real world. Sure he might be just trying to put a positive spin on a bad situation but that does not explain his actions or more appropriately his lack of action. No, the truth is he is acting more like a person in denial than someone concerned with the real state of things (or whose agenda is more important than jobs, the economy or his keeping the presidency). It is no wonder his slogan is “Forward,” in his world everything is doing fine. Unfortunately most people do not live in the President’s ivory tower and “Forward” looks more and more like a recipe for disaster.
The President’s statements do seem to shine some light on his tax policy decisions. When one refuses to accept there is a problem then why should one try to fix things? Prime examples are the two looming economic Goliaths that threaten to sucker punch the economy shortly after the election. The first is one of the greatest tax hikes in history, the expiration of the Bush era tax cuts. As the economy is showing signs of slowing and every likelihood of going into recession (or going deeper into recession for most people) the tax hikes could not come at a worse time. The second is Obamacare which is the greatest tax hike in history and a regulatory nightmare to boot. Avoiding or delaying either is not on the President’s agenda.
These two tax hikes plus the accompanying regulations are two shining icebergs floating in the path of economic recovery. They are lying in wait for the American Economy, either one of which could be devastating. The captain of the ship, inexplicably, is not trying to veer away or initiating some sort of maneuvers to avoid the impending collisions, no his call is to go “forward,” forward to disaster, forward to economic calamity, forward to ever increasing state power. Full speed ahead is the call and delusion its driving force.
The great economy of the United States could possibly absorb the blow from the expiration of the tax cuts in good economic times. Obamacare on the other hand would likely rock the economy even in the best of times. The effects of the two together in as uncertain economic times as these is likely to be disastrous. Add to this the possible economic collapse of the European Union and you have a situation far to grave to imagine.
The administration for its part is moving along on autopilot. No plans to change, no ideas, only hope and a slogan. They may think “Forward” is cutesy and might even think it might be inspirational to their base but “Forward” is not a strategy, it is a sound bite. Of course, neither is denial. The President is living in a separate universe and trying to lead in this one.
Unfortunately for the American people they will be feeling the impact of his policies even if he loses. At least this time a change in leadership will bring with it real hope for improvement.
POST SCRIPT: The President has since done a partial flip flop, seeing an opening for more class warfare he has relented on extending some of the Bush era tax cuts but only for those making less then $250,000 a year.
“An economy hampered by restrictive tax rates will never produce enough revenue to balance our budget, just as it will never produce enough jobs or enough profits”. John F. Kennedy
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