As an example, let’s first look at Bill Clinton, the great job creator, and see just how he did it.
Clinton is credited with creating 23 million jobs according to Bureau of Labor Statistics (BLS) reporting. That’s pretty darn impressive no matter what you think about Slick Willy but to give all the credit to Bill himself would be wrong. Yes Clinton played a very big role in job creation, he also had a boat load of help and good fortune along the way.
First, Bill Clinton came to office heading in to the 4th year of what became our nation’s greatest decade of economic growth. What kick started that growth? A few things, two of the biggies being the technology of the personal computer and internet which, at the time, were rapidly being integrated into business. That integration created the largest leap in increased productivity since the introduction of the gasoline engine at the turn of the 20th century. George H W Bush’s massive military spending cuts, made possible by the collapse of the Soviet Union and the end of the cold war, had huge positive effects on the economy as well. These two economic growth factors gave Bill Clinton a huge leg up at the start of his presidency.
But things got even better for Bill as record low oil prices played their part as well and the fact that there were no major wars that took place on his watch which would have upset global trade and chewed up a big chunk of the federal budget. And the most significant attributing factor that nobody ever seems to mention is the number of able bodied men and women who were unemployed and looking for work when Clinton took office. When Clinton took office, unemployment was relatively high, at 7.1% and was coupled with good labor participation rate meaning that there were plenty of folks lined up and ready to grab one of those jobs the robust economy was creating almost in its own.
Bill Clinton could not have been dealt a better hand in regards to job creation and is why he was able to log 23 million jobs created on his watch. He of course did his part, mostly by not imposing anti-business policies or hurtful regulations.
But as the saying goes, all good things must come to an end and so did the decade long growth spirt which ended after Clinton’s 7th year in office. During his final year, the economy cooled off significantly and for the first time in his presidency, Slick Willy recorded several months of negative job growth. This was the start of what would become the 2001 recession which officially started just two months after he left office.
Enter George W Bush (Bush43)
A decade of robust economic growth had just come to an end, unemployment was at near record lows and the economy was just starting to slip in to recession. By all accounts, Bush should have been in significant trouble but instead he managed to minimize the effects of the recession, hold the economy stable and create enough jobs to maintain the low unemployment rate handed off to him by his predecessor. On his watch Bush turned in 44 months of unemployment at or lower than Clinton’s 2 term 5.1% average, 31 of those months being below 5.0%. He managed this despite dealing with negative global economic factors caused by the single largest terrorist attack our nation had ever experienced, fighting two wars and last but certainly not least, having to fight the coming effects of the housing bubble resulting from policies that attributed to much of his predecessor success.
At the time the housing bubble began to show signs of real danger and started to have an adverse effect on the economy, unemployment was still held at a mere 4.7% due to the Bush Administration economic policies. And while Bush was not gifted with any of the pro-growth economic factors afforded to his predecessor and spent his first year in office tuning around the small recession he inherited, he still managed to create 8.7 million jobs before the bottom fell out. Had the bubble not burst and the economy remained on its same trajectory, Bush would have ended his tenure having created roughly 11 million jobs. And while this figure may not look all too impressive standing on its own, when you consider that unemployment had been pushed to its lower limits during the Clinton Administration and the large number of negative economic factors Bush fought against throughout his 2 terms in office, 11 million jobs created would have in fact been pretty impressive.
But the bottom did fall out which spurred the greatest recession since the Great Depression. In the end Bush had a 2 term unemployment average of 5.6% and if you were to exclude the 19 month downturn heading in to the Great Recession, Bush’s 77 month unemployment average was an impressive 5.2%.
In summary, Bush was not handed an economy with high unemployment and a robust economy creating jobs almost on its own, Bush instead was handed a someone neutral economy that had just experienced its longest growth period history. The 2001 recession was a natural occurrence to such an end, it was short, shallow and most of all, it was dealt with, allowing Bush to carry on in the healthy economic environment that afforded him 4 years of unemployment figures that match or exceeded the great job creator’s {Bill Clinton} 5.1% 2 term average. Last, Bush’s second term as president was marred with the housing bubble bursting and collapse of our nation’s financial sector. But as horrible as the recession was in a real sense, politically it was a gift to Obama, or at least is should have been.
The Gift of the Great Recession and what Obama Did With It
Sure Obama took over as President in the depths of the Great Recession but what was really handed over to him was an incredible opportunity to emerge as the President who saved the US economy, all the pieces were in place to make that happen and yet he somehow managed to piss it all away.
The fact of the matter was that most of the hard work to right the heavily listing ship had already been accomplished on George W Bush’s watch. Bush did include President Elect Obama in many of the discussions and even consulted with Obama on some of the decision making processes as he knew this would soon be Obama’s recession to deal with, but it was the actions of the Bush Administration that set the wheels of change in motion. Dozens of provisions in the TARP had already been implemented and their effects begun to stabilized the financial sector before the change of command. As well, the monetary policy of Quantitative Easing had already been implemented to stimulate the economy, alone with other emergency actions taken by the Bush administration as the walls began to cave in.
And so it was, 5 months after Barack Obama took office that the National Bureau of Economic Research determined that in June of 2009 the Great Recession officially came to an end. Yes, the efforts put forth by the Bush Administration had in fact done their job. All that was left to do now was for the newly elected president to instill confidence in the American business person, business investors and the middle class that that the economy was in fact stable again so that spending and investment would resume. Unfortunately for our nation, economic policy was not President Obama’s strong suite and in his own naivety and inexperience as a leader he placed his personal agenda in front of the good of the nation with devastating effect.
From the very start of his term as POTUS, Obama pushed for and received, through his Democratic controlled congress, three highly unpopular pieces of legislation that proved detrimental to an already frail economy desperately trying to recover.
First, a near $1 trillion stimulus package, largely crafted by Obama’s “economic team” before even taking office. The stimulus offered little if anything in the way of new jobs creation. The “shovel ready” jobs fallacy the new president used to sell his stimulus to the American people was flawed on its face and at his own much later admission, turned out to be a failure. Instead of a package to stimulate job growth, the President’s stimulus provided for more relief to individuals and families which Obama promised would somehow magically lift 2 million people out of poverty. This too failed and today, the number who live in poverty under the care and protection of President Obama has increase somewhere in the neighborhood of 6 million. Last, Obama’s stimulus package had a large green energy component that again, also failed. But worse than it failing was the cold hard fact that it had nothing to do with immediate job creation but instead everything to do with Obama’s long term agenda. The American people and business investors saw right through Obama’s stimulus ploy which was the first of several actions that broke their confidence in both the new President and the economy. The vote on the bill was a tell tail sign of things to come as well passing in both the Democratic controlled House and Senate in a near party line vote. Republicans obviously shared the same sentiment for the stimulus deal as did business persons, investors and the majority of the middle class, they saw it as hurtful to the growth of the economy and they were right!
Second, the Auto Industry bailout. The American people were already pissed that they had to bail out Wall Street and now the President was suggesting a massive bailout for the failing auto industry. Most preferred that the normal course of bankruptcy be allowed to occur but the President was adamant about the bailout because of course, like the stimulus, it gave him a vehicle to push his green energy agenda. This was another clear sign to investors and business owners that the best interest of the economy was not the top priority of this President.
And just as the stimulus was a massive failure, so was the bailout as both GM and Chrysler still ended up filing for bankruptcy although Team Obama meddled in that process as well in order to protect the interests of the auto unions which the bank restructure most defenatly would have come down hard on. Nearly two thirds of American’s opposed the auto industry bailout however, Obama showed early on in his presidency that he had little regard to the will of the people. Today, a huge portion of both GM’s and Chrysler’s taxpayer funded bailout has been forgiven and Chrysler is no longer American owned.
Third was ObamaCare. There was significant outrage across the nation when President Obama made it crystal clear that ObamaCare was the top agenda item, vowing that healthcare reform legislation would be passed during his first year in office. As each new piece of the bill was introduced, across the nation town hall meetings were erupting in chaos as small and large business owners alike expressed their outrage over the hundreds of provisions in the law, most of which did not work in favor of creating a better and more stable economy. Even before its passage in to law, small and large businesses began making employment decisions based on the effect they believed the law would have on their business and now that it is in fact law, small and medium businesses hiring practices have been significantly impacted in a very negative way. And here we are, five years later and ObamaCare is still negatively impacting small and medium business owners and stifling job growth.
And in a sick twist of ObamaCare irony, it took 14 million taxpayer funded recipients of the Medicaid expansion to generate roughly 1 million new healthcare sector jobs. The Obama Administration likes to call this an expansion of the private sector job market but any rational thinking person understands that it is nothing but a government created, taxpayer subsidized jobs program. Wouldn’t it have been so much nicer if the economy of those 14 million were improved such that allowed them to become active participants in the healthcare insurance marketplace on their own instead of the recipient of another government run, taxpayer funded entitlement program?
And Obama’s suppression of economic growth did not end at these three pieces of legislation as he quickly put his team to work in trying to think of every way possible that they could somehow push his green energy agenda forward by somehow disguising it as an economic recovery program. From that we got wonderful failures such as Cash for Clunkers and a mountain of new federal regulations that weakened instead of strengthened small business owners and investors belief in the nation’s economy. President Obama also did not possess the political nor personal maturity to put off his war on coal until the economic crises was over. Instead the threat of cap and trade emerged along with another mountain of regulations the targeted the energy sector which only further troubled those waiting for signs of a stable economy so that they could begin to start spending and investing again.
As a result of all Obama’s economic blunders and the pushing of his many progressive agendas in the midst of the largest economic crisis since the Great Depression, the economy shed another 4.6 million jobs during his first year in office. Pile that on to the 4.4 million jobs which had already been lost during the previous 18 months and you have a jobs hole in the economy 9 million deep that needed to be filled. But in order to start filling that hole, confidence would need to be instilled in business owners and investors before the would start taking on any new risk, a task that President Obama proved that he simply was not up to.
So despite there being enough economic indicators for the National Bureau of Economic Research to call the end of the recession in June of 2009, sadly the Obama administration did more to tear down Americans confidence in the economy than to restore it. It was not just small business owners and investors who were not willing to take on any new risks, the middle class chose not to either and instead of spending they held back, afraid of what might happened, tomorrow, next week, next month and even next year. The uncertainty of the poor Obama economic recovery plan had everyone worried and rightly so.
Obama had an economy dying to recover with near zero inflation to deal with and interest rates at near zero as well. Over 4 million jobs has been lost thus creating a more than able unemployed workforce just waiting to take their jobs back. And there was plenty of money just waiting to be sunk into the economy by investors as well. The only thing lacking was business and investor confidence and it was clear that this was not going to be restored any time soon.
Within 9 months of Obama taking office unemployment rose from 8.3% to 10% where it hovered for the next 6 month before finally starting its lengthy downward trend, remaining at 9.0% or greater for 30 consecutive months. Obama would not see the unemployment rate fall to the same point it was when he first took office for a full 3 years and sadly that lower rate was not achieved through job growth but instead by a drop in the labor participation rate. Americans were simply giving up on looking for work, a sad trend that continues today with more than 11 million Americans having fallen out of the work force.
There is a lot to digest here I know but what it really all boils down to is the given the set of economic circumstances that were passed to President Obama should have easily resulted in job creation numbers in line with Bill Clinton. What we have instead is a situation where, seven years after taking office, the nation is still short of breaking even by 4.3 million jobs when you take in to account the increase in the number of people eligible to enter the workforce.
Had the rolls been reversed and Bush applied his economic policies to the economy handed to Obama it is more than clear that our nation would have been significantly better off in regards to job growth. This is by no means an endorsement of George W Bush’s economic policies but it is however, a scathing indictment to the utter failure of President Obama’s.
No comments:
Post a Comment