President Obama is overseeing the downsizing of America

Last Friday’s job numbers about settled the debate over President Obama’s economic policy — it stinks. About 18,000 jobs were created; not even a tenth of what is needed to sustain the economy. The unemployment rate is at a charitable 9.2 percent, but that’s far less than what it really is. Absent from those numbers are those who are no longer searching for work or working for $10 an hour or less. Under President Obama’s watch, huge numbers of laid off workers in their 40s and 50s are facing the reality of never regaining a highly paid position in their career field. Under this “downsizing of America” it’s not unrealistic to assume that a quarter of Americans are either unemployed or under-employed.

The extra debt that has been accumulated in the past 30 months to “pump up” the economy has not motivated the private sector to hire more workers. Fewer than two-thirds of working-age Americans are working; more than 40 percent of civilian adults within the age of work are not working. 

The Democrats’ wish for higher taxes and its strategy of demonizing the rich and business is underscored by the president ignoring a bipartisan debt commission’s recommendation. President Obama had the opportunity to embrace the debt commission proposal that — by 2035 — would have equalized federal outlays with federal tax revenue at 21 percent of GDP. The 21 percent level is higher than historical tax rates. Yet, Obama dissed the commission’s report. That was a big mistake. He could have used his bully pulpit, and public approval of the report, to intimidate the GOP to accept a tax hike that would lead to a balanced budget.

Perhaps the president feels more comfortable with a proposal from the very liberal Center for American Progress that assumes, quite cynically that the U.S. can support tax outlays of 23.8 percent of GDP. That, unfortunately, is a political report, not a bipartisan report, and business won’t respond positively to it. (read)

Both sides share blame in the debt mess, but the president’s lack of leadership on the issue is a bigger obstacle.

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23 Responses to President Obama is overseeing the downsizing of America

  1. Tom says:

    Doug, Doug, Doug

    I fear your republican/tea party/hateallthingsObama roots are showing! Maybe it is time to visit your hairdresser/head shrinker and get them touched up.

    So let me get this straight, Obama takes over the controls of the ship of state moments before it runs aground on the shoals of total bankruptcy and collapse, a course set by greedy, arrogant and morally bankrupt republican policies (read fat cats who control the vast majority of the nation’s wealth), he manages, through heroic and near impossible efforts, to avoid the plunging of the nation into total depression and financial ruin and you sit there at your key board and proclaim his efforts to “stink” based on one economic factor two years into the slow recovery that is recognized by most impartial economists! Ya got a lot of chutzpa my man, especially considering you might not even have a job right now had Obama not done what he did during the last couple of years.

    What did the republican nay-bobs who control most of the wealth ever do for you anyway? Why is taxing them fairly such an evil idea like all the blind sheep who buy into this dis-proven trickle down theory nonsense believe? Do you really think that the accumulation of the nations wealth into fewer and fewer greedy hands is somehow going to make everything rosy and put a chicken in every pot?

    Jeeze man, with an editorial like this one it seems to me you ought to run for the Utah State Legislature. Hell man, you would probably move right into the leadership with great statesmen like Waddoups, Valentine, Bramble, Lockhart, etc, etc. They would all love to have a guy with your writing skills molding their lyin propaganda for the suckers who keep voting the worthless bastards into office!

    • LMA says:

      I get a little (well, more than a little) tired of the fact-free, vitriol-prone revisionist history such as is represented here. Let’s start with “morally bankrupt [R]epublican policies.” (Note the morally bankrupt capitalization of proper nouns – don’t you just hate that?) The economy started hemorrhaging jobs during the real-estate equity crises. For an unbiased understanding of what happened, read G. Morgenson & J. Rosner, “Reckless Endangerment: How Outsized Ambition, Greed, and Corruption Led to Economic Armageddon” (Times Books 2011). The authors are not Republican partisans. They note that in 2005, Rep. Barney Frank responded to the question of whether the government’s push to increase home-ownership rates might result in people buying more home than they could afford and putting themselves in dire straits. “Frank brushed off the questioner. ‘We’ll deal with that problem if it happens,’ he barked.”

      Fannie and Freddie (as government sponsored enterprises) were shielded from effective or meaningful regulation by Democratic Party lawmakers, not the Republicans. It’s a little hard to charge the Republicans with moral bankruptcy and a lax regulatory attitude, when the relevant laxity was created and promoted by Democratic Party policies, driven by fiercely aggressive lobbyists with Democratic Party (not Republican) connections. (Under the direction of a man named James A. Johnson, who owed his position at the top of Fannie Mae to Walter F. Mondale. A morally bankrupt Democrat, don’cha know.) From 1989 to 2009, “Fannie Mae spent roughly $100 million on lobbying and political contributions”, and “Johnson was the financial industry’s leader in buying off Congress”.

      Barney Frank was far from the only Democrat who protected Fannie Mae and Freddie Mac in Congress. Rep. Maxine Waters, seeking to avoid “fundamental change” for the GSEs claimed as early as 2003 that “we were trying to fix something that wasn’t broke.” The authors show clearly how the roots of the crises were sowed in the housing policies of the Clinton Administration.

      Prior to real estate equity coming undone in 2008, there were 14 consecutive months of employment growth for the Bush Administration. But it is easy to blame him for a collapse foisted on the American people by the greedy and morally bankrupt policies of others.

      So, then, Democratic partisans want to say, “well, you can’t blame Obama – he inherited the mess.” But, I’m sorry, you sure CAN blame Obama. He campaigned on the idea that he knew how to fix the problem. Clearly he didn’t. We know that because (1) the economy has recovered much better from similar bubble collapses in the past (the S&L bust and the dot com bust) and (2) none of Obama’s/the Democrats’ predictions about their non-solution “solutions” have come anywhere close to true. Pres. Obama sold the useless stimulus expenditure bills – driving the debt higher and higher – on the basis of job growth expectations far, far better than the 9.2% (!!!) unemployment prevailing today. When we’ve had recessions and financial crises before (see above examples) we’ve ALWAYS been able to come out of them faster and stronger than what we’re seeing now. It’s not happening now because we’re constantly threatening higher taxes, we’re driving up costs, and we’re severely limiting new investment. We told ourselves that padding public payrolls was good economic policy, which turns out (surprise, surprise!) not to be the case. In the meantime, we’ve saddled future generations with a debt which will be to our permanent disgrace for the rest of time.

      Just this week, the Associate Press reported: “A dismal June employment report shows that employers are adding nowhere near as many jobs as they normally do this long after a recession has ended.

      “Unemployment has climbed for three straight months and is now at 9.2 percent. There’s no precedent, in data going back to 1948, for such a high rate two years into what economists say is a recovery.”

      Note the phrases “as they normally do” and “there’s no precedent.” You can’t discount this as just the old whipping boy, Fox News – this is from AP.

      And, FYI, the wealthiest Americans trend Democratic, not Republican. The people who trend Republican are the ones who have, you know, moral values, and the ones who would like to be better off economically than they are now AND are willing to work for it as opposed to the folks that, you know, prefer to sit back and wait for the benefit check to come in the mail or show up on the EBT card.

      “Morally bankrupt.” Sheesh.

  2. Ben Pales says:

    Doug I think Tom has it about right on this one. The only other thing that I would add, is that the President can not create jobs. The administration can set a course that will hopefully stimulate job growth, but that can take years. The only thing that will create jobs, is demand for products. If there is no demand, there are no new jobs created. Unfortunatly the economy grinding to a halt, all of us losing actual or percieved wealth in our homes, and the trickle down effect from that, is what has scared the crap out of most consumers. Therefore, no spending equals job loss. Not quite what your blog equates.

  3. Tom says:

    For a more balanced* look at this national economic situation, check this article out from CNN.

    http://politicalticker.blogs.cnn.com/2011/07/11/american-sauce-maybe-the-economys-not-so-bad-2/#more-166922

    * “balanced” assuming you are not a total tea party/Obama hater nut case who thinks CNN is a Democratic party propaganda machine when they publish stuff contrary to the idiocy on FOX.

  4. Bob Becker says:

    Ah, Doug…. Joining the Hatch Millionaires Tax Break Defense League I see. Might want to take a gander at a recent Bagley cartoon for a different perspective:

    http://www.sltrib.com/sltrib/opinion/52156335-82/bagley-cartoon-eat-facebook.html.csp

  5. Doug Gibson says:

    I’m concerned about the growth of government. I’m not a Hannity clone or Krugman clone for that matter. I’m skeptical that most businesses will move money into U.S. jobs even if they get tax breaks. I agree with Ben Stein that we need to raise taxes for wealthy and end many biz tax breaks such as oil. I see no defenses for the debt commission report or no laments that Obama did not work with his commission, just politics and taunting, which is a lot like DC.

    • LMA says:

      Doug, you might wish to look into the provisions of the tax code that actually encourage corporations to keep jobs and profits offshore. There are lots of economists who think that reform of the corporate tax rate, which is higher here than almost anywhere, would bring an end to the practice of “un-repatriated” corporate profits. And there is considerable historical evidence for the proposition that reduction in capital-gains taxation increases revenue. High capital gains rates discourage profit-taking (which is the taxable event) and keep investment capital frozen. I haven’t been following Ben Stein’s comments, but I would be surprised if Stein were opposed to either of those reforms.

  6. Ben Pales says:

    I son’t think that my statement had anything to do with politics or taunting….

  7. Steven Hallowell says:

    Doug, Let me think back a little——Oh yes, thatis right, the person responsible for the unemployment being what it is today would be your conservative President Bush. This President is doing what he can, attempting to get things going again, and consistently having to butt heads with your drones in the GOP party. The thinking of your associates in your Party is my way or the highway! Apparently it worked with the Presidential Election electing Obama as President. Their egos will do nothing but prevent them from getting elected again. PROPOSALS to help with unemployment are NOT forth coming from Republicans, the main cause of unemployment. BUT, the Rich are still Rich and getting Richer!

  8. Owain says:

    Meh. Obama’s been in office over 3 years, tripled the debt, crippled the economy with his policies, and you guys are still blaming Bush? What sad, pathetic creatures you all are.

  9. Lang says:

    I remember Republicans screaming that the Bush Tax credits were vital because the tax credits were supposed to create jobs. Where are those jobs that House Republicans said would be created by the extended Bush Tax credits?
    Doug what house bills have been forwarded by Congress to spur job growth?
    I see that you can point fingers and complain, but the Republican House of Representatives has not proposed even one bill to create job growth. I will tell you what. You seem to want Obama to lead please call your congressmen and ask them to let Obama lead the way on this issue.
    Either put up or shut up because pointing fingers is just “populist clabber” without the motive to actually be part of the solution regardless of what side of the isle comes up with the plan.

    • LMA says:

      I don’t know what “Bush tax credits” you mean. I think you’re referring to the legislation adopted on a bipartisan basis, and signed by President Obama, to continue in effect the same tax rates as were already in existence.

      So, no, if you “remember” that the Republicans said that continuing the exact same tax rates in effect would create jobs, you clearly remember wrong. This comes as no surprise, but I guess that’s neither here nor there. What they said was – and President Obama said the VERY SAME THING at the time – what they said was that letting income taxes go up across the board in January 2011 would have had a negative effect on what appeared to be a very weak economic recovery. He was right and they were right. The recovery remains very weak to this day, because the country’s only idea of economic policy right now is to figure out how to drive UP employment and other costs and how to RESTRAIN net (after tax) return on investment. This is absolutely no way to run a recovery.

      Hope that clears it up for you.

      • Lang says:

        No actually I think you are ignoring facts and exaggerating misconceptions but … that I know that is how you build your personal narrative. You always have an airtight explanation …confirmation bias is a strong suit with Mormons..

        • Owain says:

          Can’t think up a convincing argument, so you need to drag out a Mormon slur? I’m sure that falls under several different catagories of logical fallacy. Well played.

          But LMA is correct. Republicans never said that the extending the tax cuts would create new jobs, to my knowledge. How would that work, anyway? When the tax rates were extended, that just meant that nothing changed with respect to tax rates. Taxes stayed the same, and didn’t go up. So explain to me how not changing tax rates would create new jobs. If the rates were repealed and taxes went up, then sure, jobs would be lost, even more than they have already, which everyone should agree would have been a bad thing.

          But unless you can provide a link with a quote from prominent Republicans saying that extending the Bush tax cuts would create jobs, I’m throwing the Bullshit flag on the play.

        • LMA says:

          Lang’s idea is that when the facts aren’t in his favor, he just sneers. Of course, this persuades no one, but it makes himself feel so much better. Pathetic, really.

  10. Owain says:

    “Where are those jobs that House Republicans said would be created by the extended Bush Tax credits?”

    Those jobs have been smothered by the uncertainty in the economy brought about by Obama Administration policies. What business wants to add to their payroll when they don’t know if they are going to be the next industry targeted by Obama for demonization. Obama opens his mouth, and jobs die. This month, he targeted corporate jets.
    http://dailycaller.com/2011/07/06/jet-industry-furious-at-obama/
    As the article notes, “General Aviation Manufacturers Association reports the industry provides an estimated 1.2 million jobs and pumps more than $150 billion into the U.S. economy each year.”

    Nice job, Barry. Let’s put all that at risk so you can get your ‘class warfare’ rhetorical points across.

    Google the phrase, ‘obama anti business’ if you’d like to see further examples of how the policies of the administration kills jobs.

    Where are those jobs? They were killed by the Obama administration policies.

  11. Ben Pales says:

    Owain it must be nice to live in your myopic little world. OOOhhhhh Obama is targeting corporate jets, ooohhh my business might be next. Are you kidding me? What’s uncertain in business right now, and I know, because i live in the business world, is who will be buying your product, and where can I get the capitalization to keep my business afloat. Not, oh cra,p I wonder if the White House will mention my products. Don’t be such a ninny.

  12. Owain says:

    Well Ben, what is uncertain in business right now, of which I’m sure you are well aware, super business man that you are, is what is the impact of the new health care laws and how much more will you be forced to pay for each employee, what are the new business taxes that may be imposed, what are the new regulatory fees being considered, and yes, what will interest rates be doing, and will you be able to find a bank willing to lend to you.

    The problem is not Obama mentioning your business, but mentioning how your business is going to be hit with new taxes in the sake of ‘fairness’ so that he can continue ‘sharing the wealth’.

    ‘Sharing the wealth’ is all well and good when other people’s money is being shared, but sooner or later you run out of ‘other people’s money’ and then they come for YOUR money. If your industry is particularly lucrative, expect to be the next on the list to be gouged, because that is only ‘fair’, don’t you think? If your business isn’t all that lucrative, expect them to come for you anyway. All that wealth isn’t going be shared by itself, is it?

    If you don’t think that is true, maybe you should examine your own myopic little world a little more closely.

  13. Ben Pales says:

    Thanks for the compliment Owain. I am pretty super. Yes we in the business world are all shaking in our boots about what this socialistic president is going to do next. We all can barely survive due to the overwhelming new taxes and regulations that have been heaped upon us in the last 2+ years. Warren Buffet and I are both wringing our hands about all of this wealth sharing from our socialistic president. Oh my goodness they are going to take all of our money and give it to the poor, oh no what to do.

    • Owain says:

      Sure thing Ben. I’ll bet each and every one of the 12.5 million people currently unemployed in the United States are chuckling at your rapier wit. Or maybe not. Maybe they are less than enthused at Obama’s proposed $1 Trillion in new taxes given the current economic climate, because like me, they realize that taxes rely on economic activity of productive individuals and profitable companies, not as liberals seem to think, The Money Fairy.

      But by all means, keep on doing whatever it is you are doing to that chicken. The country is in the very best of hands.

    • LMA says:

      This is all very sarcastic, Ben, I get that. But is there a point to it?

      You’re in favor of redistribution of wealth. I get that too. One of the interesting elements of the current debate is whether we are starting to find the limits of that principle. I don’t know if you have any comments on that, or if you just stick with nastiness. But look at the statistics on who pays what percentage of the income taxes, and what percentage of people pay no income taxes at all. (Top 10% of households pay 70% of income tax; bottom 50% pay only 3%.) How much further do you want to push that? I’m just asking. Since 1965, spending per household has grown by nearly 162 percent, from $11,431 in 1965 to $29,401 in 2010. How much further do you want to push that? I’m just asking. In 2008, publicly held debt as a percentage of the economy (GDP) was 40.3 percent, nearly four points below the postwar average. Since then, the debt has increased more than 50 percent, and the President’s FY 2012 budget would more than double it to 87.4 percent by 2021. Are you comfortable with that direction? I’m just asking.

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