Obama Dragged Down By Chaos At Home And Abroad, Not By The Economy

Photo credit: Barack Obama (Flickr)

“Why do you think President Obama’s job rating is falling, even though the economy is recovering?” the interviewer asked.

It’s a fair question, even though the economy declined 2.9 percent in the first quarter, even though most jobs created in June were part-time, and even though labor force participation remains low.

The fact is that the economy is growing, however slowly; jobs are being created, and the unemployment rate is heading down toward what economists consider full employment. And still, the president’s job rating languishes.

What’s wrong with the question is an assumption embedded within it, that what voters seek most from government and political officeholders is economic growth. I think there’s something they value even more: the maintenance of order.

This isn’t what I was taught in political science classes. Political scientists who had grown up in the 1930s Depression taught that politics was about “who gets what, when, and how.”

Operating on that assumption, political scientists developed rules that explained past election outcomes as a function of economic variables — how much the economy grew in the second quarter of the election year, for example.

Those rules generally worked pretty well at predicting future elections — until they didn’t.

What they don’t explain very well are the political upheavals that come when voters perceive that the nation and the world are in disarray. Americans, blessed with a mostly happy history, tend to take fundamental order for granted. They recoil and rebel when things spin out of control.

Example: The political scientists taught that the big shift toward Democrats in 1874 was a response to the financial panic of 1873. Sort of like the Great Depression.

But further study convinces me it was a rebellion against Ulysses Grant’s military occupation of the South to protect blacks’ rights. Voters tired of violence voted for the anti-black Democrats, who held House majorities for 14 of the next 20 years and won the popular vote for president in five of six presidential elections in those years.

Or consider Republicans’ “back to normalcy” victory in 1920. This was a response to disorder at home (dizzying inflation and depression, waves of strikes, terrorist bombings) and abroad (Communist revolutions, continued fighting in Russia and the Middle East, rejection of Woodrow Wilson’s League of Nations).

Closer to our times, Jimmy Carter was rejected in 1980 as the nation faced not only stagflation (inflation-plus-recession) at home but also an “arc of instability” abroad.

Americans, unlike voters in many other countries, demand the maintenance of order in the world as well in their own nation. From the early days of the republic, there has been an unspoken awareness that what happens in the world affects their own lives.

In the 19th century, American merchants went out into the Mediterranean, American whalers to the Pacific, and American missionaries to China and the Middle East.

American troops followed. The Navy and Marines went after the Barbary pirates on the shores of Tripoli. American gunboats opened Japan to the world in 1854 and were stationed on rivers in China from the 1840s to the 1930s.

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This post originally appeared on Western Journalism – Informing And Equipping Americans Who Love Freedom

Obama Is Crushing The Reagan Link, And Putin Knows It

Photo credit: Barack Obama (Flickr)

Across his remarkably successful presidency, Ronald Reagan repeatedly made the link between the U.S. economy and U.S. international security and defense. He consistently argued that weakness at home leads to weakness abroad.

Reagan was aiming at the dismal Carter years. But he understood for all times that economic strength at home sends a powerful signal for international security overseas.

When Reagan went to Reykjavik to meet with Gorbachev, he believed the resurgent American economy would hammer the nails in the coffin of Soviet communism. And he explained to Gorbachev that if the Soviets didn’t come to the negotiating table with nuclear weapons, the U.S. would out-produce them on nukes and with technological superiority. Similarly, Reagan would not give up his vision for strategic missile defense.

And in both cases — building nukes and SDI — Reagan knew the American economy had the resources capable of achieving these goals, while the sinking Soviet economy couldn’t match us.

In the end, the Soviet system imploded in one of the greatest reversals in world history. Freedom won. Communism lost.

Now, circumstances are somewhat different today. But the horrible Malaysia Airlines crash in Ukraine highlights some worrisome facts about American-Russian relations. Mitt Romney was right. Russia is our biggest threat.

We know that the Malaysian plane was brought down by a ground-to-air missile fired from Russian-made SA-11 weapons run by pro-Russian Ukrainian rebel terrorists. We also know that Russia is fighting a proxy war with the U.S. in Ukraine, and that Russian special forces are leading the terrorist movement in Ukraine. We can add to this the proxy war fought by Russia in the Middle East, with its main ally Iran, and the fact that Russia is engaging in state-sponsored terrorism.

Whether President Obama understands all this, I don’t know. His policies have been alternatively passive (Libya, Egypt), incoherent (Russian reset), and feckless (Syria). But the fact that the current U.S. economic recovery is the slowest in post-WWII history — spanning 70 years — is surely a key factor in Vladimir Putin’s adventurism.

This brings us back to Reagan’s link. Putin may recognize that Russia’s economy is a thin deck of cards. But he surely doesn’t fear the weak American economic position. Ditto for the broken economic dictatorships in North Korea, Iran, and Venezuela, and the rising economic dictatorship in China. They don’t fear us.

In fact, America’s economic weakness is so worrisome, one suspects our friends are losing respect for us, too. Whether in Europe, Asia, Latin America, or Israel, our allies know that America has been the backstop for freedom. If not us, who?

But can they say that now?

As I testified this past week before the congressional Joint Economic Committee, at 2.1 percent average real growth, the U.S. is lagging far behind the 4.1 percent average recovery pace of the post-war business cycles. The Reagan recovery averaged 5 percent annual growth at the same point as the Obama recovery.

Obama’s stock market from the depth of the meltdown does beat Reagan’s market and the post-war average for equities. But here’s a very worrisome trend. Over the entire post-war period, average yearly growth has been 3.2 percent. And in the 1980s and ’90s, growth was 3.7 percent. Since 2001, however, under Republican and Democratic presidents and congresses, as the dollar lost over a third of its value, growth has dropped to only 1.8 percent annually. Something has clearly gone very wrong.

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The views expressed in this opinion article are solely those of their author and are not necessarily either shared or endorsed by WesternJournalism.com.

This post originally appeared on Western Journalism – Informing And Equipping Americans Who Love Freedom

Obama’s America: Number Of Young Adults Living With Parents Just Passed A Shocking Milestone

Photo Credit: Ojedamd (Creative Commons)

The Obama administration has been intensely criticized by many who contend its leftward trajectory has stunted economic growth and kept unemployment levels unreasonably high.

Recent studies show the startling effect these policies have had on the traditional American family structure. According to a Los Angeles Times report, the scarcity of good jobs has been a major factor in a record high number of adults forced to live with parents to make ends meet.

Nearly one in four Americans between the ages of 25 and 34 now live with parents or grandparents, the study found.

That number has spiked in just the first six years of Obama’s presidency. In 2007, just 18.7 percent of those in the same age group shared a home with older relatives.

More than twice as many Americans live in so-called multigenerational households now compared to 1980. As of 2012, a staggering 57 million citizens found such an arrangement optimal.

Perhaps the most astounding discovery revealed in the study was a comparison between young adults living with parents and elderly Americans living with their children.

In the U.S., large numbers of middle-aged adults have typically cared for their aging parents in a common home. While the rate of such arrangements has increased in recent years, less than 23 percent of those over 85 years of age currently reside with their children – a lower percentage than young adults living with parents.

As expected, the number of multigenerational households saw an increase correspondent with the 2008 recession.

Despite the fact that the Obama administration asserts the American economy is in recovery, however, this way of living has only continued to rise.

Photo Credit: Ojedamd (Creative Commons)

This post originally appeared on Western Journalism – Informing And Equipping Americans Who Love Freedom

Obamanomics’ Epic Failure

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The strongest component of the Federal Reserve’s Leading Economic Indicators currently is stock market performance. Such equity strength is more a case of artificial stimulation by the Federal Reserve through Quantitative Easing and the cozy relationship between Washington and Wall Street than it is a sign of a healthy economy or White House policies that have been conducive to growth. After nearly six years of President Obama’s economic policies, there is unmistakable evidence that White House policies have severely hampered economic viability.

The middle class real median household income in 2012 was less than it was at the end of the ’80s, and it’s down 9 percent from its high in 1999. The biggest portion of that decline, 8.3%, came in just the past five years.

The median net worth of a family in 2010 was $77,300, compared to $126,400 just three years earlier. In 46 of our 50 states, the poverty rates have increased over the past six years; and the national poverty rate is over 15% for the fourth year running. The last time that happened was in 1965. More and more families are dropping from the ranks of the middle class into poverty.

One of the greatest factors adversely affecting median household income and net worth is the loss of jobs and extended unemployment. According to the Bureau of Labor Statistics (BLS), the Participation Rate, which is represented as a ratio or a percentage of the total population, is at the lowest levels in 50 years–with about 62.8% of the population working. According to the BLS U-6 data, 13% of the population is still unemployed or underemployed–and marginally attached to the labor market.

The job situation is directly affected by administration policies and will not improve appreciably until the cost of doing business starts dropping. Last year, the Small Business Administration reported that regulation costs American business $1.75 trillion per year–and costs small businesses as much as $10,585 per employee. Just the costs of Obamacare, Financial Regulatory Reform, and new EPA regulations are projected to increase that cost per employee as much as 30%, according to Investor’s Business Daily.

In 2012, the President said, “This country doesn’t succeed when we only see the rich getting richer. We succeed when the middle class gets bigger. We grow our economy not from the top down, but from the middle out.” He was correct. But none of his policies have done what he gives such great lip service to.

In spite of the president’s consternation over income inequality, the income gap has increased exponentially under Obamanomics. As MSN Money declares, “The top one percent of Americans — those earning above $366,623 a year — have taken 81 percent of the fruits of the recovery. And the top 0.01 percent — earning about $8 million a year — took an astonishing 39 percent of the growth.”

Let’s look at the economy in general. The National Bureau of Economic Research officially scored the recession as ending in June 2009, just five months after Obama’s inauguration. Historically, the nation has rebounded with significant growth coming out of a deep recession; but this has been the most tepid recovery in the last 100 years, according to Forbes. They point out: “Under President Obama, the American people have now suffered the worst 5 years since the Great Depression.”

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The views expressed in this opinion article are solely those of their author and are not necessarily either shared or endorsed by WesternJournalism.com.

This post originally appeared on Western Journalism – Informing And Equipping Americans Who Love Freedom

Under The Good Jobs-Report Hood

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Good news for the American worker: Employment in June surged 288,000, with a 262,000 gain in the private sector, easily beating the consensus forecast of 215,000 new payrolls. This marks the fifth consecutive monthly increase of 200,000 or more jobs, the best five-month stretch since early 2006. As for the unemployment rate, it dropped from 6.3 to 6.1 percent.

Stocks surged on the news, with the Dow closing above 17,000 for a record high.

And the good news doesn’t end there: The small-business household survey gained a big 407,000, while the number of unemployed fell by 325,000. These job gains were spread wide across the economy, as the diffusion index jumped from 62.9 to 64.8 percent. And although lower-paying retailers counted for a big 40,000 jump, higher-paying professional and business services increased 67,000.

But there were some important glitches in this good-news report.

For one, worker wages remained soft, rising only 2 percent over the past 12 months. And total hours worked are 2.1 percent ahead of a year ago, suggesting that overall income and nominal GDP are growing at a relatively slow 4-percent rate.

Meanwhile, the U6 unemployment rate, which includes part-time workers who want better full-time jobs or folks who have given up, dropped only slightly to 12.1 percent. That’s still a historically high rate. And the labor-force participation rate was unchanged at 62.8 percent, a 30-year low.

Wall Street Journal editor Phil Izzo makes a disconcerting point: The good way for unemployment to fall is for more people to find jobs. But the bad way is for more people to give up looking for work altogether.

Unfortunately, Izzo notes that while 2.15 million people gained employment in June, 2.35 million dropped out of the labor force. “In all but two months since December 2008, more unemployed have dropped out than found jobs,” writes Izzo.

So underneath the hood of the strong June jobs report, we still find big problems with the U.S. jobs situation.

Representative Kevin Brady, chairman of the congressional Joint Economic Committee, points out that compared to the average of post-1960 recoveries, this one still has a private-sector jobs gap of 5.8 million. To get back on track, the economy needs to add 374,000 private-sector jobs every month through the end of 2016.

This has always been a rather lopsided economic expansion. For example, auto sales surged to 16.9 million in June, a very good number. And the energy sector has been strong for many years. But consumer spending actually fell in April and May. And long-term business investment — a huge job creator — remains in the doldrums.

The latest Business Roundtable survey shows a slowdown in capex spending plans. The National Association for Business Economics predicts only a bit more than 3 percent business-investment growth. And the National Federation of Independent Business says that only 24 percent of small-business owners plan capital outlays in the next three to six months.

The paradox is, while companies seem more willing to hire, they are not willing to make long-term investments in the economy. It’s not hard to guess that this corporate caution stems in large part from tax and regulatory uncertainties, and frankly, a White House that is anti-business.

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The views expressed in this opinion article are solely those of their author and are not necessarily either shared or endorsed by WesternJournalism.com.

This post originally appeared on Western Journalism – Informing And Equipping Americans Who Love Freedom