Archive

Why Obamanomics earns an ‘F’ | TribLIVE.com
News

Why Obamanomics earns an ‘F’

What’s President Obama’s record regarding economic growth during his five years in office, compared with the average growth rate in economic recoveries from U.S. recessions since the 1960s?

Answer: GDP growth in the Obama recovery is half the growth rate during the other recoveries. On a test, that result would earn an “F.”

Similarly, Obama’s current approval rating on the economy is 42 percent — again, an “F.”

In its May 1 editorial “The Growth Deficit,” The Wall Street Journal provided the official government statistics on annual growth rates during U.S. economic recoveries, starting with the current recovery: “According to Congress’s Joint Economic Committee, average growth over the 19 quarters of this recovery has been 2.2 percent, with total economic growth of 11.1 percent. The average for all post-1960 recoveries is 4.1 percent, with total growth of 21.1 percent. The average for the Reagan expansion was 4.9 percent and total growth of 25.6 percent.”

The Reagan expansion — fueled by across-the-board income tax cuts and business deregulation — cut the level of unemployment in half, from 9.7 percent in 1982 to 5.3 percent in 1989, reduced the poverty rate and slashed the inflation rate to 3 percent, reversing President Carter’s three years of double-digit inflation that cut the purchasing power of American households by nearly 40 percent.

Additionally, the economic achievements of black Americans reached all-time highs during the Reagan years, 1981 through 1989, with an expansion of black employment and real (adjusted-for-inflation) income.

Obama, seemingly more committed to the politics of redistribution than the economics of growth, refuses to acknowledge the aforesaid record of economic successes and failures.

During the first quarter of this year, the slow Obama recovery dramatically weakened, with the expansion of the economy dropping to an annual pace of near zero, to a meager annual growth rate of 0.1 percent during January, February and March.

Further, demonstrating a clear lack of confidence in the business community, the drop in business spending on new equipment in this year’s first quarter was the largest decline since 2009.

Most recently, the Labor Department estimated that the economy created 288,000 net new payroll jobs in April. Investor’s Business Daily reports that the 288,000 figure is impressive “until you consider that a broader job survey of households shows a decline of 73,000 jobs in April.”

The Labor Department also reported that the nation’s unemployment rate dropped to 6.3 percent in April, down from 6.7 percent in March. Again, the headline doesn’t tell the whole story.

Labor Department statistics show that 806,000 people left the labor force in April, dropping the labor force participation rate to 62.8 percent from 63.2 percent, the lowest participation level since 1978.

Explains Steven Pressman, professor of economics and finance at Monmouth University in West Long Branch, N.J., “My first area of concern is that the 0.4 percent decline in the unemployment rate is due to the 0.4 percent decline in the labor force participation rate.”

In short, just the sidelines are getting crowded — not the workplaces.

Ralph R. Reiland is an associate professor of economics at Robert Morris University and a local restaurateur ([email protected]).


TribLIVE commenting policy

You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.

We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.

While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.

We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers

We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.

We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.

We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.

We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.