As 2014 begins, President Barack Obama’s approval rating is at its lowest point in his five-year tenure. Imagine where it would be if the establishment press treated him the way it did George W. Bush.
The president’s media apparatchiks are propping up what remains of the president’s popularity with five myths.
1. The economy has become strong, and is getting stronger.
Media reports have been calling recent job gains “robust.” Hardly. 2013′s estimated job growth of almost 2.4 million is still only 60 percent of what was achieved annually on a population-adjusted basis for a full six years during the 1980s. (See chart below.)
It’s bad enough that payroll employment is still 1.3 million below its January 2008 peak. It’s worse that employment in the Household Survey is 2 million shy of where it was in that same month. If we’re lucky and this plodding progress continues, it will have taken almost seven years for that more comprehensive measure of employment to return to where it was before the recession began β and several more years, if ever, before a recovery in employment catches up to eligible adult population growth.
Almost 40 percent of the reported economic growth during the first three quarters of 2013 came about because of inventory build-ups. Tentative results from the recent Christmas shopping season show that consumers haven’t been buying enough to significantly deplete those stockpiles. That does not bode well for production during the fourth quarter or early 2014.
2. The government’s finances have stabilized.
We’re supposed to be impressed that the Federal Reserve will only be creating $900 billion a year in funny money instead of $1.02 trillion. The truth remains, as outgoing Fed Chairman Ben Bernanke told Congress in July,Β that without this historically unprecedented level of artificial stimulus, “the economy would tank.”
The Fed’s decision to barely taper its stimulus to $75 billion per month from $85 billion is really a vote of no confidence in the government’s ability to survive on its own. Before the taper, the Fed was financing $540 billion, or about half, of the government’s annual trilion-dollar 2012 deficit (the rest goes into sopping up mortgage-backed securities). The taper only reduces that to $480 billion, which is about 80 percent of the government’s projected fiscal 2014 deficit. This means that Bernanke & Co., soon to be Janet Yellen & Co., believe that precious few others want to own additional Treasury securities. They are probably right.