Thirty-one months after Barack Obama’s inauguration, the nation has come down with a serious case of irregularity. It reveals itself in so many areas it’s impossible to enumerate them all. The three most visible manifestations of irregularity can be seen in the economy, energy, and in the administration’s exercise of bureaucratic power.
There’s nothing regular about how the economy has performed during the past three years. That’s when what I have been calling the POR (Pelosi-Obama-Reid) economy, more recently tagged the fear-based economy, began. Nancy Pelosi, Barack Obama, and Harry Reid promised to fundamentally change how the economy operated. To a large extent, they’ve gotten their way, and it’s not very likely that an opposition party controlling only one-half of one branch of government will be able to do much about it in the next seventeen months.
What a horrific change it has been. Until now, as Investor’s Business Daily graphically demonstrated in an August 26 editorial, every recovery since World War II has seen the economy bounce back to where it was before the preceding downturn in one, two, or at most three quarters. Under Obamanomics, we’re currently at eight quarters and counting since the most recent recession ended — and we’re still not there, regardless of whether you believe it began in December 2007, as the National Bureau of Economic Research contends, or in July 2008, as the normal definition of the word would dictate.
Here it is, graphically per IBD, and numerically per yours truly:
The numbers are even worse if you look at what has happened to the private sector, which has shrunk by over 1% since the end of 2007. Warren Buffett, who paradoxically insists that he’s not taxed enough while his firm keeps fighting with the IRS over tax claims going back to 2002, has stated that as far as he’s concerned, the economy won’t fully recover until “real per capita GDP gets back up to where it was before.” By the Buffett benchmark, we’re still in hole by over 3%.
If second-quarter growth stays at an annualized 1.0% in its final revision, and if the third quarter is at or above 0.5%, it will have taken nine quarters for the economy to officially recover, three times longer than any other post-World War II recovery. Keep in mind that those are two very big ifs. Many prognosticators believe that second-quarter growth will take another hit in the government’s late-September revision. Others, including 2001 Nobel Prize winner Michael Spence and lefty Robert Reich, have recently adjusted their odds that we’re either already or about to be in a double-dip recession to 50-50. Pimco’s Bill Gross says that the double-dip odds are “better than 50-50.” Clearly, anything beyond the mildest downturn will push the economy further behind what by historical standards is already an ancient original line of scrimmage.
Keynesian deficit spending in overdrive, while clearly a major contributor to the current malaise, doesn’t deserve all of the blame. The Obama administration’s abuse of Keynes’s theories in its stimulus plan’s energy “investments,” as well as its overall irregular energy policy, deserves dishonorable mention.
The American Recovery and Reinvestment Act directed billions towards solar energy companies and solar projects. During the first five months of 2009, before it could have been influenced by stimulus dollars, solar accounted for 0.132% of all U.S. energy production. Through May of this year, that percentage jumped to, uh, well, 0.145%. That may be the high-water mark. Solar companies are either going bankrupt or getting bought at fire-sale prices. A significant percentage of production is moving to China and elsewhere overseas. Thousands of U.S. jobs have been lost.