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Offensive Expectations

Since when is 6.5 percent unemployment two years from now a tolerable target?

by
Tom Blumer

Bio

July 20, 2013 - 12:28 am
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obama_unemployment_binoculars_big_7-17-13-1

Five years into the POR (Pelosi-Obama-Reid) economy, our government’s lowered expectations, eagerly embraced and endorsed by its media apparatchiks, are arguably more offensive, intolerable, and damaging than the failed government policies which have kept it in effect.

Those policies, best understood as the final proof of Keynesianism’s collapse, have begotten awful results. Supposedly designed to generate robust economic growth coming out of the recession, they have instead led to the weakest post-downturn growth since World War II, with trillions of dollars in collateral damage.

Three decades ago, during the first four years after the economy emerged from an awful recession while facing a far worse economic landscape — 13 percent inflation, 20 percent-plus prime interest rates, and almost 11 percent unemployment — the economy grew by over 21 percent in real terms. Assuming it ekes out the 1.7 percent annualized growth analysts predict during this year’s second quarter, the POR economy’s four-year post-recession growth will only be 8.5 percent. If the economy would have replicated its Reagan-era performance during the past four years, growth in Gross Domestic Product (GDP) would have been 2-1/2 times greater. That breathtaking difference works out to over $6,000 per person in today’s dollars, or over $24,000 for a family of four:

ReaganVsObamaPerCapitaThru2Q13

This leads to a point which can’t be repeated enough: The recession as defined by Obama cheerleader Warren Buffett in 2010 still hasn’t ended. Buffett’s benchmark, which explains why the average American correctly feels that the recession is still here: “I think we’re in a recession until real per capita GDP gets back up to where it was before.”

If we’re lucky, real per capita GDP might get back to where it was in calendar 2007 this year. Under Reagan, per capita GDP fully recovered within one year of the recession’s end, and was 13 percent higher than its pre-recession peak by Year 4.

As demonstrated last week, the recession’s onset can be traced to early June 2008, the point at which it became clear that Barack Obama, armed with an “energy-starving, heavy-taxing, wealth-redistributing, business-hostile agenda,” would become the Democratic Party’s presidential nominee and that campaign’s favorite to win in November. Enough businesspeople, entrepreneurs, and investors to make a difference cancelled any plans they might have had for expansion and additional hiring, and in many cases scaled back their operations in an attempt to survive the coming storm.

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All Comments   (6)
All Comments   (6)
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So much misery could have been avoided if people had listened to what obama was saying when he first ran for the presidency. He was not qualified for the job and he certainly hasn't grown into it.
39 weeks ago
39 weeks ago Link To Comment
The post-adolescent emotional attachment that this administration's economic policy wielders have is staggering. You can't make a 7 a 5 simply by wishing it to be so. By the same token, Unicorns and Utopia are fictional. Poverty and taxes are real. But trying to get unicorns and Utopia THROUGH taxes is downright delusional.

No matter what anyone says, increasing the money supply devalues the money.

Destroying jobs lessens the ability to GET money.

Giving money away to people who don't work increases contempt from the people who work.

This regime is intentionally fighting a multi-front war on the destruction of the way the US does business. It is purely intentional to bring about the cry from the people to have the government fix it.

Add to that, when you combine the government's intentional ignoring of the rules of money, with the inept methodology of how they want to "fix" everything, you have a cavalcade of stupidity; All the "best and brightest" arguing how to make it work while the single, solitary individual ignores them and side-steps their clever, academically-approved repairs and goes about his business.

This is what they did in the former Soviet Union. This is what's coming here. It's intentional.
39 weeks ago
39 weeks ago Link To Comment
My local newspaper recently celebrated the marvelous news that my county's (Westchester, NY, one of the 10 richest in the nation) unemployment rate has plummeted to 7.5%, actually LOWER THAN THE NATIONAL AVERAGE! I despair of my sanity.
39 weeks ago
39 weeks ago Link To Comment
It is offensive, but it is both parties' failures to even talk about it openly or honestly or rationally. It's the end result of fifty years of outsourcing. Perhaps a bust at some point was unavoidable and it was praiseworthy to put it off as long as we did, by hook and by crook (literally). Then again, perhaps not, on both points.

Paul "Blithering" Krugman makes a distinction between a recession and a crash/market failure, 2007/2008 being the later. I grant him the point, insofar as it matters. He claims previous crashs have much longer recovery charts than previous recessions. Maybe so. It gets dicey when you try to categorize 1929/1933 and what followed, compared to 2007/2008 etc.

There may be some Seldonian time constants in all these things, but healing does not take place by magic, and there is mighty strong disagreement on what it does take place by. On this, I am at least 540 degrees away from Krugman, or he is at least 540 degrees away from reality.

Look, it's quite simple, all the jobs are now in China, and there is no US recovery until about 10,000,000 jobs come back.

Have a nice economy.
39 weeks ago
39 weeks ago Link To Comment
Remember that the Dems controlled both chambers of Congress in '07 & '08, that's the place where appropriations are written, somehow it was all one man's fault, Bush. The deficits in large part were the funds distributed to fedral agencies and state and local governments. You know what they do with them.
Unemployment down to 6'5% in two years? Sure, I'll bet my life on that.
39 weeks ago
39 weeks ago Link To Comment
Where are the GOP ads about "Spread the Jobs". The Democrats and Obama are all about "Spread the Wealth" so voters need to be told that spreading the wealth is just making you part timers. Enjoy!
39 weeks ago
39 weeks ago Link To Comment
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