The GDP (Gosh-Darn Pathetic) Economy
The miserable, deliberately imposed "new normal."
May 7, 2014 - 11:08 pm
As the POR (Pelosi-Obama-Reid) economy nears the end of its sixth year, one thing we can say for certain is that the “fundamental transformation” President Barack Obama, Senator Harry Reid, Congresswoman Nancy Pelosi and their party have long wished to impose on these United States has made measurable progress.
Democratic Party housing policies caused the recession. Obama’s conduct during the 2008 campaign and the presidential transition period lengthened it. His administration’s failed 2009 stimulus plan, followed by over five years of cronyism, demagoguery, and regulatory zealotry — now briskly advancing into bald intimidation — have slowed the alleged recovery to a crawl and exacerbated the very income inequality the left routinely denounces.
If there was a record for most economic reports issued which are worse than they initially appear, this bunch would hold it by a wide margin.
An obvious example of a bad number made worse after just a little investigation is in the April 30 report on first-quarter economic growth.
The government’s Bureau of Economic Analysis told us that the nation’s gross domestic product grew by a virtually imperceptible 0.025 percent (0.1 percent annualized). Even assuming no population growth, an equivalent result in the employment arena would see a company grant a 10 cents per week raise during each of the next four quarters to a worker currently earning $400. But of course, the U.S. population did grow, and real per capita GDP fell. Fixed investment, the factor which above all others drives genuine long-term growth and prosperity, contracted.
Obamacare defenders celebrated one component of the result, claiming that the first quarter of the statist health regime’s implementation was the only thing that kept the economy from moving into contraction. Applying just a little common sense reveals that Obamacare really sent the economy into decline.
Yes, health care spending increased sharply. But much of it likely was incurred by the millions of new Medicaid patients roped into the system by HealthCare.gov and the state exchanges (at least the ones, unlike Oregon’s, that work). Long-term studies have shown no significant improvement in medical outcomes in that program. That extra spending, higher Obamacare-caused insurance premiums (buried in the “financial services and insurance” line item in the GDP report, but likely responsible for almost all of its increase), and higher outlays on utilities during the rough, non-global warming winter caused all other forms of consumption to flatline.
In layman’s terms, Americans during the first quarter more than likely spent a whole lot of extra money on things which on the whole didn’t make them any better off, keeping them from purchasing many useful things they ordinarily would have bought. In the real world, Americans’ standard of living noticeably declined.
At first glance, Friday’s employment report from the Bureau of Labor Statistics seemed like good news. The economy added 288,000 seasonally adjusted payroll jobs, and the unemployment rate dipped to 6.3 percent. Again, a surface scratch reveals a largely ugly reality.
As has been the case throughout the nearly five years of alleged recovery, a wildly disproportionate number of the jobs added went to those in low-wage occupations, including temporary help services (24,000) and “food services and drinking places” (33,000) — a line item which, based on a report from the left-leaning National Employment Law Project, should be renamed “fast food services.”
So 1.1 million of the 7.8 million net jobs added since the recession as officially defined ended in June 2009 have gone to temps. Employment in that sector has increased during that time by 63 percent, while payroll job growth in all other occupations has grown by a paltry 5.2 percent. Those who argue that employers haven’t changed their staffing behavior as a result of Obamacare routinely ignore this ongoing structural change in the workforce.