Our Lowered Economic Expectations
The Dow Jones Industrial Average recently reached 10,000 again, rising 50% since March and reclaiming a major market milestone. September job losses were also less than expected, keeping unemployment under 10%. Moody’s, Google, and even the New York Times say the recession is over.
That means mission accomplished, right? Surely President Obama deserves the Nobel Prize in economics too, or at least a day off from the never-ending criticism spewing forth from far-right outfits like the Atlantic and U.S. News and World Report.
Unfortunately, as usual, reality has to intrude on this president and his cheerleaders. In fact, the DJIA closed over 9,000 on January 2. Then the president came into office, passed the so-called stimulus, and immediately attacked the finance, energy, tourism, health care, and automotive industries -- and where did the Dow go? It went to 6,500 by March.
In the 1980s and 2000s, it became part of the narrative to criticize both Reagan and Bush for the slow job growth (exaggerated into the “jobless recovery”) and an unequal distribution of wealth that helped those on Wall Street at the expense of Main Street. Reaganomics was a dirty word among liberals, even as Ronald Reagan’s policies were pulling the country out of Democratic malaise and stagflation.
Now we have Obamanomics, which has no jobs and no recovery. In May, unemployment among adult workers with a high school education was 10.0%. In September, it hit 10.8%. For African-Americans it is up from 14.9% to 15.4%. For Hispanics it is stuck at 12.7%. Nearly one million homes went into foreclosure in Q3, an all-time record.
Dow 10,000 also highlights the disconnect between Main Street and the connected firms on Wall Street. Goldman Sachs, which converted to a bank at the 11th hour to become eligible for bailout funds, is paying out $23 billion in bonuses. JP Morgan Chase, another corporate welfare queen, just had a blowout $3.6 billion quarter. Even the Obama cheerleaders at CBS and AP are raising eyebrows, noting that Treasury Secretary Tim Geithner talks to representatives of these and other Wall Street firms on a daily basis.
In early September, Vice President Biden was laughed at when he said the stimulus is working better than expected. Now we have to wonder if he was talking about his friends in the finance industry and their annual bonuses.
Although politics is covered by the media as a horse race, at its heart it is about the choices we make as a society and their consequences. None has stated this better than Charles Krauthammer, whose op-ed titled "Decline Is a Choice" perfectly describes the crossroads we face as a country. America certainly faces challenges, but nothing is inevitable and it is still within our power to arrest our decline or to accelerate it. To quote John McCain’s only good speech in 2008, Americans don’t hide from history; we make history.
Let’s turn the calendar back to January and travel to an America that might have been. President-elect Obama asks his best economic advisors what it will take to get our economy moving again. Then he keeps his campaign promise and listens.