Obama's Broken Window Company — And His Larger, More Serious Damage
The harm done to the nation's economy by the original Republic occupation was far more serious, and is still with us.
You see, one of those who took the workers' side in 2008 was President-elect Barack Obama -- a point which has gone virtually unmentioned in recent media coverage of the plant's impending demise. On December 8, Obama pointedly lent his support to the workers' cause while failing to call out their lawless behavior:
"The workers who are asking for the benefits and payments that they have earned, I think they're absolutely right and understand that what's happening to them is reflective of what's happening across this economy," Obama said.
Two days later, the banks caved.
Yours truly immediately recognized the much larger problem with what Obama had done:
It won’t take very much of this before businesses conclude that putting employees on the payroll must be avoided as long as possible, if it’s to be done at all. They will more frequently use temporary agency employees as long as they legally can. They won’t replace employees who retire or leave. They’ll have more work done in other countries. They won’t pursue business ideas that require U.S. employees. The trend toward professional employment organizations (PEOs, or “leased employees”) will accelerate.
More such appearances by Obama as rabble-rousing community organizer in chief will go a long way towards ensuring that his “get worse before it gets better” prediction about the economy becomes tragically true.
In hindsight, I believe that Obama's unprecedented reaction to what had been a private business dispute marred by union and worker lawlessness played a critical and immediate role in deepening and extending the recession, and that it continues to hold back the alleged recovery.
Keep in mind that he, along with Nancy Pelosi and Harry Reid, had already spent the previous six months going back to the beginning of what I have been calling the POR (Pelosi-Obama-Reid) economy since mid-2008 frightening investors, businesspeople, and entrepreneurs with what they said they would do if they achieved power. Those promises were radical: government control of health care, massive income and Social Security tax increases, and cap-and-trade, to name just a few. Employment, which had been declining, began to completely tank.
Obama's first thirty days as president-elect, though overbearing in many ways, gave some people hope that his Democratic administration, like Bill Clinton's, might not be as radical as first feared. Obama announced that he would defer originally planned tax increases. His early economic appointments, though insufferably Keynesian, were at least not off-the-chart socialists. What's more, it was plausible to believe that the economy, thanks to low interest rates and a return of gas prices to under $1.70 per gallon from over $4 five months earlier, might be righting itself, or at least that the worst of the bleeding might almost be over.
Obama's statement about the Republic situation completely dashed those hopes. What's more, his community organizer in chief pronouncement came just in time for January, which is always the worst month of the year for layoffs and terminations. An astounding 3.25 million private-sector workers lost their jobs in January 2009, the largest raw number of job losses in the seventy-plus years monthly records have been kept -- by over 700,000. January 2009 was also the worst month on record after seasonal adjustment. The mid-February 2009 passage of the stimulus plan and the Obama-condoned AIG executive intimidation campaign only confirmed what everyone in business pretty much already knew, namely that this would become the most aggressively commerce-hostile administration since Franklin Delano Roosevelt -- well on its way, especially after considering its mob-rule acolytes, to becoming the worst in U.S. history. Subsequent actions far too numerous to mention here have cast that evaluation in concrete. The worst post-downturn economic performance since the Great Depression is their tragic result.
My response to the administration's tired propaganda claim that the national economic situation was sooooo much worse than they thought when they first took office is as follows: Even if that's true, it's because your guy made it that way.
(Thumbnail on PJM homepage assembled from multiple Shutterstock.com images.)