It was more than a little disconcerting to watch President Barack Obama pretend to be a friend of the middle class in Kansas on December 6, and to watch the press lap it up as if it was the gospel truth. The record shows that Obama’s and his party’s policies, plans, and proposals have done more harm to the middle class than any administration in my lifetime.
One of Obama’s core claims is that the policies of the past, coming from largely Republican administrations espousing and carrying out conservative ideas, are what brought the economy to the brink, and that those ideas and policies must never again be considered.
Setting aside for the moment the fact that those ideas and policies were often not conservative enough, Obama’s historical revisionism is about as brazenly dishonest as it gets. After all:
- I don’t recall the Community Reinvestment Act, which over several decades morphed into a sledgehammer forcing banks to act against their own interests or face endless litigation at the hands of ACORN-like groups, being a Republican or conservative policy.
- I don’t recall current New York Governor Andrew Cuomo’s determination to make mortgage financing available based on ethnicity instead of ability and willingness to pay when he ran the Department of Housing and Urban Development in the 1990s under President Bill Clinton something that Republicans or conservatives cheered.
- Finally, I don’t recall the systematic undermining of the market for mortgage-backed securities undertaken by Democratic Party cronies who ran the frauds by design known as Fannie Mae and Freddie Mac having Republican or conservative approval. While it’s true that Fan and Fred had some RINO defenders, none of them — and for that matter almost no one else in the country besides Democratic insiders — knew that for fifteen years, Fan and Fred “routinely misrepresented the mortgages they were acquiring,” presenting them as being of higher quality than they really were. As a result, mortgage-backed securities holders unknowingly bought hundreds of billions of dollars’ worth of junk.
The housing and mortgage lending messes, which were almost entirely the creation of Democratic Party policies and Democrat apparatchiks’ backroom scheming, are what brought the economy down. It certainly wasn’t the straw-man, “on your own” mindset Obama chose to demonize in his speech.
The principal economic policy features of the quarter-century stretch Obama wants to send down the memory hole were tax cuts (with booming tax receipts, which the smarties said would never happen) and at least some regulatory restraint (but really not enough). The president claimed that this set of policies “doesn’t work. It has never worked.”
Horse manure. Until things came to a head in housing, as James Pethokoukis of the American Enterprise Institute pointed out on December 7:
The U.S. economy grew at an average pace of 3.3 percent from 1983-2007, inflation … was slayed, and the stock market rose by 1,400 percent. Median middle-class incomes rose by roughly 50 percent. Reaganomics worked. But Obama acts as if that generation of steady growth … never happened since it doesn’t fit into his disingenuous narrative.
Once we were in the mess, the policies the newly-elected Obama chose to get us out were the ones which so obviously failed to get us out of serious difficulty in the past — which leaves Obama’s seriousness about wanting to get us out open to question. Franklin Delano Roosevelt’s statist “solutions” for the Depression never brought unemployment below 12% during the 1930s. Similarly, three years of round after round of Keynesian stimulus, Keynesian money-printing, and unprecedented Keynesian deficits, combined with previously unseen regulatory excesses, have left the private sector’s output smaller than it was almost four years ago. We still have supposedly grown men and women on the left who continue to claim, during the worst recovery since World War II, that the best form of economic stimulus is continuing to give money to those who aren’t working.
We’ve had a chance to see what the policies Obama said would work will continue to bring us if sustained. It has not been pretty, especially when compared to the analogous Reagan-era time period:
- In the 29 months since the recession ended in June 2009, the economy has added a bit less than 2 million seasonally adjusted private-sector jobs. Federal government employment is virtually unchanged despite substantial job losses at the postal service, while previously bloated state and local governments have shed over 550,000 jobs. During the first 29 months after the last full quarter of the Reagan-era recession when the workforce was about 25% smaller, what “doesn’t work” brought us over 7.3 million additional jobs, including more than 400,000 in the public sector.
- During the nine quarters after the most recent recession ended, the economy has grown by 5.5%. During the analogous nine quarters under Reagan, what “has never worked” caused the economy to grow by 14%, a full 2-1/2 times faster.
- The seasonally adjusted unemployment rate since the most recent recession ended has gone from 9.5% to 8.6% — and November’s reading had many disturbing “going Galt” elements underlying it. The comparable drop during the Reagan era? From 10.1% to 7.2%, over three times greater.
- The economy’s cadre of temporary, seasonal, and part-time workers continues to swell. Incredibly, the economy had only 417,000 more full-time workers in November than it did at the end of the recession. The comparable Reagan-era period saw 6.9 million full-timers added. Employers are avoiding and will continue to avoid adding full-time help as long as they can until they see whether the malaise known as Obamanomics will get another four-year run, and whether the monstrosity known as ObamaCare survives court challenges.
Slow growth, out-of-control regulation, and chronic uncertainty have caused millions of the unemployed to stay that way, making them even more unemployable with each passing day. Millions of others are seeing their skills underutilized. Team Obama’s gutting of the middle class thus far has been quite effective. Give ’em four more years, and they might just finish the job, all the while pretending to be the average American’s best friend.
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