The economic indicators are a jumbled mess…and that may be on purpose.
The financial markets soar, but fewer stocks have rising prices. Corporate profits reach all-time highs, but employees receive their lowest share of it 1947…as they struggle to reduce consumer debt that hit a record high in 2012.
The employment picture is even more confusing.
The U.S. economy added 288,000 in April 2014, and the headline unemployment rate declined from 6.7% in March to 6.3%. Additionally, upward revisions for the two prior months mean 713,000 people found work from February through April. That seems positive, even hopeful…until one learns 806,000 people left the workforce in the month of April alone and that the exodus from the workforce, not the number of people finding work, accounts for the decrease in April’s unemployment rate. Interestingly, people leaving the workforce since 2009 account for all the unemployment rate decline during the Obama administration, and for dropping the labor force participation rate to a 35-year low.
Despite this, the press says the job market is improving, going so far as to say leading indicators signal the pace of U.S. economic growth is poised to snap back. How, or even when, that might occur when First Quarter GDP growth for this year was 0.1% – yep, ZERO-POINT-ONE…PERCENT – is mystifying. Equally mystifying is how the experts conclude weather caused the poor growth growth, but did not affect stock prices. More mystifying still is how the president concludes an economy, absent of growth, is improving.
So, stock markets are high, but not that many stocks are rising; businesses make more money, but employees see less of it, while consumer and public debt are at all time highs, here and abroad. Some find work, but even more give up looking; the economy does not grow, but we hear it is getting better. Yep, clear as mud.
The mixed messages don’t stop there. The president says of “income inequality”: “I believe this is the defining challenge of our time”:
Yet, his policy “prescriptions” may only exacerbate the disease:
His minimum wage increase will reduce the number of jobs, according to the CBO and the Chairman of the Federal Reserve,
The president wants Obamacare implementation “follow through”, though the CBO has determined it will cut work hours by the equivalent of 2,000,000 full-time jobs, and
Obama’s “Promise Zones” sound like Clinton’s “Empowerment Zones”, which made poorly validated claims of helping the poor, and like the “War on Poverty”, which has cost $15 Trillion (perhaps more) over the last half-century, with the Census Bureau reporting a higher poverty rate now than in 1966. (Reflect on that: We have spent the rough equivalent of the current national debt on a project that has missed its mark for the last 50 years. One can only wonder where the economy might be had that money remained in the private sector.)
It is hard to see how any “income inequality” challenge would be met by reducing the number of available work opportunities, or by doubling down on policies that have not worked for decades.
Today’s U.S. economy is a modern retelling of the Emperor’s New Clothes, complete with a media chorus that works to explain away the nakedness much of the public has already seen.
Simply put, things are not better for U.S. economy. The number of people in the workforce, as a percentage of the working population, has not been this low since 1979. Some may recall that the Jimmy Carter economy is what led to the Reagan Revolution in 1980, and that Ronald Reagan won re-election in 1984 by helping to put Americans back to work after the Carter years:
Unfortunately, though Americans considered jobs and the economy their top priority 2008, 2009, 2010, 2011, 2012, 2013, and 2014, the federal government maintained a different perspective. Instead of focusing, the president has instead “pivoted” to jobs and the economy so many times that he resembles a whirling dervish:
The result from all that “spin” is 11.3 million people out of the workforce, against approximately 4.1 million jobs added since 2009. Add to that, a great number of the jobs gained are part-time, not full-time. Add to that, median income for U.S. households is down since the Great Recession ENDED.
For all the confusing and conflicting economic news, one thing is quite clear: America has failed to do, from 2008 through 2014, what she accomplished from 1980 to 1984, even though — with double-digit unemployment, inflation, and federal interest rates — the 1980’s began with a much more troubled economy.
What seems most odd is that all the bad information about the economy is even worse for blacks, who voted 95% for Obama in 2008, and 93% for Obama in 2012. Despite “depression level” unemployment, higher poverty rates than any ethnic group, and losing ground “in every single leading economic indicator category”, many blacks remain willing to defend Obama against (imagined) racial attacks on him (something the president encourages), but not willing to defend themselves against the economic attack of his policies on them.
A telling quote is this:
- “Still, 61 percent regard the economy negatively, including a majority of all age and income levels, most independents and 80 percent of Republicans. Only among Democrats, people with a postgraduate education and blacks do a majority regard the economy as good.”
So you have to be either a Democrat, highly educated, or black to believe the economy is doing well, even though it is not doing well. That is a strange collection of people who simply do not believe that “fat meat is greasy”.
As long as such people ignore the essential facts to support an ideology, there will always be an ideological struggle. As long as the nation allows those who share such an ideological view to hold elective office, there will always be unnecessary economic struggles…and people purposely contorting data to make things seem better than they are.
And until the clear thinking among the American people either purge or abandon a government containing such ideologues, we may never see “Morning in America” again.