While speaking at the Democrat National Convention in Philadelphia last month, President Barack Obama proudly took credit for a strong and prosperous United States economy. His statement begs the question of who, exactly, has seen a strong and prosperous economy under his administration.
Aside from public employees, Wall Street investment firms and politically favored renewable energy producers, all indications are that the average American has not prospered throughout the past seven and a half years. In fact, during Obama’s two terms in office, the U.S. economy has suffered through the slowest economic recover recorded since World War II.
Despite annual government infusions of enormous amounts of borrowed money, and “near zero” interest rates, the U.S. economy has stagnated. Annual economic growth has averaged only a little more than two percent during the first seven years of Obama’s administration.
The figures for the last quarter of 2015 and the first two quarters of 2016 are much worse. The United States Commerce Department recently revised those numbers downward to an average of less than one percent annual economic growth. One technical indicator of a recession is two consecutive quarters of negative economic growth as measured by a country's gross domestic product.
Even that meager growth has resulted almost entirely from short-term increases in consumer spending. Most economists agree that spending on commodities is unsustainable without a stable employment environment. The White House boasts regarding U.S. unemployment rates falling to 4.9 percent in January and holding steady at that level through June, are misleading at best.
The official unemployment rate does not include discouraged workers who have taken on temporary or part-time work to make ends meet. The national unemployment rate jumps to 10.5 percent when those workers are added to the equation. Even that dismal number does not describe the stark reality of the current employment situation.
The national labor force participation rate measures how many people in the potential workforce are actually working. Throughout Obama’s term in office, that employment measure has steadily declined to levels not seen during the past 40 years. When all those people who have dropped out of the workforce are added to the formula, the actual rate of U.S. unemployment is well into the mid-teens.
Meanwhile, the real wages for workers who do have a job has remained stagnant after adjusting for inflation. The political power of public employee unions has ensured that public sector employees generally continue to do very well.However, private sector workers are not faring nearly as well. Their average inflation adjusted compensation is often less than when Obama was elected.
Economists understand that healthy business investment is required to create growth in employment opportunities and higher wages. This is especially true among the small and mid-sized businesses that create well more than half of all new private sector jobs.
According to a graphic included in this article, United States Commerce Department data shows the average business investment in the United States has been negative for the past seven quarters.
For the first time in more than 35 years, the number of small business start-ups is now being exceeded by the number of small business deaths.
Many larger businesses are capable and poised to lead an economic rebound. They are both holding unprecedented amounts of cash and have ready access to loans with interest rates that remain near historic lows. Energy costs are low, experienced labor is readily available at competitive costs and opportunities are abundant.
However, the business community remains spooked by draconian tax and regulatory burdens created and maintained throughout the Obama administration. Their fears are bolstered by recent rhetoric from Philadelphia, including Democratic presidential nominee Hillary Clinton’s declaration that “Wall Street, corporations and the super-rich are going to start paying their fair share of taxes.” She also promised expanded rules on finance, health care and drug prices, as well as mandated private sector wages and benefits.
The Obama administration and Clinton alike appear incapable of understand that their economic policies are the cause of, rather than the solution to, the nation’s economic malaise. Instead of addressing those problems, Obama’s regime has carried out virtually all the financial manipulations traditionally used by central governments to help stimulate a faltering economy.
The Federal Reserve has held basic interest rates at near zero for his entire term in office. Some entities are already paying negative interest rates for “safe” investment holdings. Further investment stimulus through interest rate reductions is no longer possible.
The federal government has already “stimulated” the economy through unprecedented infusions of borrowed cash. Our national sovereign debt has more than doubled, to nearly $20 trillion, during the Obama administration.
Total US debt stands at about $66 trillion, or more than $200,000 for every U.S. citizen. That is about one million dollars, in federal government debt, for each family of five. It seems unwise, if not criminally insane, to attempt to further stimulate the economy with infusions of even more borrowed money.
Free market capitalism is the only pathway out of this government-created morass. Businesses of all sizes must be allowed to create wealth by investing in waiting opportunities to develop new and better products, increase productivity and create family wage jobs for the American workforce.
That is not happening, primarily due to current government interference and uncertainty regarding the future interaction of business and government. Understandably, the private sector will not make those desperately needed business investments until they have a more well-defined understanding of future government labor and tax laws, environmental regulatory schemes and a clearer appreciation of the extent of government-sponsored and subsidized competition.
The recently completed Democrat convention in Philadelphia made one message abundantly clear: The election of Hillary Clinton will result in another four years of Obama’s wealth redistribution and anti-business policies. That, in turn, will ensure the continued reluctance of private sector business investment in our economy.
In my opinion, a Clinton presidency will virtually ensure another full-blown economic recession. Without the capacity for the central government to react with interest rate adjustments and economic stimulus spending, it will most likely result in a prolonged economic depression.
The choice will be determined by the American voters in the November election. We hope they chose wisely.
Please remember--If we do not stand up for rural Oregon, no one will.
Senate District 28
This article reproduced with permission from Senator Whitsett’s Office. Original article here >