Anemic Economic Recovery, Year Six

The bad news from the Veterans Affairs scandal, the tepid commencement speech at West Point- which was coldly received, and the extremely questionable decision to trade five high-level terrorists from Gitmo for “missing” soldier Bowe Bergdahl, in addition to several other presidential missteps has been a distraction from the ongoing bad news regarding the economy. But it won’t change the reality that a country dependent on liberal policies for wealth creation and economic growth, won’t create wealth and won’t grow.

 

Like ours.

 

According to the National Bureau of Economic Research, we are now into the sixth year of a supposed economic recovery. But the economy resembles anything but recovered.

 

The jobless rate remained at 6.3% in May. ADP says that 179k private sector jobs were added in May, compared to 217,000 jobs the BLS says were created, which was down from April. May was yet another month in which job creation didn’t keep up with population growth.

 

“Economic recovery.”

 

The labor force participation rate also remained unchanged at 62.8%, the third time the participation rate has been this low during the Obama presidency. If the current labor force participation rate was the same as it was at the start of this recovery in June 2009, (65.7%), the unemployment rate would be above 10%.

 

The number of “unemployed” people tallies 9.5 million people. The average length of unemployment is 34.5 weeks (almost six months). Thirty-five percent of unemployed people have been jobless for 27+ weeks. A third of the jobs created are in the low wage sector. The 2.1% wage increase doesn’t offset inflation. We just recovered all of the jobs lost prior to the recession (’07), but we’ve added an additional 10-plus million people to the labor force.  And over 92 million people aren’t in the labor force, 11.5 million more than when Obama took office.

 

“Economic Recovery.”

 

As it pertains to Hispanics and blacks, their jobless numbers were 7.7% and 11.5%, respectively. Black unemployment has a history of being roughly twice the national rate. Unfortunately, the black employment rate hasn’t “rallied” nearly as quickly as it has for the country overall. The reason- blacks have continued to diligently look for work longer than the national prospecting average, which means they’re counted as being part of the labor force for a longer period of time. The extended duration of prospecting is partially responsible for the perpetually a high unemployment rate including, the disparity between the black/white unemployment rates.

 

“Economic Recovery.”

 

This stellar job picture is in addition to news that the GDP’s first quarter growth was downgraded from .1% to -1%. This means the economy contracted last quarter. This is the second such economic contraction in three years, the other being the first quarter of 2011 was when the economy “grew” at -1.3%. Earlier this month when addressing the current economic contraction before the Joint Economic Committee, Fed Chairwoman Janet Yellen told lawmakers that she viewed the contraction as a “pause” in growth.” Pause in growth. A ‘pause’ would be zero growth; -1% isn’t a pause. Only a progressive can walk backwards while claiming s/he is moving forward.

 

In addition to the economic contraction, the Wall Street Journal reported that worker productivity also plunged 3.2% in the first quarter.  Economists continue to blame the ‘harsh winter’ for the drop in worker productivity and the contraction of the GDP, but drops like these, are due to much more than the weather.

 

“Economic Recovery.”

 

The sixth year of President Obama’s prosaic economic recovery also sees stagnant wages (2.1% increase over the last twelve months) and increased school loan debt, which now totals over a trillion dollars. People having increased debt are partially responsible for the low volume of mortgage applications. Many of those who can’t afford to purchase homes are the often-cited Millenials. With increasing school debt, less-than-perfect credit, tougher qualifications for lending approval- combined with the inability to find work, Millenials are being prevented from participating and contributing to the economy. That’s why a third of Millenials are currently living with their parents.  The present situation affecting Millenials doesn’t inspire much optimism for the future of our economy.

 

But it’s not just Millenials who are having a rough go at finding work. According to the Labor Department’s own statistics, more than 10 million men aren’t in the labor force- which means they’re not working nor looking for work. This is a record high. Additionally, there are 3 million men who’re counted as in the labor force but who aren’t employed: these are men would work if they could find a job. That’s 13 million men negatively affected by the recovery who would otherwise be participating and contributing to the economy. “War on women?”

 

Nope. “Economic Recovery.”

 

To give more insight into how bad the national apathy is regarding our current economic picture, a recent poll showed that 47% of unemployed people have completely given up the hope of finding a job. In another poll, 60% said that their version of the American Dream was unachievable.

 

And if you think that Obama may do something advantageous for the country to spur the economic engine, if only for optics, forget it. Obama’s new, congressionally circumventing EPA regulations that claim to reduce carbon emissions over the next fifteen years, will actually reduce the presence of the coal industry. It will also wipe out over 200,000 jobs, cost the economy upwards of $50 billion dollars a year and, increase electricity rates- that fulfills Obama’s promise that “electricity rates would necessarily skyrocket.”

 

This isn’t an “economic recovery” by any stretch of the progressive’s imagination.

 

The past six years have demonstrated a clear, unadulterated truth. From the moment Obama sat down in the Oval Office-, the economy wasn’t a priority of his domestic agenda. Instead, Obama eagerly sought to implement as much of his expensive ideology as he could. From the “stimulus bill,” to “investing in ‘green energy,’” to increasing taxes and nurturing class warfare; to increasing entitlements and government dependency, to his financial reform bill, to adding endless pages of EPA regulations, etc., the president never intended to resurrect the economy.

 

Don’t expect him to start now.

 

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Our Flat Economic “Recovery”

Flat.

President Obama uses the term as a pejorative against his critics when he calls opponents of his environmental regulations “flat-earthers.”

But “flat,” in the Obama universe, is — unfortunately — a term that can be better used to describe the way the President is handling the economy.

Other terms the mainstream media used just this week to assess the America’s current economic state of affairs included “crawl,” “stall,” “brutally slow” and “barely registers a pulse.”

These terms were included in reports about the unsettling news that the federal Bureau of Economic Advisors announced that the gross domestic product, widely considered to be the leading indicator of economic growth, grew by only 0.1 percent during the first quarter of 2014.

Almost flat.

It’s an abysmal showing for the economy, especially since the American people are consistently being assured by Obama and his supporters that we are in a period of recovery.

The Federal Reserve, in part, tried to blame the weather.  Think about that for a minute.  On one hand, people are causing global warming and need to have more regulation of their behavior.  On the other, the Fed is now claiming global cooling may have brought the gears of the nation’s economic engine to a slow grind.  Do they really believe they can have it both ways?

Obviously, they do.  And, while they seem to live in a fantasy world, the rest of America is left to suffer.

That’s where flat comes in again.

Flat also describes the national employment situation.  The official jobless rate for April, as determined by the federal Bureau of Labor Statistics, was an unacceptable 6.3 percent for April.

It looks like a significant drop of four-tenths of a point, but the labor force dropped in size in April by 806,000 workers.  A lethargic percentage of people are active in the workforce, and 2.2 million are considered “marginal” and 783,000 are considered “discouraged.”

All in all, it’s ultimately yet another month where there has been little change.  It was a push.  Flat.  Depressing.

What’s worse, the U-6 alternative rate that includes the same jobless numbers as the official rate does plus those people who are underemployed and those able-bodied individuals who are so despondent that they’ve stopped looking for a job (to end up with what some people consider to be the true unemployment rate) was still extremely high at an astronomical 12.3 percent.

Only 288,000 jobs were created in April.  The labor force participation rate was 62.8 percent.  That’s at Carter era levels.

It’s a travesty.

To make matters even more dire, things are also still flat for many of the key constituencies in the Obama coalition.  For example, the black unemployment rate for April was 11.6 percent.  Black teen unemployment, in particular was much worse.  It was a through-the-roof 36.8 percent — rising by seven-tenths of a point.  Overall unemployment for Hispanics was 7.3 percent.

What about the so-called conservative war on women?  There were almost 4.5 million jobless women in April.  How are the sloganeering policies of the Obama Administration such as “equal pay” and “minimum wage” — and even employer-supplied contraception — going to help women when they lose their job under this economy or cannot find one in the first place?

But it’s not just women having payroll problems.  Reports suggest there is diminishing American wage for all Americans.

For instance, a new report by the National Employment Law Project found that low-income jobs are the one sector of the labor market that gained a bit during the alleged period of recovery while mid-level and high-paying jobs disappeared in the Obama era.  NELP’s report notes, “the types of jobs available to unemployed workers, new labor market entrants and individuals looking to move up the career ladder are distinctly different than they were prior to the recession.”

Additionally, the U.S. Census Bureau reports that workers 40 years ago were making more than people are today.  In inflation-adjusted dollars, the median salary for men in 1973 was $51,670.  In 2012, the median was down to $49,398 — a 4.4 percent decrease.

In New York City, officials there are claiming that more people are working but earning a lot less.  The New York Times reported that, in 2011, 46 percent of New York City residents were at or under 150 percent of poverty level.  It was reported: “While more people were working, wages were lagging because most jobs were generated in lower-wage hospitality and retail fields.”  It was also suggested this trend and the despondency it caused was what got Mayor Bill de Blasio — a politician who is even further to the left of President Obama — elected last year.

There are jobs out there, but it seems Obama isn’t interested in them.  Hell, he’s not interested in the economy, period. Case in point: the Obama Administration once again delayed the approval and construction of the full Keystone XL pipeline that would bring crude oil from Canada to the Gulf of Mexico and create thousands of jobs in construction and related industries and supportive businesses (thanks, Tom Steyer).  The Obama Administration, which has vetted the pipeline proposal for years and has thus far concluded there are no environmental hazards of merit, nonetheless delayed a final decision in a Good Friday announcement with announcing that still more consideration was being asked of eight more federal agencies.

The delay of the Keystone XL pipeline decision angers even Obama’s steadfast supporters at this point.  Terry O’Sullivan, the general president of the Laborers’ International Union of North America — a union that supported both of Obama’s presidential campaigns — wrote in the Washington Post: “No one seriously believes that the administration’s nearly dark-of-night announcement [of the latest delay]… was anything by politically motivated.”

Similarly, shale production in Ohio is creating new jobs that are “growing [at a rate] faster than the job market as a whole.”  But, as a fossil fuel, it’s not really a job market that President Obama seems excited to champion.  Remember, the people who push for increased fossil fuel production and against Obama’s regulatory regime and risky alternative energy scheme are considered to be flat-earthers.

There are jobs out there.  From new reports, however, the quality of many of those jobs are unsatisfactory for the majority of Americans.  Those that are considered desirable do not appear to exist within the realm of Obama’s favor.  It’s an uncomfortable situation that is leaving the American job market and the American economy… flat.

Lackluster Jobs Report

Because of the administration perpetual damage control these days- attempting to manage the repercussions of the President’s ongoing and mounting missteps, the economy seems all but forgotten.

Domestically, these blunders include- but aren’t limited to- the continuing and unanswered questions surrounding the IRS’ political intimidation scandal. There’s also the man-made distraction that is Attorney General Eric Holder who encouraged his state-based counterparts to disregard their oaths to their respective state constitutions and not defend laws they personally disagree with.  He also tried to persuade states to lift bans that would allow convicted felons voting privileges.

And there’s yet another Obamacare implementation modification and two-year delay to the imposition of the individual mandate.

On the world stage these blunders include the repercussions of Syrian’s civil war and humanitarian disaster that occurred while Obama weakly endeavored to erase the red line he set in regards to Bashir Assad’s murdering of his own people.  Then there’s Iran’s disruption of Middle East politics and mocking of the president’s threat of military force to contain Iran.  And who can ignore Putin’s methodical attempt to expand the Russian empire into Ukraine.

Again, because of the President’s contribution to these distractions, the economy is the forgotten man.  The economy receives scant mention by the media and not taken seriously by the President or his economic advisors.

The national unemployment rate had a slight increase to 6.7%, (U-6 is 12.6%) representing 10.5 million Americans still looking for work.  The long term unemployed increased by 203k in February, bringing the total number of Americans unemployed 27-weeks or longer to 3.8 million.

The Obama administration will continue to spin this report as (more) evidence of and economy slowly gaining momentum even though the nation’s GDP was revised downward to a 2.4% annual growth pace in the fourth quarter, not the 3.2% that was initially reported.

Five years after the president’s celebrated $900 billion “stimulus package,” there are still more people out of the workforce today than when he took office in January 2009.  There are more people receiving food stamps and federal disability than when he took office as well.  The annual average labor force participation rate reached a 35-yr-low, averaging 63.2% for 2013. All of this is indicative of the fact that this “recovery”- if one still wants to call it that- is the weakest since the Second World War.

The CBO’s recently released report describes the reality in detail.  It notes that the sluggish recovery, the inverse relation of the unemployment rate drop to the high numbers of disaffected, potential employees who’ve left the labor force (including the high numbers of the long-term unemployed) and the low demand for goods and services that’s partially responsible for the slow growth of payrolls is expected to negatively affect the nation’s economy for at least a decade.

Month after month, the economic indicators have become increasingly ominous, yet very little has been done, let alone addressed. The country is in a vulnerable position and in need of leadership- particularly on this issue.  But it won’t be found in the person reclined in the Oval Office who disrespectfully puts his feet up on the Resolute Desk.

Consider the president’s recently released, $4 trillion dollar partisan budget that Democrats will use as a campaign platform for the midterm elections.  The president wants more tax increases with projected revenue of more than a trillion dollars; he wants to decrease the size and pay for members of our military (even though food stamp use among our soldiers has increased under Obama).

Obama also wants to create and fund more social programs like “universal preschool” and he wants to extend unemployment insurance.  There are even budget sub-topics such as ending homelessness, increasing minimum wage and immigration reform.

If that wasn’t unserious enough, the president’s budget also calls for a $1 billion-dollar, “resilience fund,” that would combat the negative effects of climate change.  This would give the EPA the money and power to impose the president’s regulation-heavy agenda on the country, causing energy costs to increase, cheating the economy of over $2 trillion over the next twenty-plus years.

Obama’s budget is in no way a sober attempt to deal with the economic difficulties facing the country, many he directly contributed to.  In other words, zero substance, which is perfectly reflective of its author.

The state of the nation’s economy matters very little to the president.  Obama hasn’t been held accountable for the country’s poor economic situation thus far and I suspect very little will change that fact in the near future.