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The GDP (Gosh-Darn Pathetic) Economy: The miserable, deliberately imposed "new normal."
Pajamas Media ^ | 05/08/2014 | Tom Blumer

Posted on 05/08/2014 8:14:39 AM PDT by SeekAndFind

As the POR (Pelosi-Obama-Reid) economy [1] nears the end of its sixth year, one thing we can say for certain is that the “fundamental transformation” President Barack Obama, Senator Harry Reid, Congresswoman Nancy Pelosi and their party have long wished to impose on these United States has made measurable progress.

Democratic Party housing policies caused the recession [2]. Obama’s conduct during the 2008 campaign [3] and the presidential transition period [4] lengthened it. His administration’s failed [5] 2009 stimulus plan, followed by over five years of cronyism [6], demagoguery, and regulatory zealotry — now briskly advancing into bald intimidation [7] — have slowed the alleged recovery to a crawl and exacerbated the very income inequality the left routinely denounces.

If there was a record for most economic reports issued which are worse than they initially appear, this bunch would hold it by a wide margin.

An obvious example of a bad number made worse after just a little investigation is in the April 30 report on first-quarter economic growth.

The government’s Bureau of Economic Analysis told us that the nation’s gross domestic product grew by a virtually imperceptible 0.025 percent (0.1 percent annualized [8]). Even assuming no population growth, an equivalent result in the employment arena would see a company grant a 10 cents per week raise during each of the next four quarters to a worker currently earning $400. But of course, the U.S. population did grow, and real per capita GDP fell. Fixed investment, the factor which above all others drives genuine long-term growth and prosperity, contracted.

Obamacare defenders celebrated one component of the result, claiming that the first quarter of the statist health regime’s implementation was the only thing [9] that kept the economy from moving into contraction. Applying just a little common sense reveals that Obamacare really sent the economy into decline.

Yes, health care spending increased sharply. But much of it likely was incurred by the millions of new Medicaid patients roped into the system by HealthCare.gov and the state exchanges (at least the ones, unlike Oregon’s [10], that work). Long-term studies have shown no significant improvement [11] in medical outcomes in that program. That extra spending, higher Obamacare-caused insurance premiums (buried in the “financial services and insurance” line item in the GDP report, but likely responsible for almost all of its increase), and higher outlays on utilities during the rough, non-global warming winter caused all other forms of consumption to flatline [12].

In layman’s terms, Americans during the first quarter more than likely spent a whole lot of extra money on things which on the whole didn’t make them any better off, keeping them from purchasing many useful things they ordinarily would have bought. In the real world, Americans’ standard of living noticeably declined.

At first glance, Friday’s employment report [13] from the Bureau of Labor Statistics seemed like good news. The economy added 288,000 seasonally adjusted payroll jobs, and the unemployment rate dipped to 6.3 percent. Again, a surface scratch reveals a largely ugly reality.

As has been the case throughout the nearly five years of alleged recovery, a wildly disproportionate number of the jobs added went to those in low-wage occupations, including temporary help services (24,000) and “food services and drinking places” (33,000) — a line item which, based on a report from the left-leaning National Employment Law Project, should be renamed “fast food services [14].”

So 1.1 million of the 7.8 million net jobs added since the recession as officially defined ended in June 2009 have gone to temps [15]. Employment in that sector has increased during that time by 63 percent, while payroll job growth in all other occupations has grown by a paltry 5.2 percent. Those who argue that employers haven’t changed their staffing behavior as a result of Obamacare routinely ignore this ongoing structural change in the workforce.

As for the unemployment rate, it went down entirely because 806,000 people left the workforce [16]. Since Barack Obama took office in January 2009, the 16-and-over civilian population has increased by 12.7 million, while the U.S. workforce has increased by only 1.2 million. The labor force participation rate has been stuck at or barely above levels last seen 35 years ago for the past seven months.

We’re at least three years past the point where anyone genuinely interested in turning the economy around would have recognized that their falsely applied [17], Federal Reserve-assisted Keynesianism on steroids wasn’t working, changed course, and tried something else.

It’s not like there aren’t alternatives. The application of supply-side economics-driven tax cuts and regulatory restraint in the wake of the 1980s recession grew the economy [18] by an average of 4.4 percent per year for seven years while adding a well-paying, inflation-beating mix of 18.8 million payroll jobs. The Reagan economy added jobs at almost triple the annual rate [19]during those seven years as the Obama economy has since the recession ended.

If Democrats are too proud to do what the Gipper did to make that happen, they could at least work with Republicans to create the conditions which largely drove the prosperity of the late 1990s — entitlement reform, balanced budgets, and reduced taxes on capital gains.

But they won’t attempt that either. As a result, the Federal Reserve under Janet Yellen has already given up [20] on the idea that the economy can sustainably grow by more than 3 percent per year without triggering inflation.

The working assumption has to be that Team Obama, as they continue to consolidate their power, is okay with this miserable “new normal.” How much longer the American people will tolerate it, even with the press working mightily to conceal it, is the critical question.


Article printed from PJ Media: http://pjmedia.com

URL to article: http://pjmedia.com/blog/the-gdp-gosh-darn-pathetic-economy/

URLs in this post:

[1] the POR (Pelosi-Obama-Reid) economy: http://www.bizzyblog.com/2008/07/03/the-pelosi-obama-reid-recession-porr-may-have-begun/

[2] caused the recession: http://news.investors.com/ibd-editorials-perspective/120412-635699-recession-function-of-democrat-housing-regulations.htm

[3] during the 2008 campaign: http://pjmedia.com/blog/our-recession-began-in-earnest-after-obamas-election/

[4] the presidential transition period: http://pjmedia.com/blog/obamas-broken-window-company/?singlepage=true

[5] failed: http://cnsnews.com/blog/terence-p-jeffrey/obamas-stimulus-documented-failure

[6] cronyism: http://pjmedia.com/blog/cronyisms-costs/

[7] bald intimidation: http://www.bizzyblog.com/2014/05/02/establishment-press-virtually-ignored-dojs-pernicious-operation-choke-point/

[8] 0.1 percent annualized: http://bea.gov/newsreleases/national/gdp/2014/txt/gdp1q14_adv.txt

[9] was the only thing: http://www.huffingtonpost.com/2014/04/30/obamacare-economy_n_5242767.html

[10] unlike Oregon’s: http://www.bizzyblog.com/2014/04/28/hbos-john-oliver-ridicules-cover-oregons-complete-failure/

[11] no significant improvement: http://www.forbes.com/sites/theapothecary/2013/05/02/oregon-study-medicaid-had-no-significant-effect-on-health-outcomes-vs-being-uninsured/

[12] to flatline: http://bizzyblog.com/wp-images/1Q14GDPpceNetOut.png

[13] Friday’s employment report: http://www.bls.gov/news.release/archives/empsit_05022014.htm

[14] fast food services: http://newsbusters.org/blogs/tom-blumer/2014/04/29/nyt-runs-lefty-groups-evidence-fast-food-recovery-page-b4-ap-ignores

[15] have gone to temps: http://bizzyblog.com/wp-images/TotalAndTempEmployment2004toApril2014.png

[16] left the workforce: http://www.bls.gov/news.release/empsit.t01.htm

[17] falsely applied: http://pjmedia.com/blog/keynesianisms-collapse/?singlepage=true

[18] grew the economy: http://bizzyblog.com/wp-images/GDPandJobsGrowth1983to1989.png

[19] at almost triple the annual rate : http://bizzyblog.com/wp-images/ReaganVsObamaWithJObsMulliganApril2014.png

[20] has already given up: http://www.bloomberg.com/news/2014-05-02/yellen-s-fed-resigned-to-diminished-growth-expectations.html


TOPICS: Business/Economy; Culture/Society; Government; News/Current Events
KEYWORDS: economy; gdp; unemployment

1 posted on 05/08/2014 8:14:39 AM PDT by SeekAndFind
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To: SeekAndFind

President Lenin’s administration has broken the nation to such an extent that it’ll be difficult or impossible for later administrations ever to fix everything.

Translation: We’re f***ed.

Thanks Democrats (and complicit Republicans).


2 posted on 05/08/2014 8:20:45 AM PDT by Jack Hammer
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To: Jack Hammer

Perhaps a 2014 attainment of non-DNC control of both houses and a 2016 attainment of a non-DNC president while retaining control of a non-DNC legislature will result in a war winning strategy by the new non-DNC administration similar to Sherman’s strategy in the south in the geat CW.

Go scorched earth on local, state and federal governments—all three branches at the fedral level especially.

Eliminate most federal agencies, fire most federal employees, abolish the IRS while you are at it.

Spend the surplus on retiring the debt. Then, when the debt is retired, take the continuing surplus and build highways and bridges.

Put in place tariffs that level the cost of imports to the cost of domestic products.

Eliminate corporate taxation entirely. Fund everything with tariffs and fees.

Watch the whole world begin to build plants and infrastructure in America rather than fleeing America.

Unemployment will eventually approach 1-2% and wages will rise accordingly as companies compete for labor.

Or just keep doing what we are doing and expect a different outcome. Sadly the sanitariums will soon fill as there won’t be enough beds to house the insane.

Or not. I am old. My ass is sore from sliding downhill since Carter.


3 posted on 05/08/2014 8:37:32 AM PDT by the anti-mahdi
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To: SeekAndFind

Hey GOP...It’s the economy stupid


4 posted on 05/08/2014 8:39:42 AM PDT by 1Old Pro
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To: the anti-mahdi

“Or not. I am old. My ass is sore from sliding downhill since Carter.”

We’re both in the same boat.

And I’m not optimistic that the US can ever be turned around. Not now, after six years and counting of Obama’s Marxism with its congressional complicity.


5 posted on 05/08/2014 8:53:46 AM PDT by Jack Hammer
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To: SeekAndFind

It’s the RECOVERY. If you only listened to news blurbs between radio programs, you would think we were living in economic Utopia.


6 posted on 05/08/2014 11:16:10 AM PDT by Phillyred
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