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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.
Best Regards,
Doug
Senate District 28
Email: Sen.DougWhitsett@state.or.us I Phone: 503-986-1728
Address: 900 Court St NE, S-311, Salem, OR 97301
Website: http://www.oregonlegislature.gov/whitsett
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