He served in the White House Office of Policy Development under President Reagan, and as Associate Deputy Attorney General of the United States under the first President Bush. He is a graduate of Harvard College and Harvard Law School. He is author of The Obamacare Disaster, from the Heartland Institute, and President Obama's Tax Piracy, and his latest book: America's Ticking Bankruptcy Bomb: How the Looming Debt Crisis Threatens the American Dream-and How We Can Turn the Tide Before It's Too Late.
Latest posts by Peter Ferrara (see all)
- Just As With Reagan, Getting Tax Reform Right Today Is Key To Booming Economy - April 17, 2017
- Closing The Deal With Conservatives On Obamacare - March 24, 2017
- Senator Warren’s ‘Trust The IRS’ Bill - March 21, 2017
How many times has President Obama told us that he is “fighting for the middle class”? But real median family income has been in a continuous downward spiral since he became President, actually falling more since the recession ended in the summer of 2009 according to the National Bureau of Economic Research than during the recession. That has added up by now to the middle class losing a month’s pay a year under President Obama’s economic policies.
If President Obama is “fighting for the middle class,” why doesn’t he approve the Keystone Pipeline? Building and maintaining the pipeline would provide thousands of good paying jobs. So would refining and selling the oil and gas from the Gulf Coast refineries where the pipeline would deliver the Canadian crude. Moreover, that plentiful supply of low cost energy from a long time, reliable ally would support hundreds of thousands if not millions of additional good paying jobs in the American economy.
President Obama is constantly calling for raising taxes to increase government spending to build further infrastructure, with millions of “shovel ready” jobs supposedly waiting for that government rescue. We borrowed hundreds of billions for that in Obama’s 2009 so-called Stimulus bill, but the shovel ready jobs turned out not to be so “shovel ready” he later joked, while the economic suffering continued for millions of Americans.
But with Keystone, we have private investors fully capable of financing the more than ready to go infrastructure project, with their own private investment funds rather than taxpayer dollars. That should be a “no-brainer,” for anyone who is truly “fighting for the middle class.”
Meanwhile, electricity prices are skyrocketing to all-time highs, according to the government’s own official statistics. The Electricity Price Index of the Bureau of Labor Statistics hit an all-time record in November, 20% higher than 6 years ago. That is another loss for the middle class, further reducing real incomes.
That is due to Obama’s runaway overregulation, pursuing the President’s War on Coal, and other manipulative, fairy tale delusions. New EPA regulations will take out 10% of all electricity produced by plentiful, low cost American coal, according to the Institute for Energy Research. As for the dishonest global warming fantasy, relatively soon the period of no global warming, which started 17 years ago, will be longer then the period of actual global warming, which was a natural cycle that lasted only 20 years, from the late 1970s to the late 1980s. That was preceded by about 30 years of global temperature decline, or global cooling.
Those skyrocketing electricity prices are another loss for the poor too. Under the ultraliberal Barack Obama, and his “progressive” Democrats, poverty has soared while he has been President to nearly 50 million Americans, more than at any other time in the more than 50 years that the Census Bureau has been tracking poverty. The poverty rate has also jumped by over 30% to 16.1%, about the same as when the War on Poverty started $5 trillion and almost 50 years ago. We need “progressive” liberal Democrats for this?
Obama has also been the food stamp President, with the number on food stamps increasing during his Administration to an all-time record high of 47.7 million, up 80% over the past 5 years. Contrast that with the Clinton-Gingrich 1996 reform of the old, New Deal, Aid to Families with Dependent Children (AFDC) program. Under those reforms, the number dependent on the old AFDC program declined by two-thirds. Their incomes from going to work instead were documented to increase by 25%, while saving taxpayers 50% of the cost of old AFDC, compared to prior trends. But today’s “progressive,” Obama/Che Guevara Democrats are not the Kennedy/Clinton Democrats of yore.
Most recently, we have heard President Obama giving speeches bemoaning rising inequality. On December 4, President Obama told the nation that this rising inequality was “the defining challenge of our time.”
Inequality is measured by a statistic called the “Gini Index,” named after an Italian statistician who first wrote about measuring inequality in 1912. The Gini Index for the U.S. is officially published by the Census Bureau. The Index as published by the Census shows inequality sharply accelerating under President Obama, in contrast to greater stability under President Bush.
This follows automatically from the discussion above, with real incomes of the middle class and the poor declining under Obama. In fact, real incomes of the entire bottom 80% have been declining consistently under Obama, because of his poor record of generating economic growth, and any normal recovery from the 2008-2009 recession. Only the incomes of the top 20% have been rising under Obama, as the Fed’s loose monetary policies have juiced the stock market and corporate profits.
This has to be considered a disgrace, that Obama carries on publicly about rising inequality and how that is so important, yet inequality has been precisely accelerating under his own, consistently anti-growth, economic policies, which are precisely crippling the poor and the middle class. But no more of a disgrace than his record on unemployment, which reflects that it has been precisely his own, strongest supporters, particularly blacks, Hispanics, the young, and women, who have suffered the most under Obama’s failed policies.
For President Obama’s entire time in office, 5 years now, blacks have suffered unemployment well into double digits. With “Latino unemployment close behind,” as Obama himself also lamented in his Martin Luther King 50thAnniversary speech last August. Yes, the economy was in recession when President Obama entered office. But under every other President in U.S. history, for well over a century at least, the economy was in a booming recovery within 5 years, even under Franklin Roosevelt during the Great Depression!
Indeed, in the 10 previous recessions since the Great Depression, prior to this last recession, the economy recovered all jobs lost during the recession after an average of 23 months after the prior jobs peak (when the recession began), according to records kept by the Federal Reserve Bank of Minneapolis. So the job effects of prior post Depression recessions have lasted an average of about 2 years. But under President Obama, by last month, November, 2013, 71 months after the prior jobs peak, virtually 6 years, we still have not recovered all of the recession’s job losses. In November, 2013, jobs were still down about 1%, or about 1.5 million, from when the recession started virtually 6 years ago.
That included the longest period since the Great Depression with unemployment above 8%, 43 months, from February, 2009, when Obama’s so-called stimulus costing nearly $1 trillion was passed, until August, 2012. It also included the longest period since the Great Depression with unemployment at 9.0% or above, 30 months, from April, 2009, until September, 2011. In fact, during the entire 66 years from January, 1948 to January, 2013, there were no months with unemployment over 8%, except for 26 months during the bitter 1981 – 1982 recession, which slayed the historic inflation of the 1970s. That is how inconsistent with the prior history of the American economy President Obama’s extended unemployment has been. That is some fundamental transformation of America. And this does not include the plunge in labor force participation under President Obama, with millions fleeing the work force, and so not even counted in these unemployment rates.
Reagan suffered a severe recession starting in 1981, which resulted from the monetary policy that broke the back of the roaring 1970s inflation. But all the job losses of that recession were recovered after 27 months, with the recovery fueled by traditional pro-growth policies. By this point in the Reagan recovery, 71 months after the recession started, jobs had grown 11.2% higher than when the recession began, representing an increase of about 11 million or more additional jobs.
In November, black unemployment was still 12.5%, after 5 years under President Obama. The Hispanic, or Latino, unemployment rate was still 8.7%. The teenage unemployment rate, reflecting Obama Democrat experiments with the minimum wage, was 20.8%. The black teenage unemployment rate was 35.8%.
Even though the entire 1981-1982 recession occurred during Reagan’s first term, while only the last 5 months or so of the 2008-2009 recession occurred during Obama’s first term, real median weekly incomes for females rose 32.1% in Reagan’s first term, compared to 6.6% in Obama’s first term. Employment of women rose by 4,460,000 in Reagan’s first term, while women suffered a net loss of 354,000 jobs during Obama’s first term. Conversely, the number of women not in the work force rose by 4,458,000 in Obama’s first term, compared to 345,000 in Reagan’s first term.
More than 3 times as many jobs were created for African-American women in Reagan’s first term, compared to Obama’s first term, even though the population was much larger in Obama’s first term. Jobs for African American women rose by 15.1% in Reagan’s first term, compared to 2.6% in Obama’s first term.
Teenage female African Americans employed fell by 19.1% in Obama’s first term, compared to a decline of just 1.5% in Reagan’s first term. The unemployment rate for teenage female African-Americans rose by 5.7 percentage points in Obama’s first term, compared to just 1.1 percentage points in Reagan’s first term. So who is conducting the real War on Women.
Obama apologists cannot say Obama’s unemployment record is so bad because the recession was so bad. The American historical record is the worse the recession, the stronger the recovery, even during the Great Depression. So the 2008-2009 recession really just set the foundation for what should have been a booming recovery coming out of it, in 2009-2010, which would have made Obama such a hero. Administration economists, and even Obama himself, seemed to be expecting that. Remember Obama saying on national television in 2009 that if the recovery doesn’t take hold by 2012, he would be a one term President? This is what gave him the confidence to say that.
But Obama’s own, consistently anti-growth policies of increasing tax rates, exploding overregulation, runaway government spending in the beginning (before the Republican House was elected in 2010 to get in the way of that), and wild-eyed, destabilizing monetary policy, short-circuited the recovery, which still has not really happened. President Obama promised America in 2009 that if his nearly $1 trillion “stimulus” spending was enacted, it would bring down unemployment to 5%. Of course, we are still nowhere near that. He should have known that such wild-eyed Keynesian economics was thoroughly discredited, and rightly abandoned, more than 30 years ago. And it never held any sound logic in the first place. But Obama was so arrogant and self-satisfied about that outdated Keynesian doctrine from the get go.
What Obama needed to achieve his own stated goals to advance the middle class, the poor, and equality was economic growth, as President Kennedy’s policies so ably achieved, not to mention Reagan. Only booming economic growth can create good jobs and rising wages for the poor and the middle class. The foundation of the booming growth for both Kennedy and Reagan was reducing, not increasing, marginal tax rates. Reagan added sharply reducing regulatory costs, burdens and barriers, which began so stirringly under President Carter. Obama has repeatedly told us, as in his December 4 inequality speech, that he is for “streamlining regulations that are outdated or unnecessary or too costly.” But that is just another Obama failure, by his own words, as he has not remotely done anything like that, but so decisively just the opposite.
Reagan further stimulated the economy by cutting rather than increasing federal spending starting in his first year, and holding domestic discretionary spending flat for the rest of his two terms. And perhaps the most important was the strong dollar monetary policy which Reagan’s Administration consistently supported, giving the Volcker Fed the political cover to get the historic anti-inflation policy implemented.
This growth formula would do the job again, even more spectacularly than ever before, given all the long pent up growth in the economy. But Obama is so ideologically opposed to every component of this true growth formula, wrongly, even perversely, deriding it as the same policies that created the recession mess in the first place. He, in fact, has only done just the opposite in each case. Hence his perverse results.
And speaking about Obama failures, we haven’t even begun to talk about Obamacare yet. That was sold to the public as creating universal coverage. But not only has CBO scored it as leaving 30 million Americans uninsured 10 years after full implementation. The real world effect of Obamacare so far has been to increase rather than reduce the uninsured, by millions of Americans with Obamacare’s cancelled policies.
Also directly contrary to Obama’s often repeated promise, on which he sold Obamacare to a gullible public, that “if you like your health insurance plan you can keep your health insurance plan,” that has now been formally recognized even by the Democrat media as the Lie of the Year. But which year? It now turns out that what Obama really meant was that if he likes your health plan, you can keep it. Obama’s promise that if you like your doctor, you can keep your doctor, has fared no better. Even the policies on the Obamacare Exchanges offer sharply restricted doctor and hospital networks, to millions of Americans seeking to replace their cancelled coverage.
Obama also promised us that Obamacare would reduce health insurance costs by $2,500 a year per family. But Obamacare’s “free” benefit mandates, and overregulation, has only resulted in sharply increasing health insurance costs, more than doubling premiums in many cases, another President Obama failure by his own words and standards.
But the worst President Obama failure can still be yet to come. Obama told us that nuclear weapons in the hands of Iran’s terrorist government would be “unacceptable” and he would stop it by any means necessary, with all options now on the table. But the flower child Obama/Kerry nuclear negotiations now actually seem resigned to only trying to contain what Reagan defense expert Frank Gaffney now is calling the Iranian “Obamabomb,” to echo the Obamacare failure. But this is the one failure that can prove far more deadly to millions of Americans than even Obamacare.
[Originally published on Forbes]