Reflecting on many of last week’s headlines concerning the weak economy, Daniel Henninger’s WSJ article, Obama’s Cloud Economy, provides some interesting insight into how, as the subheading states, “the economy is flying without instruments because of the White House’s policy choices.” YES, this is definitively Obama’s economy, and it’s murky as ever.
Henninger points to what he coins as Obama’s “McCain moment” in that hyperpartisan speech at George Washington University, where he ridiculed Paul Ryan’s budget and the Republican leadership at a time when they were “actually offering to take part-ownership of the economy by spending the year in dense discussions about the deficit and spending.” Instead, Henninger writes, “With that speech, Mr. Obama kicked off his 2012 presidential campaign, and in so doing politicized the economy.”
“The timing was not good. Whether it's this week's report that consumer confidence has fallen to a six-month low or anecdotal conversation ("So what do you think happens when QE2 ends?"), the sense grows that people are starting to freak out over the economy—over persistently high unemployment and persistently weak growth.”
Though the purveying governmental winds express the possibility of an economic recovery, “the informed betting is going the other way” with forecasters reducing estimates for economic growth throughout the rest of the year.
“It's ironic indeed that Barack Obama, in a slap at his predecessor, routinely said that his policies would be "smart" this or "smart" that. A "smart" economy would at least have the virtue of clarity for the purposes of planning and capital investment. The Obama economy does not. Economic decision-makers—from 401(k) investors to Fortune 500 CFOs—are flying instrument-less through the clouds because that is where the policy choices made by this White House have left them.”
True to form in the Keynesian economic model, the Obama Administration, with Congress’s approval, interjected massive stimulus and budgetary spending in 2009 as the solution to our economic woes. “Barack Obama, believing that $800 billion of injected "demand" would lift the economy, decided to devote his political capital and congressional majorities to reorganizing two major American industries, health care and finance. “ Henninger continues:
“Merits aside, both creations rose from the table as 2,000-page laws. Hundreds of thousands of economic actors across the country now wait while the bureaucracies struggle to interpret 4,000 pages of "smart" legislating. What evidence do liberals cite for their vestigial faith that these industries, employing millions of people in complex daily activities, can grow long term at greater than 3% from beneath the morass of Dodd-Frank and the Obama health-care law?”
With a housing market in shambles and regulatory schemes in play to ‘fix’ it, on top of trade agreements Obama’s holding hostage in exchange for more stimulus spending, not to mention the undeniably bad news of a 9.1% unemployment spike, Henninger concludes:
“It is sometimes unfair to tag presidents with blame for an underperforming economy. Not this time. This president made conscious policy choices during a deep recession to reorder vast swaths of American industry. Strong-performing economies need clarity. Barack Obama has given ours indecision stretching to the horizon. And economic growth, like a long gray day, sits still below 3%.”
As Reagan posed the question to Americans over Carter’s failing economy, so the cycle repeats itself: Are you better off than Obama promised you’d be? We’re living the answer to that particular question, and as Henninger began his article, so we end ours:
“You just know the American economy is out there somewhere. If only someone knew which buttons to push to retrieve it from the storage cloud.”
