The further to the left or the right you move, the more your lens on life distorts.

Friday, October 03, 2014

Numbers, Not Words

This past week, Barack Obama attempted another of his many (increasingly tedious) pivots, with the clear intent of improving democratic chances in the November elections. He told audiences on "60 Minutes" and again at Northwestern University that the economy has improved greatly and that Americans simply don't recognize the improvement as yet. There is of course, a significant body of hard evidence that refutes the president's claim, but no matter. Obama and the Democrats seem to believe that words define reality and that hard economic numbers should be ignored. Better to promote fantasy that to act to improve reality.

When "60 Minutes" asked what could be done to make the economy improve even more, Obama relied on his old standbys—income inequality, the minimum wage, and other vaccuous "policies" that have done nothing to promote private sector growth, increase middle class jobs, and improve incomes.

The Wall Street Journal comments:
On CBS 's "60 Minutes" on Sunday Mr. Obama answered a question about economic anxiety by offering another increase in the minimum wage. But the Nancy Pelosi Democrats raised the minimum wage in three stages to $7.25 an hour in 2009 from $5.15 in 2007. If mandated wages are so beneficial to the American worker, where is the evidence?

The Census data show that every income group that was supposed to benefit from the higher wages is worse off than before the minimum wage was increased. This is because the benefits of mandated wage increases for some workers are dwarfed by the overall negative economic trends of slower growth and reduced opportunity.

Another culprit in this skewed economic recovery has been monetary policy. The Fed's QE exertions have been explicitly targeted at raising asset prices, such as stocks and real estate, that are disproportionately held by the affluent. Meantime, Americans without such assets have received a pittance on their savings. The White House has been a stalwart supporter of these Fed policies.
Based on recent history, it appears that class warfare demagoguery is a election winner, but when class warfare is translated to public policy, the result hurts the very people who give their votes to those who demonize "the rich."

But after six years of 'malaise,' the public may be catching on. Again from the Journal:
The good news is that the public may be ahead of the politicians in seeking this change, and it is certainly ahead of the media. A survey this year by the Global Strategy Group found that by 59% to 37% Americans prefer a political candidate who focuses on economic growth to one who focuses on fairness. Thus is Mr. Obama creating, albeit unintentionally, a new opening for the politics of growth.
It would be ironic, indeed, if the failed progressive policies on the economy espoused by Barack Obama become a catalyst for a more rational, reality based pro-growth, pro-jobs, policies that are based on numbers, not words.


Conservative commentator George Will comments on Obama's pivot:
The president went to the state of Illinois to brag about the economy. Illinois has 300,000 fewer jobs than it had in 2008. For the last four years in the state of Illinois, the number of new food stamp recipients has increased twice as fast as the number of new job recipients. He was speaking in Illinois on a college campus. He did not mention that 40 percent of recent college graduates are either unemployed or underemployed -- that is, in jobs that don't require college degrees -- and one in three recent college graduates is living at home with their parents.

Now, the president, we just heard, disparage trickle-down economics while bragging about doubling the stock market value. He is practicing trickle-down economics by doubling the stock market. He, and, for six years now, and most recently under his choice to be head of the Fed, Janet Yellen, have had zero interest rates, the intended effect of which is to drive people out of bonds and into assets like farm land, but particularly into stocks. That is why this has been a boon to the 10 percent of Americans who own 80 percent of all the directly owned stocks. And this is why 95 percent of the wealth created in the last six years have gone to the dreaded top one percent.
But why not? Most of the $20,000-a-plate fundraising events this president frequents, often to the exclusion of his other duties, solicit his buddies in the 1 percent. Can you say—hypocrisy?