The Un-Recovery

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There’s an old saying that when all you have is a hammer, every problem you encounter looks like a nail. Thus, it should come as no surprise that, despite a slew of economic indicators which suggest that our so-called economic recovery is virtually non-existent, the Obama administration continues to pursue its progressively-inspired infatuation with government-driven “solutions” to the crisis. To use a word that is becoming an indispensable part of the mainstream media’s efforts to mitigate the obvious failures of this administration, one can only wonder how many more “unexpected” economic developments Americans can tolerate.

The statistics paint a bleak picture. Last week, the employment rate increased to 9.1 percent, as only 54,000 jobs were created in May, the fewest number in eight months. Half of those jobs were created by one company, hamburger giant McDonalds. Home prices have dropped back to 2002 levels, “down 33 per cent from a 2006 peak, compared to the 31 per cent decline in the [Great] Depression.” This means that ten years of equity one might have built up in one’s home has essentially disappeared. Gas and food prices have been soaring, which in turn blunts the consumer spending necessary to buoy the economy. And the Institute of Supply Managing Index (ISM) which tracks manufacturing activity, and the American Data Processing Index (ADP), which tracks hiring trends, along with the housing data, point to a 2 percent or less growth rate, well below the 5 percent or higher rate that normally accompanies an economic recovery.

Yet even those employment totals may be a mirage. As the NY Post’s John Crudele points out, job creation numbers produced by the Bureau of Labor Statistics are comprised of “nonsensical, worthless guesstimates that are meant to be corrected many times before the number is truly to be believed.” Crudele then noted that the “consensus on Wall Street is that the government will announce that 200,000 new jobs were created in May,” adding that “if [last]Friday’s number isn’t better than expected, then watch out. It means that job growth is so slow that even the BLS’s magic stats can’t make it look good.” Nearly four-fifths less job creation than what the “experts” predicted, and even that number may be an upside mirage? At what point does “not good” become “catastrophic”?

Apparently never, if one assumes that a glaring failure of current economic policies might lead the Obama administration to reconsider its approach. Despite an $800 billion-plus stimulus package accompanied by a promise that it would keep unemployment under 8 percent and two rounds of Quantitative Easing (QE1 and QE2) designed to stimulate demand, instead, the dollar has devalued, leading to the inflation demonstrated in food and fuel. Yet this administration appears grimly determined to inflict even more Keynesian economic, government pump-priming “solutions” on the country.

In fact, QE3 is actually being contemplated. Once again, despite the reality that injecting liquidity into the system over the past two-and-a-half years has done little more than prop up the stock market, economic anemia caused by ideological rigidity remains the order of the day.

Why does the economy remain largely un-stimulated? Because lending by banks remains tight. Why does lending remain tight? Economist Larry Kudlow explains that “most of [QE2] has served merely to depreciate the dollar. And most of those cheaper dollars are on deposit at the Federal Reserve, where banks are earning 25 basis points for safety and risk aversion. In other words, the majority of that new money is not circulating throughout the economy.” Thus, just as the $700 billion dollars spent by Congress during the banking crisis of 2008 was directed at institutions “too big to fail,” even as Main Street America was getting hammered, large financial institutions are once again prospering, even as the public remains mired in a jobless “recovery.”

This is nothing more than crony capitalism on steroids. And when one couples it with the uncertain costs and stifling regulations of the new finanical regulation bill (FinReg) and ObamaCare, all of which have to be factored into hiring decisions, businesses who might consider putting on new workers remain hesitant. The Wall Street Journal’s Daniel Henninger explains, “[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.” Even more to the point, he notes the reality that both FinReg and ObamaCare “rose from the table as 2,000-page laws,” meaning that businesses across the nation will have to wait “while the bureaucracies struggle to interpret 4,000 pages of ‘smart’ legislating.”

That businesses are already constrained by 4000 pages of unknowable regulation is troubling enough. That they might be penalized further by the capricious decisions and interpretations of a bureaucrat in one of the most anti-business administrations in the history of the nation is a back-breaker.

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  • geez

    We must stop this madman and his administration of thieves in 2012 or watch our children become chained to debt, turning over the USA to them as a third world country. Is that the legacy we want to define us? NO! Vote vote vote in 2012.

  • Wesley69

    It will end when this current administration goes down to defeat in 2012.

    Is there a case for Obama's gross mishandling of the economy??? You bet.

    -A trillion dollar stimulus that did not stimulate, but sure took care of special interests. Unemployment is still at 9.1%.

    -ObamaCare that will put the nation into the poor house.

    -No incentives to smaller businesses – threatening $250,000 with tax hikes.

    -More regulations that make doing business more expensive. Growth for the last quarter is at less than 1%. If there was a recovery, it looks like its sputtering.

    -More public worker jobs paid by tax money than private company jobs.

    -More direct transfers of wealth to those doing nothing to earn these transferd, but it does get votes. One in seven Americans now get Food Stamps.

    -Sweetheart deals to unions – trying to pass Card Check to force companies to have unions & collect more union dues that eventually go to Democrat reelection campaigns.

    -Quantitative Easing 1 & 2 that has flooded the market with dollars causing inflation. More Easings will lead to hyper-inflation. The inflation rate for individual itmes is over 10%. Food and gasoline prices are still climbing. Hyper-inflation will destroy individual savings and severely impact anyone on a fixed income.

    -Pushing Green Energy, but putting regulations on off & onshore drilling operations making the cost of energy higher. Obama's granting new oil leases does not mean more drilling. One needs a separate permit for that.

    -Supporting ethanol production for fuel that has lead to higher grain and meat prices.

    -Continued deficit spending that has ran up the US debt that will burden future generations.

    -Refusal to make even modest changes in Social Security.

    The list can go on, but the reader should get the picture. And this guy THINKS he deserves a second term????? What does he take us for, A NATION OF FOOLS… Oh wait, we elected Obama without knowing much about him the first time, despite his Marxist friends and his racist pastor.

    • Jim_C

      Wesley, you need to get you down to Rev. Wright's church and get you some gospel thrown your way!

      • Wesley69

        Something tells me it's not the gospel I was raised on.

  • paddydonovan

    Rattner, appearing on Morning Joe this morning, finally admitted that the Obama stimulus plan went to a " Hodge Podge of things, political compromises ". At least one of his minions had the balls to admit that it was mainly for the purpose of payouts and paybacks for his agenda and getting him elected. This is an abominable fraud on the American people and should be looked into by the media……………..oh wait

  • Jim_C

    So in other words…the glass may look half full, but it is actually half empty, Mr. Ahlert?

    • tanstaafl

      At this point the glass is completely empty; but like the emperor's new clothes, it is seen, but not noticed.

    • coyote3

      That kind of what I was thinking when I was talking to a friend of mine from Indiana, the other day. He said that as a result of the state defunding planned parenthood, the state my lose its medicaid funding. We looked at that possibility and concluded that there was really little downside, even if that occured. Actually, they got the legislation, and the only result of defunding would be less medical providers willing to accept medicaid. Another potential benefit would be people who would otherwise be medicaid eligible, might just move to other states. Lastly, there is the possibility that the medicaid system, at least for that state would disappear altogether. Now, the state may back down, or the federales may blink, but this is another example of looking on the bright side of things.

  • Steve Chavez

    Obama needs a "FAILOUT" which is a bailout of his own failed policies! The media will aid in that "FAILOUT!"

  • SeaMystic

    There was an excellent book called "None Dare Call It Conspiracy", which was BANNED in various countries including mine which is Canada, as well as the U.S.A..
    This BOOK focused on the background manipulation of a Capitalist/Communist Conspiracy. Which enriched the Banking community and undermined Democracies.
    In a Mystical sense it points at the NEPHILIM attempt to enslave humanity in a ONE WORLD GOVERNMENT, which comes about through National and Individual Debt Slavery, using COMPOUND INTEREST. The National debt drowning our Democracies, by attempting to counter act Totalitarian processes such as Communism, Islam and Nazism etc., in essence the many headed Beast from the Astral, mentioned in Revelations.
    Presently Islam is the Astral head of the Beast we are fighting.
    As Guardians of Democracy sign the "Ban Islam" petition for starters at:

    Our present on going War transcends many Octaves of existence. One of Shakespearean comment I Love is:
    "There are many things in Heaven and Earth Horatio, that is not found in your Philosophy".

  • ObamaYoMoma

    And yet the world continues to turn?

    Turn downward.

  • Indioviejo

    Crony capitalism on steroids, plus "Big Brother" directing our lives, can we realistically endure four more years of this "man made disaster" ?

  • bearone7777

    I am a "BELIEVER" in Jesus Christ, and in being "ONE" I not only will support Israel because it is GODS Holy-Land, but I will also say what I am about to say, and it has not ONE BIT OF REASON TO DEAL WITH THE SO-CALLED PRESIDENTS RACE. SINCE HE HAS BEEN IN OFFICE THEY-[HIS ADMINISTRATION]-HAVE JUST SCREWED UP EVERYTHING TO DO WITH THE ECONOMY., and I am not going to say that I am sorry for saying that. WHY? Because it is the "TRUTH" "THE WHOLE TRUTH" So help me GOD ALMIGHTY!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

  • Ageofreason

    I think it's time to recognize that the current administration does not want America strong economically, or any other way. Obama is a destroyer. The evidence is in, and the conclusion that anyone may draw from it is incontrovertible: Obama and his henchmen, like Stalin, and Castro, and Mao before him, want one thing…to drag the creators of wealth into the gutter, to cut them off at the feet so that all Americans are equal as they crawl on their bellies in the mud. One can only hope fervently that one day he will stand trial for all the misery he has caused. His policies are best labelled as "statist," i.e. the government takes over the decision-making by taking it away from individuals That is what both communism and facism do, two different faces of the same beast.