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The Real State of the Union
Posted By Tom Blumer On February 19, 2013 @ 12:45 am In Daily Mailer,FrontPage | 30 Comments
In his State of the Union speech on February 12, President Barack Obama failed to note that this nation’s 16th President, Abraham Lincoln, was born on the same date 204 years earlier. Perhaps that’s because it was Lincoln who said: “Better to remain silent and be thought a fool than to speak out and remove all doubt.”
Obama removed all doubt about his foolishness — at least in his public statements, though possibly not in regards to his and fellow progressives’ larger agenda — when he told the assembled senators and congressmen that, concerning the state of the economy, “[W]e have cleared away the rubble of crisis, and can say with renewed confidence that the state of our union is stronger.”
No it’s not, and all of the insufferable media cheerleading describing jobs reports as “mostly encouraging” even when the official unemployment rate goes up, and about “A U.S. Economy That’s Strengthened Over [the] Past 4 Years,” won’t change that.
The evidence could take up a book. I’ll limit mine to three areas: employment, student loans, and housing.
A February 1 Investor’s Business Daily editorial, which appeared shortly after the government released its January jobs report, laid out the primary truth about the current job market:
It took an average of just 24 months to regain all the jobs lost in the previous nine recessions. But at the current Obama job-creation pace, it will take about 80 months to regain those lost jobs.
After four years America remains in a jobs depression as great as the Great Depression. But the crisis isn’t seen in that light because the country isn’t confronted daily by scenes of despair like the 1930s photographs of bread lines and soup kitchens …
… The jobless today are much less visible than they were in the 1930s because relief is organized differently.
Zuckerman’s subheadline succinctly detailed the point just made: “Twelve million out of work, 48 million on food stamps, 11 million on disability.”
Even those glum statistics don’t adequately capture the entire problem. Per Zuckerman, “The only work that has increased (since the November 2007 peak in nationwide employment) is part-time, and that is because it allows employers to reduce costs through a diminished benefit package or none at all.” Many employers are also clearly doing all they can to keep all but a few key employees from toiling more than 30 hours per week, because ObamaCare will compel them to treat employees who work 30 or more hours as “full-time,” forcing them to either provide mandatory health insurance coverage or pay a fine if they don’t.
Additionally, the jobs that are being obtained are going overwhelmingly to workers who are 55 and older, where employment (again, largely part-time) has grown by 4 million during the past four years. Employment for everyone else during that same period has decreased by almost 3 million. The overall labor force participation rate is back to where it was during the early 1980s, an era when a much higher percentage of spouses voluntarily stayed home to raise their children.
The growing crisis in the government’s student loan programs may be the least publicized trillion-dollar mess in world history. Outstanding balances have grown by $400 billion during just the past four years. During that time, the percentage of loans which is 90 or more days delinquent has skyrocketed from an already awful 8 percent to 11 percent, with most of that increase occurring during just the past few reported quarters.
Why is this happening — and why will the situation probably get much worse? High school grads are going on to college at a record high percentage, but an unprecedented percentage of those who do are ill equipped to succeed in their studies. When they fail, their student loans don’t go away, not even in bankruptcy. If they can get jobs, they probably won’t pay very well. Their student loan payments act as an effective millstone hindering their ability to otherwise advance in life.
The alleged recovery in the housing industry is one of the most heavily publicized economic myths going. We’re supposed to be excited that new home sales are achieving three-years highs, even though today’s level is barely back to where it was during the early-1980s recession, when the U.S. population was 25 percent lower. Today’s level of homebuilding activity is about half of what it should be in a truly healthy economy. Though it’s clear that the housing bubble engineered by government frauds by design Fannie Mae and Freddie Mac and assisted by previous Federal Reserve Chairman Alan Greenspan caused home prices to increase beyond reason during the previous decade, the fact remains that inflation-adjusted home prices are right back where they were in 1990. So much for a home being a great long-term investment.
Uncanny in its inability to learn from past mistakes, risky lending policies and decisions have taken yet another government housing entity, this time the Federal Housing Authority, to the brink of insolvency. Last week, the Government Accountability Office “released a report stating … (that it) is a ‘high risk’ entity.”
Lincoln said something else about foolishness which ties directly into Obama’s State of the Union address: “You can fool all the people some of the time, and some of the people all the time, but you cannot fool all the people all the time.” As the nation’s Obama-induced economic malaise continues, the roster of those who are being fooled will continue to shrink.
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