September 7, 2011

America’s Obama-Induced Irregularity

Very little is as it should be in Obamaland.

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Note: This column went up at Pajamas Media and was teased here at BizzyBlog on Monday.
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Thirty-one months after Barack Obama’s inauguration, the nation has come down with a serious case of irregularity. It reveals itself in so many areas it’s impossible to enumerate them all. The three most visible manifestations of irregularity can be seen in the economy, energy, and in the administration’s exercise of bureaucratic power.

There’s nothing regular about how the economy has performed during the past three years. That’s when what I have been calling the POR (Pelosi-Obama-Reid) economy, more recently tagged the fear-based economy, began. Nancy Pelosi, Barack Obama, and Harry Reid promised to fundamentally change how the economy operated. To a large extent, they’ve gotten their way, and it’s not very likely that an opposition party controlling only one-half of one branch of government will be able to do much about it in the next seventeen months.

What a horrific change it has been. Until now, as Investor’s Business Daily graphically demonstrated in an August 26 editorial, every recovery since World War II has seen the economy bounce back to where it was before the preceding downturn in one, two, or at most three quarters. Under Obamanomics, we’re currently at eight quarters and counting since the most recent recession ended — and we’re still not there, regardless of whether you believe it began in December 2007, as the National Bureau of Economic Research contends, or in July 2008, as the normal definition of the word would dictate.

Here it is, graphically per IBD, and numerically per yours truly:

ComparingRecoveriesAt0811 GDPchained4Q07to2Q11

The numbers are even worse if you look at what has happened to the private sector, which has shrunk by over 1% since the end of 2007. Warren Buffett, who paradoxically insists that he’s not taxed enough while his firm keeps fighting with the IRS over tax claims going back to 2002, has stated that as far as he’s concerned, the economy won’t fully recover until “real per capita GDP gets back up to where it was before.” By the Buffett benchmark, we’re still in hole by over 3%.

If second-quarter growth stays at an annualized 1.0% in its final revision, and if the third quarter is at or above 0.5%, it will have taken nine quarters for the economy to officially recover, three times longer than any other post-World War II recovery. Keep in mind that those are two very big ifs. Many prognosticators believe that second-quarter growth will take another hit in the government’s late-September revision. Others, including 2001 Nobel Prize winner Michael Spence and lefty Robert Reich, have recently adjusted their odds that we’re either already or about to be in a double-dip recession to 50-50. Pimco’s Bill Gross says that the double-dip odds are “better than 50-50.” Clearly, anything beyond the mildest downturn will push the economy further behind what by historical standards is already an ancient original line of scrimmage.

Keynesian deficit spending in overdrive, while clearly a major contributor to the current malaise, doesn’t deserve all of the blame. The Obama administration’s abuse of Keynes’s theories in its stimulus plan’s energy “investments,” as well as its overall irregular energy policy, deserve dishonorable mention.

The American Recovery and Reinvestment Act directed billions towards solar energy companies and solar projects. During the first five months of 2009, before it could have been influenced by stimulus dollars, solar accounted for 0.132% of all U.S. energy production. Through May of this year, that percentage jumped to, uh, well, 0.145%. That may be the high-water mark. Solar companies are either going bankrupt or getting bought at fire-sale prices. A significant percentage of production is moving to China and elsewhere overseas. Thousands of U.S. jobs have been lost.

Meanwhile, the administration’s clear opposition to meaningfully increasing fossil-fuel production has never been more clear. Rather than speed up its absurdly slow approvals of deepwater drilling permits in the Gulf of Mexico — down from a monthly historical average of 5.8 to its current 1.7, at a cost of thousands of jobs — Obama decided to tap the Strategic Petroleum Reserve. Gas prices still went up. Only as the prospects of his reelection have begun to seriously diminish has Obama moved to appear more fossil fuel-friendly. But, conveniently enough, the administration’s most visible positive move thus far, the State Department’s conclusion that the 1,700-mile TransCanada pipeline won’t harm the environment, will have no immediate effect, and can be reversed later during other regulatory processes if he is reelected.

Never let it be said that the administration is against all pipelines. According to a recent compilation of related statistics by the National Center for Policy Analysis, “The Federal Register notes that more than 4,200 regulations are in the pipeline.” The aggressiveness and innate hostility of Team Obama’s highly irregular regulatory regime is unprecedented in postwar American history.

According to the Heritage Foundation, Obamacare alone has added over 6,500 pages to the Federal Register. The administration recently trumpeted how it will reduce regulatory costs by $10 billion over five years. Big deal. That $2 billion per year average is only 0.11% of the estimated cost of regulatory compliance to consumers and businesses of $1.75 trillion in 2009 alone. Heaven knows how much higher the annual cost is now. According to Wyoming Senator John Barrasso, the administration largely undid most of its alleged improvement in July alone, as it “proposed over $9.5 billion in new regulatory costs.”

The relatively firm dollar amounts cited don’t include the difficult-to-quantify costs of regulatory uncertainty. One thing which is certain is that these are also going up. Just ask Boeing, Gibson Guitar, the health insurance companies intimidated into silence, and other businesses affected by the federal government’s heavy regulatory hand.

Besides obviously anemic economic growth, the most visible manifestation of uncertainty’s impact can be seen in the government’s two different sets of job statistics, as seen below:

BLSseasAdjJobsHHvsEst0609ti0711

The more inclusive Household Survey, based on phone calls to homes, shows that the economy had almost 700,000 fewer people working in July 2011 than were working twenty-five months earlier when the recession ended in June 2009. But the Establishment Survey, based on contacts with employers, shows that almost 700,000 more Americans were working for private and government employers. The overall effect is that there are almost 1.4 million fewer Americans who are either working on their own or working at entities the Establishment Survey is unable to find or estimate. About the only way to interpret this anomaly is that, on a net basis, many Americans who might in more regular times have considered starting a business simply aren’t doing it. The engine of future economic growth isn’t engaging.

The danger is that we as a nation may come to accept our administration-induced chronic irregularity as the way things will be indefinitely, or as what Obama cheerleaders in the establishment press try to tell us is “the new normal.” If we do, we won’t recognize our country in several years — which is why the irregularity must be stopped in seventeen months.

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9 Comments

  1. Tom,
    More thoghts on this article.

    You argue, that RON Pauls foreign policy will eventually lead us to Nuclear War, Well tell me Tom, after reading this article and reflecting on it, how will Obama’s and the NEOCON – RINO – Interventionist Republican policy keep us out of Nuclear war?
    Ron Paul is right you know, there will be a payback. Afterall 911 was a payback. And as a Roman Catholic to another Roman Catholic, what would Jesus say about all of this? What does the Pope backed by the Magisterium have to say and do you fell it is relevant?

    Comment by Greg — September 7, 2011 @ 10:17 am

  2. #1, I don’t get the linkage.

    But wow, 9/11 “was a payback.” IOW, “we” deserved it (that’s what “payback” infers). Really? All those innocent fathers, mothers, brothers, sisters, sons and daughters deserved it? Or did they deserve it because, I don’t know, they were part of the machine or something?

    As to the Church:
    - “Righteous anger, and the acts which flow from it, intend the correction of vice (both for the good of the individual sinner and the common good), the restoring of the order of justice disturbed by sin, and the restraint of further evil.”
    - “In this regard Just War doctrine gives certain conditions for the legitimate exercise of force, all of which must be met:
    1. the damage inflicted by the aggressor on the nation or community of nations must be lasting, grave, and certain;
    2. all other means of putting an end to it must have been shown to be impractical or ineffective;
    3. there must be serious prospects of success;
    4. the use of arms must not produce evils and disorders graver than the evil to be eliminated. The power of modern means of destruction weighs very heavily in evaluating this condition”

    You can argue that #1 works against preemptive war, but Saddam’s damage was already lasting (aid to jihadists), grave (pun: mass graves), and certain (to continue).

    #2 is self-evidently true to all but those in the delusional and/or dishonest “inspections not war” crowd.

    #3 is obvious.

    If anything, our worries about #4 have overly impeded #3.

    If we lose the peace, it will be because we haven’t sufficiently prosecuted a just war.

    Show me where I argued myself (not by linking) that Paul’s foreign policy will lead to nuclear war. It’s not a good idea to stuff words in the host’s mouth.

    Comment by TBlumer — September 7, 2011 @ 10:44 am

  3. They don’t deserve it. No one deserves that treatment, we should turn the other cheek. That being said, an interventionist policy provokes.

    Comment by Greg — September 7, 2011 @ 10:55 am

  4. I muslim eyes it was a payback – Do you remember them dancing in the street in the middle east? Celebrating? I remember the video to this day.

    Comment by Greg — September 7, 2011 @ 10:57 am

  5. all other means of putting an end to it must have been shown to be impractical or ineffective? So you think our government used all other means?

    Comment by Greg — September 7, 2011 @ 10:58 am

  6. Show me where I argued myself (not by linking) that Paul’s foreign policy will lead to nuclear war. It’s not a good idea to stuff words in the host’s mouth.

    Okay, I will look for it.

    Comment by Greg — September 7, 2011 @ 10:59 am

  7. #3, What “interventionist policy” provoked 9/11?

    #4, I remember it too. It wasn’t payback. It was raw, evil aggression.

    #5, Yes, all practical and effective ones.

    #6, the most you’ll find is that I think his unilateral, near-instant pullback ideas are dangerous, and his idea that Iran having nukes is acceptable is unacceptable. I think we should pull back from certain places too.

    Comment by TBlumer — September 7, 2011 @ 11:08 am

  8. Tom you wrote.
    “Show me where I argued myself (not by linking) that Paul’s foreign policy will lead to nuclear war. It’s not a good idea to stuff words in the host’s mouth.”

    I could not find it,
    I appologize,
    I was wrong to say that about nuclear war.

    Comment by Greg — September 7, 2011 @ 11:52 am

  9. Greg, I appreciate your apology. It took me about 50 years to get to where you went with that. I think you beat me by a little bit. :–>

    Comment by TBlumer — September 7, 2011 @ 12:03 pm

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