January 5, 2014

Five Myths Propping Up the Obama Presidency

How many will crash by November 2014?

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This column went up at PJ Media late Thursday night and was teased here at BizzyBlog on Friday morning.

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As 2013 ends, President Barack Obama’s approval rating is at its lowest point in his five-year tenure. Imagine where it would be if the establishment press treated him the way it did George W. Bush.

The president’s media apparatchiks are propping up what’s remains of the President’s popularity with five myths.

1. The economy has become strong, and getting stronger.

Media reports have been calling recent job gains “robust.” Hardly. This year’s estimated job growth of almost 2.4 million is still only 60 percent of what was achieved annually on a population-adjusted basis for a full six years during the 1980s:

2013JobGrowthVs1983to1988

Job growth should be far greater, because there is still so much ground to make up from the disastrous POR (Pelosi-Obama-Reid) economy-driven recession of 2008-2009.

It’s bad enough that payroll employment is still 1.3 million below its January 2008 peak. It’s worse that employment in the Household Survey is 2 million shy of where it was in that same month. If we’re lucky and this plodding progress continues, it will have taken almost seven years for that more comprehensive measure of employment to return to where it was before the recession began — and several more years, if ever, before a recovery in employment catches up to eligible adult population growth.

Almost 40 percent of the reported economic growth during the first three quarters of 2013 came about because of inventory build-ups. Tentative results from the recent Christmas shopping season show that consumers haven’t been buying enough to significantly deplete those stockpiles. That does not bode well for production during the fourth quarter or early 2014.

2. The government’s finances have stabilized.

We’re supposed to be impressed that the Federal Reserve will only be creating $900 billion a year in funny money instead of $1.02 trillion. The truth remains, as outgoing Fed Chairman Ben Bernanke told Congress in July, that without this historically unprecedented level of artificial stimulus, “the economy would tank.”

The Fed’s decision to barely taper its stimulus to $75 billion per month from $85 billion is really a vote of no confidence in the government’s ability to survive on its own. Before the taper, the Fed was financing $540 billion, or about half, of the government’s annual trilion-dollar 2012 deficit (the rest goes into sopping up mortgage-backed securities). The taper only reduces that to $480 billion, which is about 80 percent of the government’s projected fiscal 2014 deficit. This means that Bernanke & Co., soon to be Janet Yellen & Co., believe that precious few others want to own additional Treasury securities. They are probably right.

3. Obamacare will work out.

Most of the impact of Obama’s “Lie of the Year,” better described as a five-year series of dozens of lies — that “if you like your insurance plan, doctor, medical provider, and drug regimen, you can keep them” — has yet to hit home.

We have no idea how many of Obamacare’s vaunted 2 million enrollees will actually pay their premiums.

We have no idea how many will game the system by paying a single month’s premium and then milking the system at insurers’ and providers’ expense for another 60-90 days, as regulations now permit.

We have no idea if the government will ever be able to build the infrastructure elements it from all appearances deliberately chose not to build, including but certainly not limited to a legitimately secure web site and a system for paying tax subsidies to insurance companies.

We have no idea whether several states, e.g., Iowa, Maryland, Oregon, and others, can recover from their own calamitous rollouts.

We have no idea what the extent of the government-caused — and I would argue, likely government-orchestrated — chaos will be once patients who believe they have enrolled and are covered show up at doctors’ offices and find out they aren’t.

Finally, we have no idea how big the health insurance industry’s shortfall will be once it begins paying out claims. That there will be a shortfall is a virtual certainty, because Obamacare’s enrollees have from all appearances been older and sicker than the general population, and the program has utterly failed to sign up healthy young people in sufficient numbers. Whatever the deficit is, I certainly hope that people who should know better stop calling it a “bailout” when the government has to reimburse the industry. Though they seriously erred in failing to fight the law before it was passed, this disaster is not their fault.

4. We’re running out of time to stop global warming.

Even though we’re at 17 years and counting of no net increase in global temperatures, the Environmental Protection Agency still acts as if warming is settled science, and silences any dissent against dogma. Companies are being driven out of business and workers are losing their jobs because “scientists” would rather rely of faulty computer models than look out their windows.

5. Our “smart diplomacy” is holding our enemies at bay.

The administration continues to slavishly adhere to a long list of naive ideas about foreign relations.

In the real world, Iran continues to make progress towards possessing nuclear weapons. North Korea continues its attempts to delivering such weapons. The situation in Iraq, the war we won in 2008, is decaying. China and Russia are clearly emboldened. The White House and Secretary of State John Kerry are either okay with all of this, or clueless. Meanwhile, our military is being depleted and demoralized.

It seems likely that by fall the public, despite the press’s best efforts to cover up and obfuscate what’s really happening, will figure out that two or more of these five myths are utter fictions. This will make congressional and senatorial elections especially dangerous endeavors for Democrats and leftists throughout the land. Just how dangerous depends on how aggressively the President’s opponents work to expose the truth and overcome their annoying go-along, get-along tendencies.

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2 Comments

  1. Regarding point #2, it can’t be emphasized enough that inflating the money supply via deficit spending is a central core principle of Obamanomics. It is wealth redistribution via stealth taxation. The reason why is that they have absolutely no intension what so ever in winding out this money. The irony of it is that money printing is the most insidiously regressive of all tax schemes by pols and bureaucrats against the poor.

    Obama and Bernanke acted in concert to convert all the financial losses by the private sector into government revenue. The whole point of deficit spending was to dole out this ill gotten wealth transfer to core political supporters in the name of saving the economy. Only a thief would characterize their activity of stealing as a benefit to all via the modified “Broken Windows Fallacy”. They literally substituted money printing for wealth creation. That is how they were able to get away with not spiking the inflationary cycle, money printing to replace financial losses, hence the liquidity was squeezed out of the private sector into government hands.

    Comment by dscott — January 6, 2014 @ 7:59 am

  2. Building upon my previous comment I have to point that Obamanomics via the threat of ObamaCare caused employers to re-evaluate their employment policies to take into account expensive government mandates thus distorting the economy even further substituting part time jobs in place of full time positions. So what does Obama do? Double down again by saying the minimum wage has to be raised to allow people to make a living. Of course there are three main problems with this attempt at mitigating the ObamaCare policy failure.

    First, minimum wage workers (those filling unskilled jobs) were never meant to make a living off such a wage. Those type of positions were useful training exercises for the inexperienced new workers and supplemental income for retired people and those who needed a few extra dollars. By raising the minimum wage you induce employers to rethink the existence of the unskilled work slot by automation. Hence “productivity” increases as wage increases. Contrary to populist opinion, higher productivity doesn’t support higher wages, it is caused by employers responding to higher wages.

    Secondly, what Obama is really saying here is that he admits his policies have distorted the job market and so he intends to mitigate his failure not by undoing his mistake but by doubling down on it. The “living wage” argument for minimum wage is the deliberate privation of the poor and destruction of the middle class into permanent serfdom. This is the Liberals “new normal” for the wage earner. A permanent impoverished class of workers forever beholding to the government. Liberals literally want people to believe that getting the minimum wage is where the bar should be lowered for everyone’s income expectations. Didn’t Obama say that at some point you made enough money and didn’t need to make more? Attainment of middle class status is no longer needed.

    Thirdly, insisting on any increase in the minimum wage means that all other wage earners must also get a raise otherwise why work any semi-skilled or skilled job at all? You can’t expect a semi-skilled worker to get the same pay as an unskilled worker and for that matter the same goes between the semi-skilled and the skilled. The ripple effect through the economy would be devastating to the poor as all their basic needs would cost more thus negating any wage increase. Meaning that Liberals intend to claim credit for hiking the salary of the poor only to take it back via higher priced basic goods. Only a Liberal could be so deceitfully cruel in attempting to advance themselves at the expense of others. The only way one could claim there was a net gain would be to under count inflation, but that shouldn’t surprise us since that is what is going on now via the GDP deflator and claiming that printing money for government spending contributes to the GDP.

    In fact, now that I think about it, creating an inflation psychology in the market place like under Jimmy Carter is the Liberal goal here. The expensive regulations under ObamaCare in an inflationary environment would be simply passed on to the consumer as the cost of doing business since business owners would have no need to worry about pricing competition. In an inflationary market, people “have” to buy now because the price will predictably rise tomorrow, hence “savings” is reduced to consumption spending today to not spend more tomorrow on the very same product. In the process, innovation is crushed since there is no need to invest in R&D for the next product or improvement since those products will fly off the shelves due to their own rising value to the consumer. Hyper inflation inevitably follows since if you don’t buy more today, you won’t have enough money for it tomorrow, i.e. people start hoarding causing a shortage.

    It took a Jimmy Carter to have a Ronald Reagan, Obama is working really hard to give us a new one.

    Comment by dscott — January 6, 2014 @ 8:57 am

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