Michael Boskin, former chair of the Council of Economic Advisers under the first President Bush, confirms just how bleak the economic picture is:
The Obama administration’s “summer of recovery” has morphed into a summer of economic discontent amid anxiety over the weakening economy. The greater than 4% growth and less than 8% unemployment envisioned by the president’s economic team are nowhere to be seen. Almost everything that is supposed to be up—the economic growth rate, the stock market, bond yields—is down. And almost everything that is supposed to be down—unemployment-insurance claims, new mortgage delinquencies—is up. …
How bad is it? In the data for the last few weeks and months, real personal disposable income was flat; core capital goods orders, a precursor of business capital spending, declined 8%; new home sales fell 12.4%, existing sales 27%, despite record low mortgage rates; single-family housing starts declined 4.2%; building permits, foreshadowing future construction, fell 1.2%; initial jobless claims spiked to over 500,000, leading forecasters to expect at best meager short-term private-sector job growth; the Kansas City, Philadelphia and New York Fed manufacturing indexes fell; and the trade deficit increased, as exports fell and imports rose.
Obama has done worse, much worse, than prior presidents when it comes to economic recovery. (“Compared to the 6.2% first-year Ford recovery and 7.7% Reagan recovery, the Obama recovery at 3% is less than half speed. The unemployment rate would now be 8% or lower at those higher growth rates.”)
As Boskin explains, Obama needs to reverse virtually every policy he has undertaken: slash spending, not increase it; cut taxes, not raise them; and address entitlements, not pass the buck to a do-nothing commission. It would certainly help if he were to stop imposing, and in fact cut back on, the draconian regulations, fees, and mandates he has saddled employers with.
What are the chances of this happening in the next two years? Very small. And accordingly, so are his re-election prospects.
