Not Only Merely Bad

According to the British Independent, the Obama Administration is very concerned that Greece might exit the Eurozone.

The Obama administration will pressure European governments not to let Greece fall out of the eurozone before November's Presidential elections, British Government sources have suggested…

American officials are understood to be worried that if they decide Greece has not done enough to meet its deficit targets and withhold the money, it would automatically trigger Greece's exit from the eurozone weeks before the Presidential election on 6 November.

They are urging eurozone Governments to hold off from taking any drastic action before then – fearing that the resulting market destabilisation could damage President Obama's re-election prospects. European leaders are thought to be sympathetic to the lobbying fearing that, under pressure from his party lin Congress, Mitt Romney would be a more isolationist president than Mr Obama.

President Obama likes to talk about his "top priorities". These are the only priorities he has but he has dozens of them. If the above story is accurate, we can infer that some top priorities top others.

I am not sure whether the following counts as a top priority or a priority at all, since the President isn't talking about it. From Jeff Kearns at Bloomberg:

American incomes declined more in the three-year expansion that started in June 2009 than during the longest recession since the Great Depression, according an analysis of U.S. Census Bureau data by Sentier Research LLC.

Median household income fell 4.8 percent on an inflation- adjusted basis since the recession ended in June 2009, more than the 2.6 percent drop during the 18-month contraction, the research firm's Gordon Green and John Coder wrote in a report today. Household income is 7.2 percent below the December 2007 level, the former Census Bureau economic statisticians wrote.

"Almost every group is worse off than it was three years ago, and some groups had very large declines in income," Green, who previously directed work on the Census Bureau's income and poverty statistics program, said in a phone interview today. "We're in an unprecedented period of economic stagnation."

Of course, an alternative to not talking about the economy is lying about it. James Pethokoukis reproduces this exchange:

Willie Geist, MSNBC: What would you say to that same person that said, 'Well, that hasn't worked for four years. I haven't had the job over time, it's time for a change.'

Stephanie Cutter, Obama deputy campaign manager: Well, I think that worker probably has a good understanding of what's happened over the past four years in terms of the president coming in and seeing 800,000 jobs lost on the day that the president was being sworn in, and seeing the president moving pretty quickly to stem the losses, to turn the economy around, and over the past, you know, 27 months we've created 4.5 million private sector jobs. That's more jobs than in the Bush recovery, in the Reagan recovery, there's obviously more we need to do, and as I said to Mika at the at beginning of the program, I think that unemployed worker probably sees one person in this race trying to move the country forward and that's the president.

Pethokoukis replies:

From the end of the recession in June 2009 through July 2012 — the first 37 months of the Obama recovery — the U.S. economy has generated 2.7 million net new jobs. From the jobs low point in February 2010, the U.S. economy has generated 4 million net new jobs.

From the end of the 1981-82 recession through the end of of 1985 — the first 37 months of the Reagan recovery — the U.S.created 9.8 million net new jobs. And if you adjust for the larger U.S. population today, the comparable figure is more than 12 million jobs.

He provides a nice chart to compare the two:

Obama's economic record isn't only merely bad; it's really most sincerely bad. Job creation has been dismal. Incomes have declined faster during the recovery than during the recession. Oh, and there is that silly business about the federal deficits. From Fox News:

The nonpartisan Congressional Budget Office projected Wednesday that the deficit for 2012 will run $1.1 trillion, the fourth year in a row the shortfall will exceed $1 trillion.

Four years of trillion dollars a year deficits somehow failed to stimulate economic growth. Go figure. Meanwhile we are nearing another milestone in our national economic history. Again from Fox:

The debt is now lurking just under the $16 trillion mark -- a number huge enough to be almost incomprehensible to the layperson. One way to visualize its magnitude: If you were to spend a dollar every second, it would take you 32,000 years to spend $1 trillion, or a mere one-16th of the debt.

It's silly to ask what the President's plan if he gets another four years. This is his plan. Take any of his budgets and adjust for reality and what you get is, well, reality. The President is worried about the possible effect of Greece leaving the Euro, if it happens before the first Tuesday in November.

Comments

[Donald Pay]

Better be careful about comparing data like this, because it makes the opposite case you want to make.

The Employment-Population ratio increased during the Reagan Administration increased because not only did the employment rate fall, it fell in the economic sectors that provided good wages and benefits. The loss of those middle class supporting jobs, especially among married males, meant married women with children had to go into the labor force in order to maintain a middle class lifestyle. You also had the baby boom generation at its height going into the labor force, thus swelling the percent of the population in the labor force. You also had a Democratic Congress that worked with the Reagan Administration to make sure the economy recovered. That included, by the way, deficit spending. Also, wringing out inflation and the subsequent lowering of the interest rate caused business and housing expansion.

What you have with the Obama Administration are quite different economic and political realities. First, the Bush Depression was a lot more severe than the Reagan Recession, and it hit housing construction harder. Second, the baby boomer retirement began, particularly in construction, teaching and other public services, and many older workers want to get out while benefits are still guaranteed. Third, there has been no help from the Republican Party (really it's been treachery) on economic policies that would lift the economy.

Another KB fail on economic policy.

[larry kurtz]

It's as if KB is drowning in debt and the only way out is to blame somebody else for his own failure to thrive: how conservative.

[Dave]

FYI, the TOTAL NATIONAL DEBT increased 188% with an annual rate of increase around 14% during the Reagan years... BushI increased the DEBT by another 55%. And BushII effectively doubled the total national debt during his 8 years... The TOTAL DEBT AS A % OF GDP was on a downward trend at 33% when Reagan was elected and by the time Obama took office it was 86%. I suspect that if Obama had the ability to spend like Reagan, we'd be in a better place. But the economic reality of the Reaganomic legacy leaves US with a rather inadequate lifeboat to rescue such a titanic economy.

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