The Real Obama Legacy, Part 2: The Economy

See also: Part 1: Foreign Policy

Shortly after his inauguration in 2009, President Obama invited Republican leaders in Congress to the White House to discuss their proposals for stimulating the economy. In this gesture of goodwill he failed to mention that House Democrats had already drafted and passed a stimulus bill without consulting them. Every GOP idea had been left out.

Even a minor concession or two would have gone a long way toward gaining Republican votes, with the result that Republicans would have inherited part ownership of the stimulus package. But as no concessions were offered, every House Republican voted against the bill, as did all but three in the Senate.

Then came Obamacare which was put together in the office of then-majority leader Harry Reid. No Republicans were invited to that party either and consequently none voted for it. Democrats became sole proprietors of Obamacare.

Politically speaking, this approach was justified. But there happens to be great value in compromise and bipartisanship. On big matters that involve the entire country and affect most Americans, they are critical. They act like a seal of national approval. When both parties agree, controversial measures are no longer in serious dispute. When one party insists on having its way, controversy lingers.

Obamacare is a prime example. As a product of bipartisan compromise, it would have been less unpopular than it is now. But as wholly owned property of the president and Democrats, forced on an unwilling public, it’s loathed. For Democratic candidates, it’s an albatross. In short order, Obama lost the House majority he brought with him into office, then the Senate.

Obama’s relations with Republicans have worsened since then. In 2011, he and House speaker John Boehner agreed to a $4 trillion deal of spending cuts and tax hikes. But this “grand bargain” unraveled when Obama insisted on hundreds of billions more in tax revenue. Boehner promptly pulled out, saying he couldn’t trust Obama to honor a deal. Obama had throws away a breakthrough that might have enhanced his economic legacy.

Thus ended Obama’s minimalist efforts to cooperate with Republicans in Congress. After his re-election in 2012 he announced he would use his pen and the phone to handle Congress. Rather than negotiate with Republicans, he mainly used his pen to sign an unprecedented number of executive orders. No need to discuss, cooperate, or compromise on those. Throughout his second term he routinely exceeded his constitutional authority by signing orders rather than passing legislation.

Now, in his final month in office Obama seeks to secure his legacy by introducing a last-minute barrage of costly environmental regulations. This adds to his administration’s dubious record of producing more than 600 major regulations, at a cost of more than $100 million each, according to a study by the American Action Forum, a Washington-based think tank.

Related to this legacy of stifling over-regulation is the fact that the U.S. is now 19.95 trillion dollars in debt (as of December 2016). Obama added an additional $7.917 trillion to America’s national debt, which amounts to a 68 percent increase from the $11.657 trillion debt level Bush accrued by the end of his presidency.

But according to Obama himself, echoed by the MSM, he has done a really great job overall and America is “indisputably better off” economically today than it was when he took office.

At first glance one would think that more than any other aspect of Obama’s legacy, the economy is a matter of fact rather than ideological spin.  But consider this Nov 30, 2016 statement by White House Press Secretary Josh Earnest. In his press briefing he said that 805,000 manufacturing jobs have been created since President Barack Obama has been in office. But a quick fact check by a liberal leaning watchdog indicates that there has been a net loss of 303,000 manufacturing jobs since Obama took office in January 2009.

Earnest made the statement on the day that Carrier announced a deal with President-elect Donald Trump so that the company would “continue to manufacture gas furnaces in Indianapolis, in addition to retaining engineering and headquarters staff, preserving more than 1,000 jobs.”

Earnest’s intention to undermine Trump’s achievement was clear when he fabricated this lie to the American people and then taunted Trump by adding that “Trump would have to make another 804 deals like that to equal the number of manufacturing jobs created while Obama has been president.”

So given this state of affairs, let’s fact check Obama’s “indisputably better off” claim against eight key metrics of economic health: the federal debt, the gross domestic product annual growth rate, the unemployment rate, labor participation rates, median annual income, home ownership rates, health care costs, and reliance upon food stamps (see America’s economy before Obama versus after Obama,” Breitbart, 11/29/2016).

1. As already mentioned, the federal debt has doubled to nearly $20,000,000,000. And counting…
2. Obama has overseen the worst economic growth of any President since Herbert Hoover, and has not had a single year that saw an annual growth of GDP (Gross Domestic Product) that reached or exceeded 3%. CNS News reported that all of Obama’s predecessors since JFK, whose administration saw annual growth of real GDP peak “at 6.1 percent in 1962,” have seen far more robust economic growth. Obama’s eight years pale in comparison to Ronald Reagan’s eight years between 1981 and 1989, where “annual growth in real GDP peaked at 7.3 percent in 1984.”

3. The good news was that the unemployment rate declined from 7.6% in January 2009 to 4.9% in October 2016, and the number of employed increased by 9.8 million and the number of unemployed decreased by 3.8 million. However, the bad news was that the number of Americans not in the labor force increased by 13.5 million.
4. This latter statistic reflects that fact that the labor participation rate declined from 65.8% in February 2009, shortly after Obama took office in the midst of a recession, to 62.8% in October 2016 (Bureau of Labor Statistics). Thus 94,333,000 Americans were not in the labor force in July 2016. In September 2015, the labor force participation rate dropped to 62.4 percent, its lowest point since 1977.
5. Median household annual income has remained stagnant in real terms under Obama — 1.5% lower ($884) than it was in January 2008 just as the recession was beginning, but substantially above its low point of August 2011.
6. The home ownership rate declined from 67.3 percent in the first quarter of 2009 to 63.5 percent in the third quarter of 2016.
7. Health insurance rates, both for employer-sponsored programs and Obamacare, increased significantly between January 2009 and November 2016. Breitbart:

“In 2008, the average employer-sponsored family plan cost a total of $12,680, with employees footing $3,354 of the bill…. By 2016, the cost of the average employer family plan was up to $18,142 for the year, with workers picking up $5,277 of the tab.”

And it’s getting worse. Obamacare premiums are set to skyrocket an average of 22% for the benchmark silver plan in 2017.

8. The number of individuals receiving food stamps increased from 33.5 million in January 2009 to 44.2 million in August 2016, an increase of 10.7 million. Enrollment in the food stamp program has soared by 32 percent in the years since President Obama first took office, a new report finds.

Summary

Six of these eight metrics show that Americans are demonstrably worse off in November 2016 than they were in January 2009, when President Obama was inaugurated. The two metrics which show nominal improvement—the unemployment rate and median annual income—come with significant caveats.

While the measured unemployment rate has declined under Obama, the dramatic increase in the number of those not participating in the labor force, the huge increase in those on food stamps, and stagnant median household annual income in real terms, suggest that those two economic metrics represent illusory gains.

On the face of it, Obama’s economic plan is to expand the dependent population by exporting manufacturing jobs, swelling the numbers on welfare, disability, and those out of the labor force, continue to import millions of uneducated, economically dependent foreigners, but to make everyone at least minimally happy with payments from the government so they continue to vote for the Democrats who are indisputably more favorable to the welfare state than the GOP.

With six of these eight economic metrics lower in 2016 than they were in January 2009, and with the two improved metrics qualified at best, it is hard to conclude that America is “indisputably better off” economically today—compared to January 2009.

In his last press conference as President Obama made his case once again that as president, he was great for the economy:

“As I was preparing to take office, the unemployment rate was on its way to 10 percent,” he noted. “Today it is at 4.6 percent, the lowest in nearly a decade.”

In contrast here is how Trump depicts the last 8 years:

President Obama has weakened our military by weakening our economy. He’s crippled us with wasteful spending, massive debt, low growth, a huge trade deficit and open borders. Our manufacturing trade deficit with the world is now approaching $1 trillion a year. We’re rebuilding other countries while weakening our own. Ending the theft of American jobs will give us resources we need to rebuild our military, which has to happen and regain our financial independence and strength.

Because Trump was elected on his promise to restore American jobs, I have chosen to focus the remainder of this brief essay on job loss due to outsourcing jobs to places like China and Mexico.

Outsourcing the American Dream

Jobs outsourced to China have continuously reduced American employment opportunities and have helped contribute to wage erosion since 2001, when China entered the World Trade Organization. Between 2001 and 2013, the US trade deficit with China increased by $240.1 billion ($21.8 billion on average per year). During this period the trade deficit with China cost the U.S. 3.2 million jobs, three quarters of which were in manufacturing, according to the Economic Policy Institute report.

By 2015 the U.S. trade deficit with China jumped to $365.7 billion. This is a new record, up from the 2014 record of $343 billion. The deficit is always increasing because, for more than a decade, China has exported about $4 worth of goods to the United States for each $1 of goods that it imports. A lot of the Chinese exports, such as consumer electronics, clothing, and machinery, are from U.S.-based companies that send raw materials to China for low-cost assembly. Because most American companies can’t compete with China’s low costs, millions of U.S. jobs have been lost due to outsourcing, facilitated by

Because China consistently distorts market forces through government subsidies, preferential loans, and currency manipulation, they can produce goods at lower cost than US companies. They pay lower wages to workers, and manipulate an exchange rate in which the yuan is always priced lower than the dollar. If the dollar loses value, China buys dollars through U.S. Treasuries to support it. In this way, the yuan’s value is always within a target range of 2 percent.

The passive resignation of the Obama administration to this growing problem is precisely the kind of response that infuriates the newly unemployed class of American workers who gave Trump the 2016 election. Thanks to the Obama administration’s globalist ideology, China is now the world’s largest economy and the largest lender to the U.S. Government. As of September 2016, the U.S. debt to China was $1.157 trillion. Many are concerned that this gives China political leverage over U.S. fiscal policy since it could call in its loan. (Source: “Major Foreign Holdings of Treasury Securities, U.S. Treasury.)

In their Outsourcing America: What’s Behind Our National Crisis and How We Can Reclaim American Jobs, Ron and Anil Hira note that despite the enormity of the stakes for all Americans, a state of denial exists among US policymakers.

To convince Americans of outsourcing’s benefits, corporate outsourcers sponsor misleading one-sided “studies.” Only a small handful of people have looked objectively at the issue. These few and the large number of Americans whose careers have been destroyed by outsourcing have a different view of outsourcing’s impact. But so far there has been no debate, just a shouting down of skeptics as “protectionists.

The Hira brothers also cite a University of California study that concludes that 14 million white-collar jobs are vulnerable to being outsourced offshore. The authors note that these are the jobs of the American Dream, the jobs of upward mobility that generate the bulk of the tax revenues that fund our education, health, infrastructure, and social security systems.

The authors point out that “the track record for the re-employment of displaced US workers is abysmal: “The Department of Labor reports that more than one in three workers who are displaced remains unemployed, and many of those who are lucky enough to find jobs take major pay cuts.”

The result is a lose-lose situation for American employees, American businesses, the American government and for the American people as a whole.

The national security implications of outsourcing can no longer be ignored.  The steel and aluminum industries are essential to our national defense industrial base.  If U.S. steel production is hollowed out by unfair Chinese competition, the U.S. could be placed in the vulnerable position of having to rely on foreign countries for critical commodities. Obama’s legacy of passivity regarding these issues has inevitably eroded America’s superpower status, hence the appeal of Trump’s main message: “Make America Great Again”.

Trump has already begun the task of reshaping trade relations with China by naming outspoken China critic, Peter Navarro, to lead a new White House office overseeing American trade and industrial policy. Navarro, who is a professor at the University of California, Irvine, and holds a doctorate from Harvard, is the author of a series of books critical of China’s unfair trade practices and a 2012 documentary film, Death by China.

Eight years ago when he was running for president, Obama criticized President Bush’s deficit spending, calling it “irresponsible” and “unpatriotic.” Obama said at a presidential campaign event on July 3, 2008:

The problem is, is that the way Bush has done it over the last eight years is to take out a credit card from the Bank of China in the name of our children, driving up our national debt from $5 trillion for the first 42 presidents — 43 added $4 trillion by his lonesome. So we now have over $9 trillion of debt that we are going to have to pay back — $30,000 for every man, woman and child. That’s irresponsible. It’s unpatriotic.

By December 2016 Obama has added far, far more to the U.S. debt than Bush or any president in history. As he leaves office he continues to add to his total of over 260 executive orders, while at the same time he advised Trump not to issue too many executive orders.

The left, believing that they would control the presidency for years to come because of the demographic changes they have engineered (with the complicity of the GOP), doubtless felt that executive rule was a good thing — no need to deal with all those flyover Republican Congress people. It’s a great precedent for Trump.

Obama’s legacy of hypocrisy and arrogance (and that of his press secretary) is a testament to his disdain for the intelligence of the American people. Fortunately not all Americans have succumbed to the ideological propaganda honed by the Obama administration and their fervent supporters in the MSM over the past 8 years. We will soon have a new American President, but we remain stuck with a MSM that is bristling with anger over repeated exposures their bias, not to mention their frustration that their much hoped for utopian dream of complete domination was at hand with the ascension of Hillary Clinton has been shattered.