President Barack Obama’s top economic adviser, Austan Goolsbee, Chairman of the President’s Council of Economic Advisers, making the rounds on the Sunday morning talk shows, chose the path of minimizing the concern about cascading US economic news that precipitated another sell off in the financial markets last week. Mr. Goolsbee said “the public should not read too much into a weak Labor Department jobs report released Friday”, which showed the U.S. added only 54,000 jobs in May, 100,000 short of projections,while the unemployment rate rose to 9.1%. “Every economist knows that the monthly numbers are highly variable, so you want to look at a little bit more than just one month before concluding on a trend,” said Mr. Goolsbee on ABC’s “This Week.”
Well, every economists clearly doesn’t share Mr. Goolsbee’s diagnosis as one simply needs to search what reputable, independent organizations like Capital Economics are saying about first quarter US reports. “The economy clearly just hit a brick wall,” Paul Ashworth, chief U.S. economist at Capital Economics, tells The Business News Network “It’s almost as if it came to a complete standstill.” The conscientious constituent should direct its information gathering toward non-partisan experts who don’t occupy a strategic agenda.
The economy isn’t experiencing one bad month, as Mr. Goolsbee asserted. GDP grew at a less than forecasted 1.8% for the 1st QTR, housing prices are back to 2002 levels which means a decade of housing equity has been wiped out and we still have 6.8 million fewer jobs than when the recession started in 2007.
The US economy isn’t experiencing one bad month, as Mr. Goolsbee asserted. Gross Domestic Product (GDP) grew at a less than forecasted 1.8% for the 1st QTR, housing prices are back to 2002 levels which means a decade of housing equity has been wiped out and we still have 6.8 million fewer jobs than when the recession started in 2007. Where else should I look Mr. Goolsbee, what am I missing? And the elephant in the room is the White House doesn’t have any arrows left in its quiver to give the economy another boost. The Country has no appetite for another big stimulus program nor do we have the “credit line” to afford it as our “Government Credit Card” is maxed! And, the Federal Reserve is not interested in pumping trillions of more dollars more into the economy and can’t lower interest rates any further since it is at prime now. But, again, what do I know, I am just a small business owner who has to balance a ledger, read a P&L statement and take in more than I spend.
I contend that the current US economic conditions, high unemployment and slow growth, are not a “bug” in the economy but a feature of the new fundamentally changed economy brought to you by the Obama Administration. I don’t believe this is a economic virus that the US is condemned to for decades because of deep structural problems, but the fruits of this Administration’s policies. Talk to anyone in the business community and they will tell you uncertainty is killing us, and a lot of that uncertainty has been created by President Obama’s regulations from PPACA (Obamacare) to EPA, and fear of soaring interest rates from record debt and a weakening dollar with looming tax hikes.
This train can indeed be turned around. There are real policy alternatives available to reduce the deficit and spur job creation, like opening up the energy sector, but that is something this administration ideologically refuses to do. So, President Obama simply took over a bad situation and made it worse and instead of directing his leadership team to be candid with the American people, the political gamesmanship endures.