The following is a guest post by Dr. Robert Owens.
Obama Boom Builds Obamatowns
According to the megaphones of the Progressive-controlled media the Obama economy is booming. For the investor class it has been a rising tide that lifts all yachts or as it is expressed in Bloomberg, “When President Barack Obama was elected in November 2008, the U.S. economy was shrinking at a rate unmatched since World War II. In the seven years between then and his final State of the Union address Tuesday night, global investors have enjoyed stellar results from the rapidly expanding Obama economy.”
According to Paul Krugman in The Obama Boom “The … Obama economy offers a powerful lesson… From a conservative point of view, Mr. Obama did everything wrong, afflicting the comfortable (slightly) and comforting the afflicted (a lot), and nothing bad happened. We can, it turns out, make our society better after all.”
And according to President Obama himself everything is coming up roses, “Companies are investing; consumers are spending and American manufacturing, energy, technology, autos all are booming. And thanks to the decisions that we’ve made and the resilience of the American people, we’ve recovered faster and come farther from the recession than almost any other advanced country on earth. So the good news is the economy clearly is getting stronger, things are getting better, engines are revving a little bit louder.”
A chicken in every pot, a car in every garage, a flat screen in every living room, a cell phone in every hand, and a check in every mail box. Ah yes, haven’t we heard all this for years while anyone who works knows that wages have been stagnant for years. Anyone who does their own shopping knows food prices have gone through the roof. And anyone who has lost their job through the destruction of America’s manufacturing knows that a part time job at the Kwiki Mart doesn’t replace a full time job with benefits.
The political class, their pet economists, and the fellow-travelers among the media may trumpet that the Obama economy is booming. They may tell us we must all troop like mind numb robots to the polls and make sure Hillary has the opportunity to give us a third term to complete the transformation. They also tell us if the Donald is elected all this magic and wonder will be lost.
However other voices tell us a different story.
According to Bank of America Merrill Lynch Head of Global Rates and Currencies Research David Woo, “The U.S. economy would take off in a big way if Trump were elected and Republicans control both legislative houses next year. Against this backdrop, the greenback would strengthen and U.S. Treasury yields would rise.” This is a view shared by Woo and other fixed income veterans as well.
Looking at the booming Obama economy is like viewing a fever dream through the looking glass. The Technocrat apparatchiks who populate the Obama regime tell us this is the best economy in American History, unprecedented job growth, low unemployment, and no inflation. Those who actually have created jobs, know how the economy works in the real world, and have to cut pay checks every week tell us something different.
Leonard Riggio the Barnes & Noble Inc. Chairman and founder said the bookstore chain is suffering from one of worst retail environments in decades after traffic in stores hit “close to a historic low point.” The retail climate is “terrible,” he said on the company’s first-quarter earnings call Thursday. “Better put, is it is one of the worst I have ever experienced in the 50 years I have been in this industry.”
The Fed continues to pump money into the system and keep interest rates at historic lows. This stimulus is necessary just to maintain the anemic recovery that has never regained what was lost in the Great Recession. The U.S. Federal Reserve must be careful not to remove its monetary stimulus too quickly because of potential weakness in the labor market and risks of foreign economic downturns, Fed Governor Lael Brainard said on Monday.
“Today’s New Normal counsels prudence in the removal of policy accommodation,” Brainard said in prepared remarks to the Chicago Council on Global Affairs. She said the labor market might be farther from full strength than some economists believe, which means “the case to tighten policy preemptively is less compelling.” In other words even the shabby New Normal of the Obama economy is only sustainable if money keeps appearing out of thin air and banks can get infusions of this funny money at 0%. That should be the textbook definition of a political charade.
The problem with our economy is not that the American people don’t want to work. It isn’t that we are lazy as our president recently told his friends in communist Laos. It is that the cards dealt by the Central Bank are stacked. The central planners throughout the Obama Regime are ideologues who cannot see reality if it conflicts with their plan to transform America into a democratic people’s republic by the elites of the elites and for the elites.
According to Stephen Stanley, chief economist at Amherst Pierpont Securities, “The Federal Reserve has been too glued to theories that haven’t worked to restore robust economic growth since the last recession.”
“The central bank’s adherence to the idea that unemployment and weak demand can be cured with policies that encourage consumers, businesses and governments to rack up more debt ignores other problems with the economy,” he says.
“For the bulk of this expansion, the Fed has operated as if everything that was wrong with the economy was a cyclical shortfall in demand. The trouble is that it has become increasingly evident that this narrative was wrong.” Stanley continued.
Following a collapse in a massive U.S. housing bubble in 2007 the Fed responded to the resulting 2008 financial crisis, by cutting interest rates to a record low of about zero percent in an attempt to blunt the worst recession in 80 years. The Fed also tried several rounds of quantitative easing, a policy of buying government debt and mortgage securities from banks to help drive down borrowing costs, in other words pumping money into the system.
While the U.S. bounced back from recession and the unemployment rate fell from a 30-year high of 10 percent, since that time growth in the American economy has never exceeded 3 percent a year for the first time since World War II. In addition, the unemployment rate doesn’t include the over 90 million able bodied Americans who have decided to quit working and ride the government hammock into the sunset.
Stanley says Fed policymakers are too attached to the ideas of John Maynard Keynes, the hugely influential English economist who argued that deficit spending was necessary during recessions to maintain full employment. Keynesian theories make it difficult to distinguish short-term cyclical trends from long-term structural changes in the economy, Stanley says.
According to Stanley, pointing to a continuous fall in U.S. productivity, “Keynesians operate exclusively on the demand side of the economy, and much of what is holding the economy back in recent years has been operating on the supply side. There is also a strong leftward lean in ideology at the Federal Reserve, and it is thus very understandable that they have been very slow to recognize the damage done to growth over the past several years by hikes in marginal tax rates and a stifling regulatory environment.”
“The Fed’s fixation on core consumer price inflation also limits its ability to recognize major asset bubbles, such as in tech stocks and home prices,” Stanley says. The Core inflation rate is only a portion of the true inflation number yet that is all the Progressive media ever report on. The real inflation rate is much higher. For one thing the core rate does not include food or energy, two things everyone needs and two things whose prices have soared under Obama.
So how is this working out in the real world? Look at your bank balance, your life style, or your hopes for the future of your children. Or look at the rising tide of homelessness. This is a phenomenon that is hardly ever mentioned when a Democrat is in the White House. Today the march of poverty is too great for even the Progressive shills to ignore as Obamatowns begin to dot the landscape of a once prosperous nation.
According to Tyler Durden as posted on the website Zero Hedge, “Just like during the last economic crisis, homeless encampments are popping up all over the nation as poverty grows at a very alarming rate. According to the Department of Housing and Urban Development, more than half a million people are homeless in America right now, but that figure is increasing by the day. And it isn’t just adults that we are talking about. It has been reported that that the number of homeless children in this country has risen by 60 percent since the last recession, and Poverty USA says that a total of 1.6 million children slept either in a homeless shelter or in some other form of emergency housing at some point last year. Yes, the stock market may have been experiencing a temporary boom for the last couple of years, but for those on the low end of the economic scale things have just continued to deteriorate.”
Happy days are here again the progressive puppet masters and their media chorus sings as everyone else sinks into the third world. If the voters are so unenlightened that they don’t want to vote for a total transformation of their homeland import another population who will. If the economy is falling through the floor and prosperity is becoming poverty for the unwashed masses in fly-over country just redefine success and call it the New Normal. Then they live the high life in their gated communities as the rest of us struggle to survive. No wonder five of the ten richest counties in America surround the imperial capital as our servants grow fat and rich on the loot they expropriate from the rest of us.
Dr. Owens teaches History, Political Science, and Religion. He is the Historian of the Future @ http://drrobertowens.com © 2016 Contact Dr. Owens [email protected] Follow Dr. Robert Owens on Facebook or Twitter @ Drrobertowens / Edited by Dr. Rosalie Owens