The Time I Disagreed with

Steve Moore: My grade for Obama on his economic legacy? A gentleman’s C

Full on disclosure here. Mr. Moore is an actual real live economist, and has a firm working knowledge of this particular subject, while I am not an economist by any stretch, just a ‘regular guy’ that reads a lot. And after reading this opinion piece by Mr. Moore, I have a few areas of disagreement with him. Case in point is his opening sentence.

And so the era of Obamanomics mercifully comes to an end.

In actual point of fact, the effects of one President’s policies on the economy do not, contrary to popular opinion, end when they leave office and the next President is sworn in. Case in point is the recession at the end of George W. Bush’s term, and the beginning of the current occupant of the WH’s term. It was, has been, and continues to be referred to as Bush’s recession, and as noted in the article, it has been a long, drawn out process to pull the economy out of it, and I don’t think we’re done yet.

Now that Trump is the President Elect, does that mean that his policies are going to have an immediate effect, whether positive or negative, on the economy the moment he is sworn in? That would be great if they did, in a positive way, but we are not likely to see ‘immediate’ change, but more a gradual upward tick, if what everything I’ve been reading of late is true. I think it may take as long as six months to a year for our economy to really get going as predicted by others. I’m quite possibly wrong on that as I’m not an economist as I stated at the beginning of this, and quite frankly, I hope I am wrong. I hope the economy catches fire, and expands and expands, fueling not just job growth, but wage growth as well. Speaking of job growth …

It goes out with a whimper, not a bang as the final jobs report for Obama found 156,000 new jobs in December. That’s a mildly disappointing number and is consistent with a seven and a half year pattern of a 2 percent growth rut.

A mildly disappointing number? Are you kidding me? That’s for the entire country! With their respective populations and diverse industries, California and/or Texas should have been able to generate those numbers on their own, and in a normal world, they would have. Except for one thing. Well, actually many things. All of those job killing regulations from the EPA, OSHA, the IRS, the mandates of the ACA and the crippling costs associated with that abomination of a law (more like armed robbery perpetrated by the federal government), etc. which have kept business owners from expanding as they would like to do.

Oh, and those mildly disappointing numbers are consistent with a seven and a half year pattern of a 2 percent growth rut aren’t merely ‘mildly disappointing’, they’re a disaster waiting to happen down the road if we don’t get out of this rut. Because we’ve been in this rut, we’ve had to borrow more and more money from the Chinese to cover the ever rising costs of the federal government. It cannot continue. It’s not sustainable, and anyone who refuses to acknowledge that is a fool.

Obama is touting more than 11 million jobs created on his tenure, ‎but that is still at least four million short of the Reagan pace. This recovery has been a mile wide and an inch deep with growth rates in the economy that consistently fell behind the norm of recovery and for most Americans it felt like we were treading water financially.

I agree with what Mr. Moore says here about the economy being a mile wide and an inch deep, but he really doesn’t go into the why of it. Why is it a mile wide and an inch deep? It’s because the current occupant of the WH likes to play fast and loose with numbers. Case in point is his touting the 11 million new jobs figure. If I were him, I wouldn’t be so quick to brag on that 11 million job number. If you break that number down, using 8 years as your base line, you get 11 million jobs divided by 8 years = 1, 375,000 jobs added per year. That works out to a monthly average of a little more than 114,583 per month. Obviously, not every month during an 8 year time frame is going to be the same. There will be months of potentially double those numbers, while other months, the numbers wouldn’t be that good. But, any way you look at it, that’s rather anemic, if you ask me.

Even the 11 million jobs claim by the Obama team is more than a little misleading. About half the jobs under Obama fell into the categories of temporary employment and part time hiring, ‎those aren’t the kinds of positions you can raise a family on. Also, because the labor report survey counts a part time job as no different than a full time job, in many cases it took two Obama-era jobs to equal one full time job with benefits.

Here, I agree with what Mr. Moore has to say, but with some clarification. He says that it sometimes took two jobs to equal one job with benefits. Those would be two part time jobs, which usually do not come with benefits, so to say that two part time jobs – without benefits – equate to one full time job – with benefits (if you can get ’em) – is in error, as they are not the same.

From here, I agree with Mr. Moore, as he goes on to tell how the current occupant of the WH has, as mentioned above, ‘cooked the books’ on the unemployment numbers. The lower the job participation number, the lower went the unemployment number because those who had given up looking for a job were no longer counted as being unemployed once their unemployment benefits ran out.

Mr. Moore also informs us that wages ‘grew’ 2.9% in 2016, most of which was seen by the in the upper economic classes (and here I thought Democrats were for the ‘little guy’) while the middle and lower class wages flat lined, leading to voters opting for a change at the top.

Here’s the last paragraph that I’m going to include, and this is where Mr. Moore and I take vastly different roads, as you’ll see below.

I will close the books on Obamanomics giving this President a grade of gentlemen’s C. The economy did pull itself out of a deep recession and the recovery has been lengthy with 75 months of job gains. The stock market rose swiftly in Obama’s first term in the wake of the collapse.

There is only one sentence in that paragraph that I agree with Mr. Moore on, and that is the last one about the stock market, but with a minor difference. The stock market pretty much stood pat at first, while investors waited to see what the new President was going to do way back then, and after a somewhat shaky start, stocks again started to rise. But it wasn’t a swift rise to begin with. That has only been a recent development of the last couple of years.

I also disagree that the economy has finished pulling itself out of the long recession, irrespective of the ‘job gains’, insomuch as I showed above, that the job growth has been anemic at best, and with job growth, so goes economic growth.

What I really disagree with, however, is the final grade of a ‘gentlemen’s C’. Seriously? A ‘C’? He warrants no more than a D- at best, if not an out and out ‘F’ for failing to get the economy going again as well as his predecessors had been able to do in the past, not to mention the fact that to make themselves look better, this administration has used about every trick in the book to ‘cook’ the books, hiding numbers here, and inflating numbers there. Those type of shenanigans do not warrant a ‘C’ in my book.

When will we be free and clear of the current occupant of the WH’s ‘economy’? My magic crystal ball isn’t saying, but if my semi-educated guess about the effects Mr. Trump’s policies will have on the economy, I’m pretty sure we’ll all know from the sound of the BOOM.

At least that’s my hope.