Tuesday, October 14, 2014

Five reasons why America’s (Obama) economy continues to struggle

Five reasons why America’s (Obama) economy continues to struggle:

  • Nearly six years after he left office, the economy’s poor performance is no longer ‘George Bush’s fault;’ President Obama now officially owns the U.S. economy
  • There are five primary reasons why working Middle Class and poor Americans continue to struggle though large corporations are doing well, thanks to crony capitalism
  • The federal government is responsible for all five reasons
By Charles Greene

We’ve reported before on the deceptive figures regarding employment rates in post-Great Recession America. The fact that so many have dropped out of the labor market entirely is one of the factors that help create the illusion that unemployment rates are dropping.

Although the official unemployment rate is now at 6.1 percent, many estimate the actual figure to be much higher.

An eye-opening article by Peter Morici, published in Real Clear Politics, examines the issue and the reasons why the real unemployment rate is so high. Morici estimates the true figure to be around 20 percent and he cites five reasons why:

  1. Poorly Enforced Trade Agreements
  2. Misguided Energy Policies
  3. Burdensome Government Regulations and Taxes
  4. Corruption and Monopolies
  5. Disincentives to Work, Poorly Run Universities and Immigration

Regarding trade agreements, Morici points out that despite high spending levels on the part of consumers and businesses, too much of the money is going to China and elsewhere:

“China has systematically undervalued their currencies to put cheap goods into U.S. markets, destroying millions of good-paying American manufacturing jobs. Presidents Bush and Obama have refused to enforce WTO rules that prohibit currency manipulation to gain competitive advantage.”

The current leadership in Washington has opted for the ‘NIMBY’ (Not in My BackYard) approach in determining energy policy. In other words, we have decided to buy much of our petroleum from other countries, which does nothing to reduce pollution and environmental damage elsewhere, but hurts employment rates at home:

“Washington has chosen to outsource—not reduce—environmental risks associated with petroleum development by prohibiting or curtailing production off the Atlantic, Pacific and Gulf coasts and in Alaska.

Safely developing those resources, along with prudent conservation, would slash oil imports to zero and create millions of jobs.”

As we’ve noted previously, costs of environmental regulation compliance are spiraling while American jobs are being destroyed. High corporate taxes are also hurting American businesses and causing the loss of jobs:

“The U.S. corporate tax is among the highest in the world. Along with arbitrary taxes on overseas profits, high rates motivate U.S. businesses to relocate abroad and discourage foreign investment in the United States.”

Washington has moved away from deregulation policy, allowing big corporations and bankers to create monopolies that put the squeeze on consumers. The companies profit, along with those in Washington who do their bidding:

“…in exchange for big campaign contributions and lucrative jobs after public officials leave office.

This corruption breeds inefficiency, limits production and innovation, and kills jobs.”

Other factors leading to American unemployment, according to Morici, are the disincentives to work being created by expansion of benefits, poor education standards in colleges and universities, and high levels of immigration:

“Thanks to the combination of work disincentives and poor career training, nearly all the jobs created in this century have gone to immigrants. At the low end, they take jobs government benefits programs encourage lower-skilled Americans to refuse, and at the high end, immigrants take jobs many college graduates are unqualified to fill.”

Morici concludes that if all these problems were addressed, the economy would recover and employment rates would return to pre-recession levels. If we tackled the trade deficit, he says, we could “easily boost growth to 5 percent a year” and create plenty of new jobs, not only for the unemployed citizens currently living in the U.S., but for immigrants as well.

It almost seems sometimes as if Washington is shooting the nation in the foot on purpose. Don’t our leaders see what almost every economist agrees are the problems with the economy, not to mention the average person? Are the lobbyists and campaign contributors really that powerful?

These are the questions Americans need to be asking themselves in the run up to the 2016 presidential elections. Let’s make it clear to our so-called leaders that business as usual in the capital is not good enough…

And this message needs to be heard on both sides of the aisle. If Republicans expect to win the next presidential election, they had darn well better come up with a candidate who truly walks the walk and who represents real conservative values. The right person could also garner the support of the huge number of people who traditionally vote Democrat and have become increasingly frustrated with their own party’s policies.

Do YOU agree that now – finally – Obama, and not George W. Bush, ‘owns’ the economy? Or do you think Bush screwed it up so badly that there was no way ANYONE could fix it? What are YOUR ideas for getting the economy moving again for more Americans? TELL us!

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