ObamaNomics Vs The Little Guy & His Family

President Obama’s reelection campaign was based almost entirely on allegations that Mitt Romney was morally disqualified for office because he was “for the rich” while Obama was “for the little guy and his family.”  But since the first day of the Obama Administration it has been “the little guy” who needs employment, and his family, who has suffered most.  [Continued below the chart]The Commerce Department released it’s quarterly report card on the economy just before he election.  Third quarter GDP grew an anemic 2%. This was a slight improvement over the previous quarter but still hopelessly insufficient to provide enough economic opportunity for all “the little guys” Obama claims to be so concerned about. The chart above compares every post-recession economic recovery since the government began compiling quarterly GDP reports in 1947.  The current economy ranks last, tenth out of ten. As a result the Labor Participation Rate, the percentage of “little guys” who are either employed or actively seeking a job has declined for the first time since World War II, as tens of millions of workers have given up looking for a job.

When challenged by these data the President and his allies in Congress respond that the recovery would be stronger if only the Republicans would wave through another “stimulus” like the one the Democrats enacted in 2009 on the promise that it would, in the President’s words “immediately jumpstart job creation and long term growth.” 

Most of the Left’s so-called “economists” now claim to have known all along that the $830 billion stimulus of 2009 was way too small, that much more deficit spending would have restored prosperity and full employment.  The problem they say is that the breath taking increase in the national debt over the last four years, from $10 to $16 trillion hasn’t been nearly enough.

So how do they know that even more spending would have bought more, not less prosperity?  Is there any historical experience to validate their theory?  The next chart shows how much federal spending increased in each of the nine previous recessions, all of which led to broader, more rapid recoveries. [continued below the chart]

Based on this experience there is no reason to believe even more spending would have improved results.

President Obama continuously reminds us that he began his term with an inherited recession, which came to an end.  Job losses eventually stopped and job growth began, albeit very slowly.

But there is no historic example of a recession that did not end, no matter who was President, no matter which party was in power, no matter what policies the government pursued.  All recessions, defined as periods of shrinking GDP, come to an end periods of job loss have always resolved to new periods of job creation.

The President’s aggressive, big government interventions into the private sector economy should be judged a success only if they produced a more robust recovery than America experienced after previous recessions, especially those that reduced government’s footprint, as the Reagan Administration did in the eighties.

But, as the first chart shows, after 13 quarters the current recovery ranks dead last.  In fact, the recovery is so weak, millions of Americans believe the economy is still in recession.

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