Obama Gets It Half Right
by Charles Goyette
Expecting insight about the economy from Barack Obama is
like hoping to learn about Paul Revere from Sarah Palin.
However, inadvertently, the President seems to have gotten something
right.
President Obama stumbled into the truth at an appearance with German
Chancellor Angela Merkel when he said that he is not worried about a
second recession.
Although the evidence is both mounting and credible that the economy is
sinking deeper, it is foolish to think the downturn will mean a second
recession. That’s because the first recession, the one that officially
started in December 2007, never really ended.
The pronouncements by the National Bureau of Economic Research are
regarded as definitive statements about when economic downturns begin and
end. By their calculation, the worst downturn since the Great Depression
ended in June 2009 after eighteen months, and the recovery got
underway.
Never mind that it took them more than a year after the fact to reach
that conclusion.
Look, if the economy hasn’t recovered, then a recovery couldn’t have
begun. It’s like saying an airplane took off, even though it never left
the ground.
Something was going on that created the illusion of a recovery, but now,
two years after it was supposed to have started, there is no recovery in
sight.
The price of oil had been on a tear back when the recession began; it’s
even higher today. The price of gold has almost doubled.
After three and a half years, GDP is virtually unchanged, while retail
sales are actually lower.
Some recovery.
More Americans are on food stamps and the unemployment rate is almost
twice what it was when the recession began.
In fact the signs of the economy slowing even more now are visible in the
latest jobs numbers. For May the feeble addition of only 54,000 jobs
means the unemployment rate ticks up.
Last time the bureau declared a recession over, in November 2001,
unemployment didn’t pick up for two years.
So where did the bureau get the idea this time that the economy was
recovering in June 2009? It must have been influenced by Obama’s $830
billion "stimulus" package. While Bush’s billions for bankers
were still fresh in the their hands, the new president came into office
and began throwing more cash around. There was cash for clunkers, cash
for automakers and unions, cash for home buyers, cash for transportation
boondoggles, cash for politically-connected green projects, cash for
government buildings, cash for the arts.
You get the idea. Everybody was high on Obama billions. It was like
Saturday night at the Roxy. But given enough cocaine you can probably
even get a corpse to show a pulse.
It must have been a fun party. The Keynesian economists and other
statists thought that it would go on and on and the bill would somehow
take care of itself.
The takeaway from all this is to beware of all such boards, bureaucrats,
and bodies, especially those with designs on managing the economy. The
economy lives in the experience of people and not in seasonally adjusted
statistics and weighted aggregates. If you and sixteen million people
like you don’t have a job, you’re still in a recession.
So when the president says he’s not worried about a second recession, and
that you shouldn’t panic, he’s half right.
The first recession never ended.
http://lewrockwell.com/goyette/goyette19.1.html
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