The Obama Administration (aka The Gang the That Couldn’t Shoot Straight, The Keystone Cops, The Worst Administration Ever and a host of other non-flattering handles) has failed miserably in its economic efforts. To any non economist and non cult member it was obvious from the beginning that their programs could not and would not work. Unbiased common sense, generally found in non-economists, was the only pre-requisite to understanding why.
Allan Meltzer, one of the non mal-educated economists, discusses the key reasons why in a Wall Street Journal editorial:
Two overarching reasons explain the failure of Obamanomics. First, administration economists and their outside supporters neglected the longer-term costs and consequences of their actions. Second, the administration and Congress have through their deeds and words heightened uncertainty about the economic future. High uncertainty is the enemy of investment and growth.
It was not difficult to foresee the failure once the Obama team’s plans became known. Many blogs and economists published early articles arguing that Obamanomics could not work. After 18 months in, this Administration is still trying to blame Bush for their utter failure. Recall the difficulties President Reagan inherited from the hapless Jimmy Carter. While I should not depend upon old memories, I cannot once recall Reagan blaming Carter for his problems. First, such behavior was out of character for Reagan. Second, when you know what you are doing and confident in your actions, you don’t blame others. Third, success needs no scapegoats. As Dr. Meltzer pointed out, the economy under Reagan at this same point was growing at 9%.
The contrast with President Reagan’s antirecession and pro-growth measures in 1981 is striking. Reagan reduced marginal and corporate tax rates and slowed the growth of nondefense spending. Recovery began about a year later. After 18 months, the economy grew more than 9% and it continued to expand above trend rates.
Arguably, it is unfair to compare different economic events in different time periods. However, 18 months in, we are barely above water and gasping for air. That is nowhere near what the Obama Administration told us would happen if their programs were passed. Remember, unemployment was never going to get above 8%?
Many pundits are now predicting a second-dip recession beginning during the second half of this year. Some believe that the The Great Recession is morphing into The Great Depression. Forecasts and politics aside, the economic policies of this Administration must be judged as a dismal failure. They arguably have worsened the recession and, less arguably, placed the country closer to insolvency.
It is time to pronounce Obamanomics dead and move on to what does work. These remedies are not mysterious or unknown, only inconsistent with a socialist agenda.