There was one good thing about getting the first red-ink GDP report in four years — it reminded everyone that Barack Obama has all but ignored the economy. Even before his declaration last year that “the private sector is doing just fine,” Obama’s attention had drifted into contraception, redefining religious practice, the Life of Julia, and all sorts of other demagogic wedge issues — while the workforce declined and the economy stagnated. Obama barely mentioned jobs in his inaugural speech last week, which included only one mention of the word “economy.” Suddenly, the Political Ghost Of James Carville arose to remind everyone that it’s still the economy.
The White House reacted as though they just woke up from a two-year dream to blame the Republicans, and corporate jet owners:
White House press secretary Jay Carney laid the blame for a surprise economic contraction squarely at the feet of congressional Republicans Wednesday, saying economic threats during the “fiscal cliff” negotiations had prevented important defense spending. …
Carney said economic observers were “rightly appalled” by the threat of sequestration or default to drive a debt deal, and charged that Republicans were harming the economy to the benefit of the wealthiest Americans.
“It can’t be we’ll let sequester kick in because we insist tax loopholes remain in place for corporate jet-owners,” Carney said.
That sounds like a great rebuttal … for 2011. John Boehner immediately reminded Carney that the sequestration idea came from Obama and the White House, not the Republicans. Today, Investors Business Daily demolishes the argument that the GDP drop was due to spending cuts, and that the problem is the acceptance of stagnation as the standard of economic excellence:
An interesting theory. Except that while the BEA says defense spending declined in Q4, overall federal spending was up $31 billion compared with Q4 2011 and up $98 billion compared with Q3 2012, according to monthly spending reports out of the Treasury Department.
And even assuming that the “huge cuts” from the sequester go through, spending this year will be about $570 billion higher than in 2008, and will consume 22.4% of GDP — a level reached only four times in the 63 years before Obama.
So maybe it’s the lack of adequate stimulus?
Perhaps, but only if you ignore the Fed’s massive ongoing pump-priming efforts, and the fact that the deficit in Q4 alone topped $292 billion — nearly double the deficit for all of 2007.
The lack of good excuses might explain why Obama and Co. are so desperate to put a positive spin on the numbers.
Democratic Party communications director Brad Woodhouse actually tweeted that this was “the best-looking contraction in U.S. GDP you’ll ever see.”
That’s one way of looking at it.
Another is that slow to non-existent growth has become the new normal thanks to Obama’s growth-choking policies, with the economy consistently underperforming expectations.
That’s the same argument I make in my column today at The Fiscal Times. The Obama administration is spending all of its time on finding ways to hamper business and investment, so it’s not surprising that we are beginning to see the consequences of malignant indifference:
But why should anyone else other than analysts have been surprised? The Obama administration hasn’t focused on job growth since the 2009 stimulus package, which failed at even maintaining the workforce participation levels of June 2009 when the economy stopped contracting after the Great Recession. At that time, the civilian population participation rate in the workforce – the relative measure of how many adults either have jobs or are actively seeking one – was 65.7 percent, the same as when Obama gave his first inaugural address. It’s presently at 63.6 percent, just a tenth of a point up from the 31-year low hit in August 2012. As jobs decrease, so does economic dynamism, and potential growth. …
It’s not just conservatives that have noticed a lack of focus on job growth, either. Mother Jones lamented the lack of action from Obama and his Jobs Council. That panel of advisers was created in the aftermath of the 2010 midterm elections after the President got punished for a lack of focus on the stagnating economy and prolonged joblessness. The council’s mandate expires today, and as MJ reports, it’s clear that it was never intended to seriously focus on its purported mission:
“The council hasn’t met in over a year (its last meeting was January 17, 2012) and has only met four times since it was created. Last summer, the White House said that the council had not convened in the past several months because the president had “a lot on his plate.” The panel has put out a total of three policy recommendation reports, but that hasn’t translated into much actual movement on jobs.”
“A lot on his plate?” Like what, exactly? Oh, right – demanding that employers provide free birth control to employees, binders full of women, and Mitt Romney’s tax returns.
Unfortunately for the White House, it’s impossible to distract people from a contraction in GDP. Unfortunately for us, they’re still trying to do so.