“All the Recovery We Will Get”?

Nobel Economist Suggests Democrat Policies Have Created a New Normal of High Joblessness, Slow Growth and Economic Stagnation

• This week a Nobel prize-winning economist suggested that President Obama’s policies are “imitating European policies” and may have created a new normal of low growth and high unemployment. If so, he argues that “the weak recovery we have had so far is all the recovery we will get.”
• After last Friday’s “horrific” unemployment report, the economic news this week kept getting worse, with dismal news about retail sales, small businesses in a hiring freeze, high youth unemployment and a widening trade gap.
• Despite growing proof of a stalled recovery, Democrats are continuing with their “Summer of Excuses” and grasping for whatever justifications they can find to defend their failed policies.

BACKGROUND:

This week a Nobel prize-winning economist suggested that President Obama’s policies are “imitating European policies” and may have created a new normal of low growth and high unemployment. If so, he argues that “the weak recovery we have had so far is all the recovery we will get”:

“Robert Lucas, the 1995 Nobel laureate in economics, has spent his career thinking about why economies grow, and in particular about the effect of policy making on growth. …

“In May, Bob Lucas pulled his thoughts together and delivered them as the Milliman Lecture at the University of Washington, an exercise he described to me this week as ‘intelligent speculation.’

“Here is the lecture’s provocative final thought: ‘Is it possible that by imitating European policies on labor markets, welfare and taxes, the U.S. has chosen a new, lower GDP trend? If so, it may be that the weak recovery we have had so far is all the recovery we will get.‘” (Daniel Henninger, “The Disappearing Recovery: What if the Weak Recovery is All the Recovery We Are Going to Get?”, The Wall Street Journal, 7/13/2011)

After last Friday’s “horrific” unemployment report, the economic news this week kept getting worse, with dismal news about retail sales, small businesses in a hiring freeze, high youth unemployment and a widening trade gap:

“HORRIFIC” JOBS REPORT WITH 9.2% UNEMPLOYMENT RAISING FEARS OF “DOUBLE-DIP.” (Patti Domm, ” ‘Horrific’ Jobs Report Renews Fears of Double-Dip Recession,” CNBC, 7/8/2011)

NFIB: SMALL BUSINESS OPTIMISM DIPS TO NINE-MONTH LOW. (Jillian Berman, “Small-Business Index in U.S. Fell in June to Nine-Month Low,” Bloomberg Businessweek, 7/12/2011)

CHAMBER OF COMMERCE SURVEY: SMALL BUSINESS NOT HIRING, MAJORITY BELIEVE ECONOMY IS ON “WRONG TRACK”: “A majority of U.S. small businesses fear the economy is on the ‘wrong track’ and do not plan to increase hiring in the coming year, according to a new survey from the U.S. Chamber of Commerce Monday. …

“The study found that 64 percent of small businesses are afraid to make new hires in the near future, although only 12 percent plan to cut jobs.”(Tim Devaney, “Survey Finds Small Businesses Not Ready to Hire,” The Washington Times, 7/11/2011)

“WIDEST TRADE DEFICIT IN MORE THAN TWO AND A HALF YEARS” LEADS TO LOWERED GDP FORECASTS: “The U.S. notched its widest trade deficit in more than two and a half years in May as imports rose and exports declined, suggesting trade would provide less of a boost to second-quarter growth than previously expected.” (Conor Dougherty, “U.S. Trade Gap Widens,” The Wall Street Journal, 7/12/2011)

RETAIL SALES DISAPPOINT: “One key measure — retail sales excluding autos, gasoline stations and the building-materials segment, or what some economists call control-group sales — rose 0.1% in June. This is the smallest gain in this category since last July.” (Greg Robb, “June Retail Sales Edge Up 0.1%,” MarketWatch, 7/14/2011)

EMPLOYMENT FOR YOUNG PEOPLE AT “LOWEST LEVEL SINCE THE LABOR DEPARTMENT BEGAN TRACKING DATA IN 1948”: “More than 17 percent of 16-to-24-year-olds who are looking for work can’t find a job, a rate that is close to a 30-year high. The employment-to-population ratio for that demographic—the percentage of young people who are working—has plunged to 45 percent. That’s the lowest level since the Labor Department began tracking the data in 1948.” (Jim Tankersly, “The Glum and the Restless,” National Journal, 7/11/2011)

Despite growing proof of a stalled recovery, Democrats are continuing with their “Summer of Excuses” and grasping for whatever justifications they can find to defend their failed policies:

OBAMA SAID HE WAS “LARGELY SUCCESSFUL” IN STABILIZING ECONOMY, DESPITE THE FACT THAT “STUBBORN” UNEMPLOYMENT IS FAR ABOVE HIS 8 PERCENT MARKER: “Now, we took very aggressive steps when I first came into office to yank the economy out of a potential Great Depression and stabilize it.  And we were largely successful in stabilizing it.  But we stabilized it at a level where unemployment is still too high and the economy is not growing fast enough to make up for all the jobs that were lost before I took office and the few months after I took office.  So this unemployment rate has been really stubborn.” (“Press Conference by the President,” The White House, 7/11/2011)

TREASURY SEC. TIM GEITHNER SAYS “RIDICULOUS” TO JUDGE OBAMA ON DEBT AND UNEMPLOYMENT. NBC’S DAVID GREGORY: “Talking about what’s good for the economy, a lot of this discussion about debt is ultimately to free up space for jobs to be created. It’s not happening. People are still out of work. Here’s the chart of the President’s economic record. This is based on government information, Treasury Department, U.S. Bureau Of Labor Stats – unemployment 7.3% on Inauguration Day, up to 9.2%. with latest report, up 26%. You see the debt figures up 35%.” SEC. GEITHNER: “David, let me just say, that’s a ridiculous table.” (NBC’s “Meet the Press”, 7/10/2011)

WHITE HOUSE CHIEF OF STAFF BILL DALEY SAYS THE “POLITICAL SYSTEM” IS TO BLAME FOR WEAK ECONOMY: “I do firmly believe that one of the wet blankets on this economy and on companies, on the system right now, is a question as to whether or not our political system, whether the leaders can get together, whether they can solve big problems or they’re going to just kick the can.” (Imtiyaz Delawala, “Bill Daley: President Obama Still Wants a ‘Big Deal’ on Deficit Reduction,” ABC’s “This Week”, 7/10/2011)

OBAMA ADVISOR DAVID PLOUFFE PRE-EMPTS JOBS REPORT, CLAIMS “VISION” MORE IMPORTANT THAN JOBS: ” ‘People won’t vote based on the unemployment rate, they’re going to vote based on: ‘How do I feel about my own situation? Do I believe the president makes decisions based on me and my family?’ … Plouffe said what voters really want is ‘vision.’ “(Julie Mason, “Plouffe: It’s About Vision, Not Jobs,” Politico, 7/8/2011)

OBAMA CLAIMED “WE’VE ALWAYS KNOWN THAT WE’D HAVE UPS AND DOWNS.” (“Remarks by the President on the Monthly Jobs Report,” The White House, 7/8/2011)
AFTER HE SAID HIGH UNEMPLOYMENT NOT A PROBLEM BECAUSE THERE ARE ALWAYS “BUMPS ON THE ROAD.” (“Remarks by the President to Chrysler Workers in Toledo, Ohio,” The White House, 6/3/2011) 

A PHRASE ECHOED BY OBAMA’S TOP ECONOMIC ADVISOR: ” ‘There are always bumps on the road to recovery, but the overall trajectory of the economy has improved dramatically over the past two years,’ Goolsbee said in a statement posted Friday to the White House blog.” (Alexander Bolton, “Obama’s Economic Chief Says Job Numbers Are A Bump in the Road,” The Hill, 6/3/2011)