US President Obama inherited an economic recession from his predecessor -- and promptly made it worse, and prolonged it to the point that there is no end in sight. There is no rational reason why Obama should have made a bad situation worse. Not a rational reason, but certainly an ideological reason. Obama's anti-private sector and anti-energy biases collaborated and conspired to bring the employment to population ratio down, and hold it there.
The dearth of business startups and consequent new employment are directly related to Obama policies of taxation, regulation, energy starvation, and a general anti-private sector bigotry that pervades the current US government like a deadly plague.
Under Obama, the new normal is depressed. Depressed economy, depressed employment, depressed national mood.
The timing of this prolonged Obama recession could not be worse for the global economy, with both Europe and China underperforming badly.
Europe, in particular, is in trouble. Viewing both Europe's debt crisis with its demographic decline in the same light, it becomes difficult to envision an easy way out of the continental mess.
China will continue to struggle as long as its prime export markets remain depressed. And when China struggles, the problems propagate all the way down the chain of exporting nations.
Without Obama, the natural tendency of US capitalism to power startups, new energy sources, and new employment could come into play. But as long as Obama and his wrecking crew remain in control, the US -- and thus the global -- economy will continue to subsist in a dwindling manner on artificial stimulants.
More for those with an extraordinary interest in economics
The US Economy is naturally bouyant. It wants to recover.
ReplyDeleteBut, it cannot recover during periods of uncertainty and intrusive
government regulation.
Everytime ObamaCare hits the headlines - employers quit hiring.
Interesting that the percent job losses graph had to cut it off at world war II, and not consider previous recessions and depressions, especially the long depression (ca 1873) and the great depression (1929). Both depressions were far worse than our current one, both in terms of duration, unemployment, and effect on GDP.
ReplyDeleteTruth is, probably nothing the government can do (and yes, that includes deregulation) is going to get us out of the mess that 30+ years of mismanagement put us in - it is structural and long lasting.
The cracks appeared right around the oil embargo, and nothing after that did anything but to reinforce systems that would lead to our decline.
All the 'fix' that was reaganism merely ballooned our deficits and exacerbated societal problems, and all bill clinton and bush I and II did was to enable large corporations and large government to privatise profit and socialize risk.
When it all came to a head in 2008, by that time the damage had been done and we live in the bloody aftermath of a cesspool of greed, corruption, and shady dealings which can largely be laid at the feet of the bloated finance industry.
Our only hope is that we can stench the bleeding until a new round of disruptive technologies comes to rescue growth - tech like ICT, nextgen education and healthcare, nanotech, and hopefully nuclear (although more and more likely the US ain't going to share in this).
So, in reality there was very little that Obama could really do. For various political and institutional reasons, the only real way he could stop things from sliding into a depression WAS to embolden confidence, which meant bailouts and guarantees. Without them, one great big kick to the balls later and our economy is on its knees, gasping, and we REALLY get a taste of what a depression is like.
I hope never to have that happen in my lifetime, and really hope the better angels of our nature come through with lots of technical advances to paper over our mistakes. Its happened in the past, here's to hoping it will happen now.
Ed
(ps - this is not to say that Obama is blameless. The one thing he COULD have done and didn't is go biblical on the management of one or more of the financial institutions that got us into this mess. He chose not to on the theory that it would 'hurt' the institutions in question.
He was wrong. We are left with a far larger 'too big to fail' problem that we had before 2008, and bankers who have gone back to business as usual. This mistake may just cost us dearly in the end.
)
The problems go back much farther than you appear to realise, h22. But in reality, no one could have expected that the US economy could outlast the greed for power and control coming from the political class and the politically connected.
ReplyDeleteOf course Obama's peculiar dysfunctional impacts on the US and world economies go much deeper than his supporters are capable of understanding, but it is not actually their fault. They were never equipped with the tools necessary for untangling the complex dynamics involved. And the emotions of Obama supporters . . . well, let's just say that the threat of cognitive dissonance protects them from anything close to an objective view.