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Right Turn
Posted at 11:00 AM ET, 10/28/2012

Obama’s weak economic performance

Mitt Romney uses “growth” a lot in his speeches and interviews. He talks about “growing the economy” and “private-sector growth.” He talks about “job growth” and “growth in take-home pay.” By contrast, the president rarely does. He talks about raising taxes and “investment” (i.e. government spending). But for all the lip service to the private sector, he seems not to be bothered about the conditions that are necessary to promote growth.

It’s not surprising, then, that we get such paltry economic results under this president, who deems the absence of a downward spiral to be “heading in the right direction.” Less than 2 percent growth so far for this year (1.7 percent to be exact) is simply awful, no matter how President Obama may try to spin it.

The Wall Street Journal editorial board makes some interesting observations:

That’s slower than last year (1.8%), which was slower than the year before (2.4%). The current recovery has had only two quarters, but not a single year, with growth above 3%. . . . Republicans on the Joint Economic Committee report that the typical growth rate at this stage of the previous nine recoveries (13 quarters) averaged 16.8%, and 19.6% in the Reagan expansion. The figure for this recovery is a meager 7.2%. That’s about $1.2 trillion in foregone output. The budget deficit would be half as large today if this were a normal expansion.

But Obama’s “solution” to a dragging economy is — that’s right — more borrowing and more spending. (“Keep borrowing more than $1 trillion a year and keep the Fed printing money at historic levels, in return for mediocre growth and stagnant incomes.”) This has never worked as a recovery strategy, especially when you add in tax hikes and a raft of excessive regulations, all of which have raised the cost of doing business and made labor more expensive. (Better to have your existing workforce put in overtime than hire people.)

One is sometimes tempted to ask Obama if we can lower unemployment without private-sector growth. That seems to be what he’s trying to accomplish. He doesn’t seem to understand the connection between economic expansion and job creation; or alternatively, he seems to be convinced that government can pile a nearly unlimited load of regulations and taxes on the backs of American businesses without adversely affecting investment and hiring decisions.

In point of fact, without robust economic growth and without an administration that seeks to accelerate growth rather than weigh down the private sector, we won’t have strong job creation. Put differently, without a president who understands the connection between government policy growth and job creation we’re never going to get out of the Obama slump.

By  |  11:00 AM ET, 10/28/2012

 
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