The economy may or may not wind up in a technical recession (two quarters of negative growth), but in fact the Obama economy never really made a recovery. Its endemic low growth and high unemployment now define the U.S. economy — unless we chart another course.
Douglas Holtz-Eakin of the American Action Forum commented via an e-mail blast: “The bottom line: The January jobs report shows the economy moving sideways. Liberals are celebrating a revision of 35,000 jobs a month in 2012 — proof that they are charter members of the flat-earth society. When the economy is stalled, the new normal says “break out the champagne.” As he points out, the U-6 unemployment rate (underemployed and unemployed workers) is stuck at 14.4 percent.
Because it is politically uncomfortable to point out how awful the job market is, liberal pundits continue to play along with the notions that the economy is getting better and a surge in economic activity is right around the corner. (As with not much else, reality, intellectual consistency and the issues the left cares about take a back seat to simply sustaining the Obama cult.) After years of this economic anemia, we know what we are really in is not a “recovery” but a low trough in which economic activity is insufficient to push up employment, earnings and household wealth.
How bad is this? Jim Pethokoukis of the American Enterprise Institute observes, that “back in January 2009 Team Obama economists Jared Bernstein and Christina Romer predicted the unemployment rate by 2013 would be closing in on 5%. (Of course, Obama’s economists also thought we’d be in a mini-boom of 4%-plus economic growth. That hasn’t happened either.)” He does the gloomy math:
When might the economy return to the sort of unemployment rate we saw before the Great Recession, say, 4.5% or so? Let’s assume a) labor force participation regains half the ground it’s lost over the past four years and b) job growth keeps turning in 2012-like performances. According to the Atlanta Fed’s jobs calculator, it would take another eight years to get back to the unemployment nadir of the George W. Bush administration. And that’s assuming we don’t suffer another recession between now and then.
While President Obama and Democrats in Congress have given up on growth and jobs and the mainstream media don’t bring it up (because the Democrats have given up), Republicans should not.
Republicans therefore need to examine every policy and explain every agenda item in terms of employment and economic growth. We need to do X because it will mean X number of jobs. (The Keystone XL pipeline, predicted to spur 20,000 jobs is the best example.) We need to reduce the debt because once it gets to about 75 percent of gross domestic product, it halts growth.
It is the same on health care: We need to dump Obamacare in favor of an individual health-care marketplace so you can buy the insurance you want; employers aren’t crushed under the cost and weight of Obamacare; and medical innovation (stifled by such things as the medical device tax and the Independent Patient Advisory Board) can revive, bringing new, high-paying jobs to the United States.
Without a change in regulatory, tax, spending, health-care and immigration policy, our economy will not revive. Republicans need to start explaining that we either are looking at a lost decade akin to Japan’s or a new, pro-growth agenda designed with one thing in mind: Get the job engine back.
It is remarkable that Democrats have been able to run from this issue. But it’s also shocking that Republicans have done so little with it.