If Obama’s goal had been to create the economy we have today, he would have had to have given a very different stump speech during his reelection campaign last year. Here’s what he would have had to say:
If you reelect me, I will do everything in my power to keep interest rates close to zero, push money into the stock market and stimulate what is commonly referred to as the “wealth effect.”
Bolstering the stock market will create billions of dollars in new wealth for the holders of American equities. Of course, the bigger and stronger stock portfolios will do better than the small savers. Turbo-charging the stock market will juice the wealth effect, and hopefully people whose net worth has spiked will rake some of the money off the table and spend a portion of their new wealth on everything from home construction and cars to weekend houses and luxury goods.
And naturally, a red-hot stock market will increase the borrowing capacity of America’s wealthiest citizens, largest corporations and hedge funds. The wealthy will spend more, corporations may choose to invest some of that money here in the United States, and the hedge funds can take on more leverage and make even bigger bets on the stock market.
Simultaneously, I’ll be doing all I can to implement provisions of the Dodd-Frank bill so that we don’t lend to marginal and risky borrowers. Only those with the strongest collateral will be deemed eligible to borrow, thereby ensuring the profitability of America’s banks.
This is the reality that the Obama economy has produced. In America we now have “trickle-down” economics in its purest form ever. The rich have gotten richer and the gap between the rich and the poor has grown — and continues to grow — because of Obama’s policies. Since Obama was first elected in 2008, income inequality has widened and household incomes have dropped. Read Peter Ferrara’s piece in the American Spectator, “Obama’s Rising Inequality,” for a detailed, powerful look at how the Obama economy has made that happen. Obama couldn’t have designed a better way to boost the balance sheet of the 1 percent if he had tried.
Actually, the Obama campaign machine warned us throughout 2012 that this was what the world would look like if Mitt Romney were elected. Obama said that if Romney was president, we would be faced with an economy that served the interests of only Wall Street paper traders, big investors and whoever could borrow the most money. Well, Romney wasn’t elected, but we do find ourselves in the world that candidate Obama described. We arrived at this point not because he wanted us to but because along the way, neither he nor his economic advisers have understood the consequences of their actions. As a result of his lack of sound economic planning, his policies have enhanced the wealth of the 1 percent while developments such as increased gasoline prices, higher taxes, anti-business regulation and the harsh realities of his jobless recovery have stifled middle-class opportunity across America.
The Obama economy has succeeded in keeping the government’s foot on the neck of entrepreneurs and job creators while at the same time flooding the elites and the Wall Street titans with more wealth. All that is left for most of the remaining 99 percent is what trickles down from the rich or what is handed out by the Obama-sponsored welfare state. As the president pats himself on the back today in Texas, it’s worth keeping in mind the reality of what the Obama economy has produced.