President Obama is trying to scrape together some good economic news to hide behind. But the weight of the scandals and the bubble of the stock market only delay what could be a building calamity for this administration. The artificially enhanced stock market is allowing the 1 percent to feast while others slowly gather crumbs from the table. Classic trickle-down economics. It’s ironic that the only result of Obama’s policies has been to inflate the stock market and the wealth effect.
Obama and the Democrats point to a “recovery” that is actually just a period of temporary relief, a result of an adrenaline shock to the economy via interest rates that flood Wall Street with money, not the result of a healthy growth environment. Exports are flat, fewer people are saving, and the mean household income has decreased, even since the recession officially ended. And let’s not forget that a record number of people are receiving food stamps and unemployment continues to be problematic.
There’s very little top-line growth for American businesses, signaling that there’s very little legitimate economic growth. Yesterday, the Bureau of Economic Analysis released the second estimate of first-quarter gross domestic product growth for 2013, revising it down to 2.4 percent from the initial 2.5 percent estimate, and revealing that corporate profits simultaneously decreased. The National Association of Manufacturers’ latest report shows that manufacturing has declined in the United States this year because of a decrease in new export and domestic orders and a slowing of output and hiring in the manufacturing sector.
According to the Federal Reserve, “American households have rebuilt less than half of the wealth lost during the recession,” meaning that “a conclusion that the financial damage of the crisis and recession largely has been repaired is not justified.” The report echoed what I said a few weeks ago: The stock market boom and the resulting wealth effect allows Obama and the Democrats to skew our perception of economic growth in this country and obscures the underlying problems we face.
Obama and the Democrats aren’t seeking pro-growth policies, they are patting themselves on the back and working to convince Americans that economic renewal is just around the corner. Rather than be honest about our economic troubles, Obama and his allies seize on the distortions — such as the stock market — and use them as a smokescreen to try and push the scandals out of the headlines.