Before the news of the stunning contraction of gross domestic product in the fourth quarter of 2012 completely evaporates from the headlines, I’d like to offer one more cause of the economic anemia we are suffering from. Part of the reason we have such low growth is what I call “the Obama effect” — or simply put, “the Obama drag.”
Commentators were quick to point out that the drop wasn’t so terrible. In fact, there were some obvious reasons offered for the worrisome drop, although no one saw it coming. Even President Obama’s own forecasters got it completely wrong. One thing I’m sure they don’t factor into their calculations and equations is the effect of Obama himself. Obama is bad for business but no one in the Obama administration is allowed to say so.
What was happening in the fourth quarter last year? Obama was heading for, and did in fact win, reelection. This obviously had a negative psychological effect on everybody who is either employed by the private sector or is an employer in the private sector. Avoiding the obvious is difficult. Obama’s promises to raise taxes, impose new health care and energy costs and generally unleash regulators on the American economy have created a drag on GDP.
Given all the factors that go into GDP growth, psychological or otherwise, isn’t it relevant that we have a president who is anti-business? Of course it is. He doesn’t hide that he’s anti-business and that he promotes higher taxes and higher costs. This reality will manifest itself in some meaningful way over the next four years. Readers, what am I missing?
Please read these two articles, which I think offer a good take on where we are from an economic standpoint.
In the first, David Harsanyi at Human Events states that our economic stagnation has become the “new normal.” He rightly argues that, “If the economy were as vibrant as President Barack Obama has told us it is, a belt tightening in a single sector of government [defense] surely wouldn’t be enough to bring about ‘negative growth.’ ” He provides a good snapshot of how the Obama administration’s own growth projection failures, out-of-control spending and the continued high unemployment rate all indicate that we shouldn’t expect economic growth.
The second piece, an editorial from Investor’s Business Daily, analyzes the liberal claim that spending cuts were to blame for the GDP contraction and concludes that the real reason for this drop in GDP is due to “Obama’s growth-choking policies.” Despite the Obama administration’s efforts to blame others for our economic malaise, it is clear that his policies are the reason for “the new normal” that is our “slow to non-existent growth.”
Going forward, any honest calculation of GDP growth needs to include the drag on the economy that is Obama himself.