The Obama Epic Fail Series, Part 2A: Economics

We are going to take a few days and discuss the track record of the Obama Presidency across several perspectives. The impetus for this discussion and review was the fact that when the world leaders and millions of French men and women rallied in France to protest and take a stand against global Islamic terrorism, this President embarrassed himself and the United States by NOT attending the gathering of world leaders in Paris. In our opinion, this was an epic fail and a missed historical opportunity.

Not only did he not attend, no high ranking member of his administration bothered to make the trip either. While world leaders of over 40 countries attended and high ranking officials of other countries made the trip, the highest ranking U.S. person was just the current French ambassador.

This snub of the French is a tremendous, and possibly historic, missed opportunity. This could have been a defining moment in the Obama Presidency where he rallied the rest of the world in its fight against global terrorism. The whole world was watching but apparently the President was back in the White House, rumored to be watching NFL football games instead of leading in Paris. 

If Obama was a true leader, he could have used the commonality of the fight against terrorism to also work on other global issues. The leaders of Israel and the PLO were at the rally with a common, shared goal of fighting terrorism. What a great time in might have been of using that common objective to move onto other problem resolution opportunities.

The Russian Foreign Minister was also at the Paris rally. Why not use the common goal of fighting terrorism to talk about the Ukraine and other troubling Russian and U.S. issues? But the President missed this historic window of leveraging this common objective across most of the world.

But missed opportunities seems to be the theme of this President. Whenever an opportunity to be bold, productive, epic, and a leader arose, this President, and the administration he has put in place, has usually failed and failed miserably. Bad economic policies, divisive race politics, a failing health care reform law, a clumsy foreign affairs management history, bad management processes as a Federal government bureaucracy teeters on the edge of total incompetence, etc., this administration has not been able to get out of its own way to attain any problem resolution at all.

Given that we are comfortable calling his absence in Paris an epic fail, we are going to take a few days and see if there are other epic fails that this administration has attained. We will discuss the policies track records of this Presidency over the next few days according to the following general topics and see if the failure as epic as his absence in Paris has been repeated in other areas of governance:

• Transparency and integrity
• Economic policy
• Foreign policy
• Healthcare policy
• Government management policy

Economic Policy Part A

I am not denying that Obama came into a difficult economic situation when he came into office. The country was in the midst of the Great Recession. Banks were failing, unemployment was sky high, and economic growth was lousy. 

However, he was not the first President that inherited a tough economy. Reagan took office after the disastrous Jimmy Carter Presidency. During that Presidency, a new economic term was coined, stagflation. Previous economic theory stated that you could not have high inflation and high unemployment at the same time. However, Carter mangled the economy so much that we had high inflation, high unemployment, sky high interest rates, and anemic economic growth all at the same time.

But what did Reagan’s economic policies and strategies produce:

• Seven consecutive years of economic growth that never fell below 3.5% a year.
• In four of the seven years, economic growth was above 4.0%.
• One year economic growth was over 7%.

All this robust economic growth came from a place of stagflation. Thus, the argument to protect Obama’s economic performance because of the Great Recession is an empty one compared to what Reagan accomplished. 

Even Clinton’s Presidency recovered nicely from a recession, averaging 4% growth coming out of a recession. And both Reagan and Clinton did not have the economic tailwinds that Obama enjoyed:

1. Spending over $800 billion on an economic stimulus program that failed miserably.
2. Adding over $7 trillion of government deficit spending to the economy and the national debt.
3. Benefiting from over $3 trillion of Federal Reserve printed money that was added to the economy.
4. An energy revolution that caused energy prices to drop substantially and created loads of high paying energy industry jobs.

So given this historical background, let’s see how badly the Obama Presidency has come up short and decide if this is also an epic fail.

First, the good news:

• The traditional unemployment rate has been slowly decreasing over the past few years.
• The weekly filing of first time unemployment benefits has been slowly decreasing over the past few years.
• Inflation has been under control during the entire run of the Obama Presidency.

Now the bad news:

• Despite the four favorable economic tail wind components discussed above, annual economic growth during the Obama Presidency has never been above 2.5%, substantially below the Reagan and Clinton Presidencies and certainly below the long term average annual growth rate of the country over the centuries.
• Adding over $7 trillion to the national debt has added over $60,000 in debt burden to every American household and Obama administration economic policies have put us on a path of record deficits both during his tenure and for years afterwards (click on graph for a larger view):

• While the Federal 2014 deficit has been cut in half in 2014 (to just over $400 billion) vs. earlier Obama deficits, it is still higher than any annual deficit run up by any other previous President.
• Even worse from a debt perspective, Obama’s economic policies have pushed the national debt to GDP ratio to over 100, far higher than it has been in at least twenty years and at a level that puts on a par with countries around the world who are approaching insolvency:
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• His tactical economic policies and programs such as Cash For Clunkers, Cash For Appliances, HARP, Solyndra, etc. have spent billions of taxpayer dollars with no societal benefit in return.
• According to a recent analysis by the National Association of Counties, housing prices have recovered in less than half of all U.S.counties more than four years after the recession ended, about 75% of county economies are still below their pre-recession employment levels, average wage levels have declined in half of all county economies between 2012 and 2013, and only 65 counties across the entire country have recovered to pre-recession levels in jobs, unemployment, GDP, and median home prices.
• While inflation has been under control and gasoline prices have been dropping, Obama's energy programs have driven U.S. electricity rates to sky high levels, sapping American households of whatever gas savings they may have been experiencing:

This concludes the first half of our economic discussion and whether or not the Obama administration's management of the economy was also an epic fail. We will finish the discussion tomorrow but based on what see today, epic fail is probably a very good bet.

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