When you accumulate some of the adjectives from the pundits, the media, and other appraisals that were not from the right but from baffled sympathizers and centrists, there is no doubt that President Barack Obama clearly lost the debate this week, as a matter of both substance and tone. Take your pick from the river of insults: listless, meandering, lazy, dull-brained, long-winded, languid, and flaccid were just some of the epithets from the pundits. Even the New York Times opined that "He lost his competitive edge." The worst that Mitt Romney's relatively few critics could come up with was that his tax cut was unaffordable.
All Obama could do was repeat the charge, and Romney was able to make the pledge that he would not reduce revenues through his tax cut because they would be offset by the elimination of special write-offs and loopholes. What was remarkable was that Romney, who has been in everyone's dog house for months with an erratic campaign, has suddenly assumed the stature of a president. He was warm, articulate, logical, informed, forceful, and most important, presidential. He was more engaged, more detailed, more decisive, more animated, more aggressive in attack, and more robust in defense than the president, who was lackadaisical and without mastery of the facts or the ability to respond to what was put forth by his challenger.
But what is at issue isn't debating style, questions of posture and demeanor, "gotcha moments," or "You're no Jack Kennedy" zingers. The fundamental issue for America is that we seem to have lost our way and we haven't found it after four years of the Obama administration, thanks to a leadership so lacking that the American dream now seems to be a chimera of nostalgia. The president appears to have lost his intellectual interest.
It is all very well to raise a sword and cry "Forward!" but to what? Campaigning and barnstorming, at which Obama is very good, is no substitute for brainstorming to evolve a cohesive set of plans to deal with the current crisis. Yes, he inherited a financial crisis that he had no part in causing. But after the most stimulative fiscal and monetary program in the country's history—he racked up almost $5 trillion in deficits in four years, which had previously taken us 205 years to accumulate—we have had at least a retreat from the edge of the cliff with some emergence of occasional green shoots in the desert.
Still, roughly 60 percent of Americans believe the country is on the wrong track. The negatives remain grim and glaringly so on jobs, jobs, jobs and income. As for jobs, some 25 million Americans are without full-time work. Over 5 million have been out of work for 27 weeks or more. The share of the unemployed who have been out of work for a year or more has soared from 12 percent three years ago to over 30 percent today. The share of the population actually in the labor force has shrunk to a post-World War II low. Almost 8.5 million people have given up looking for a job, so they are not counted in the unemployment rate because they have not searched for work in the prior month.
The real unemployment rate is 15 percent, measured by what is called U-6, which includes people who are working part-time on an involuntary basis. We have 4.7 million fewer jobs than the peak reached at the end of 2007. And indeed much of the improvement in jobs has been through dubious "seasonal" adjustments, such as the July seasonal bump of 377,000 jobs—the largest such adjustment for July in the past 10 years. The labor participation rate has dropped to a 30-year low, and if not for that development, the unemployment rate would be much higher.
Fewer Americans are at work today than in April 2000, although the population has grown by 31 million since then. A worker between the ages of 50 and 61 who has been unemployed for over a year has only a 9 percent chance of finding a job in the next three months. A worker who is 62 years or older and similarly unemployed has about a 6 percent chance. And 50 percent of this year's college graduates are without jobs or are underemployed. What a waste.
It used to be that you were in the labor force if you had been looking for work some time in the last four years, but that was changed to one year in the later Clinton years. If we use that older and more reasonable standard, the unemployment rate would be at least more than one percentage point higher.
If you are on disability, you are not considered to be in the labor force either. As of April, we have added 5.5 million people to the disability rolls since the beginning of 2009, several million above the previous trend. There are now roughly 9 million people on disability. In 1992, there was one person on disability for every 35 workers. It is now about one for every 16 workers. It is hard to believe that so many people have become disabled; disability has literally become another fallback position for people out of work. If disability had stayed at the pre-recession growth rate, unemployment would be at least one percentage point higher, leading to a true unemployment rate much closer to 10 percent and perhaps significantly more.
Underemployment is still in the range of 16 percent, and that does not count people who have a job for which they are overqualified or who are making much less money because they are aren't working in their chosen field. John Williams at Shadowstats, who uses the U.S. government methodology from 30 years ago, tells us that the U-6 unemployment rate is around 23 percent. The difference is in how you create the model. The feds keep changing the rules, and it should be no surprise that with each new rule the number of people officially counted as unemployed drops. If you can't find a job, whether officially employed or not, you are still out of work. Far too many workers have been idle for extended periods, and it is crucial to get them back into the labor force before their skills atrophy and their earning power shrinks permanently.
Then there is well-being. Fifteen percent of the U.S. population lives in poverty. Some 44 percent of the 46.2 million poor Americans are in deep poverty, making half the poverty level, defined as $22,811 for a family of four. Fifty-four percent of the long-term unemployed who have found jobs have had to accept lower pay. The typical family is back to where it was in 1995. Median income in 2011 has fallen to $50,054, the fourth straight year of the decline in well-being. Fifteen percent of Americans are on food stamps, compared to 7.9 percent from 1970 to 2000. Some 400,000 people per month have been signing up for the programs over the past four years. In August, nearly twice as many people went on food stamps (173,000) as found a new job.
One-third of homes are worth less than their mortgage debt. Values remain 30 percent below the 2006 peak and now match the level of a decade ago.
No wonder the country is unhappy with its direction, as Americans do not accept the inevitability of American stagnation or indeed of Obama's re-election.
In the debate, the president asked for patience, but he has become a prisoner of unfilled promises. Soon after his inauguration, he declared in a TV interview, "You know, a year from now, I think people are going to see that we're starting to make some progress, but there 's still going to be some pain out there. If I don't have this done in three years, then there's going to be a one-term proposition." A few weeks after that he said, "It's an agenda that begins with jobs." A month later, he told us that not a day goes by that he doesn't wake up thinking of jobs and goes to bed at night thinking of jobs. But now he just assigns most of the blame to George W. Bush, without reminding everybody that he accepted responsibility for putting America back to work. In Warren, Mich., in July of his first year he said, "Now my administration has a job to do as well and that job is to get this economy back on its feet. That's my job. And it's a job I gladly accept. I love those folks who helped get us in this mess and then suddenly say, 'Well, this is Obama's economy.' That's fine; give it to me."
But he surrounded himself with clever people like him but with little business experience. And they were too sure of themselves to take heed of the warnings that we were in a bigger hole than they appreciated. This administration made the mistake of thinking that their crisis would not be as bad as the previous one; hence, the inadequacy of the famous stimulus, a point made by any number of commentators, economists, and historians. This is an administration that did not imagine that the economy would still need major help well beyond 2009. A Financial Times headline in June 2009, for example, decreed the White House "upbeat on economy." According to the New York Times, nine months later the administration said the economy was on the verge of "escape velocity."
But now the Obama team excuses its failure to grasp the severity of the slump by saying that even if they had seen the slow recovery coming, they couldn't have done much about it. When Obama has been asked about his mistakes, he talks not about his policies but about his messaging. But clearly the biggest mistake was his failure to recognize that we are up against an economic decline that requires nothing less than night and day concentration. The president was more cautious than one or two of his advisers wanted. He then left the essence of the $830 billion stimulus to the Democrats in Congress and barely 5 percent of the money was assigned to infrastructure, even as Americans hoped to see drills and bulldozers rebuilding the roads, bridges, and dams. Vice President Joe Biden said the stimulus was working beyond his "wildest dreams" and later vowed that Americans would have "a summer of recovery."
There were just too many false hopes. We were told that the stimulus would keep the unemployment rate under 7 percent and we should be seeing 5.6 percent by now. But we've never gone below 7.8 percent. And we have 7 million fewer full-time workers today than when Obama took office. He promised to create "five million new jobs in solar wind and geothermal energy." The job estimate was off by at least a factor of 10, and today many solar and wind industry firms are fighting bankruptcy. He pledged that he would cut the deficit in half. But the current deficit, estimated to be well above a trillion dollars, is double the 2008 figure.
What took the president's concentration was his own ambition to put the Affordable Care Act on the statute book, achieving what the Clintons had failed to achieve. He said his healthcare reform plan would "cut the cost of a typical family's premium by up to $2,500 a year." But premiums for employer-sponsored family coverage have increased by more than $2,300 in the last three years, according to the Kaiser Family Foundation.
Every president in modern times who has inherited a recession from his predecessor boasts a better track record. In fact, of the past 10 recessions, this has been the weakest recovery ever. And in the second quarter, GDP growth was down to 1.3 percent. And a slew of major hard data since the beginning of September have had to be revised sharply lower. Non-farm payrolls, retail sales, industrial production, and housing starts all received downward bumps, setting a stage for an even more sluggish performance in the third quarter. Durable goods orders in August served up another huge downward slide.
Indeed, the 1.3 reading on the second quarter GDP marks the weakest growth in the 12th quarter after a recession. By this time, at the same stage of a recovery, real GDP is expanding on average at 4.7 percent. That is after four years of $1 trillion plus fiscal deficits. Orders plunged to 13.2 percent sequentially during August, far exceeding the market expectations for a 5 percent decline.
More upsetting is that the majority of Americans are not optimistic about their children's futures. And never has Washington and the country been more polarized. Those without jobs and those toiling away outside their chosen professions are pessimistic and afraid about what the future holds. The employed, too, are apprehensive, worried that their jobs may disappear or their paychecks shrink.
Now what do we have? Both candidates and their supporters spending at least a billion dollars each to ensure that their respective political bases are enthusiastic enough to vote for them while seeking to win over the small group in the swing states who will decide the outcome. To adapt Winston Churchill, never have so many been dependent on the wisdom of so few.
- Read: Are Obama and Romney Good Leaders?
- Read Peter Roff: On Catholic Push Calls, If Not the Obama Campaign, Who?
- Read Leslie Marshall: Debate a Reminder to Obama Supporters: The Fat Lady Hasn't Sung