Some 43 percent of the unemployed have been out of work for six months or longer, the highest level since the Great Depression. Roughly 50 percent of the jobs created have been part-time jobs without typical healthcare or retirement benefits. Less than a quarter of those hired from the graduating classes of 2006 to 2008 are working full time. The number of workers claiming disability in 2000 was 5 million—now it is 9 million. For the same period, the number of food stamp recipients has increased from about 20 million to 45 million. Consumer confidence stands at 64.9;—the historical average in expansions is 102 and in recessions 78—that's 13 points below the norm of a typical recession.
In effect, we are living with the statistics that mark a modern-day depression, hardly befitting the third year of an alleged recovery. There is little to show for a government stimulus of over $1 trillion a year for more than three years, a zero percent Federal Reserve rate policy, and a dramatic expansion of the money supply. We might say it could have been worse, but we still face secular headwinds from debt-burdened household balance sheets, eroding household-related wealth, structural unemployment, and the retrenchment in state and local government.
Part of the explanation lies in the administration's hostile attitude toward business, symbolized by the political and regulatory uncertainties best captured by President Obama's rushed healthcare bill which, according to studies by researchers at Stanford and the University of Chicago, produced an estimated loss of 2 million to 2.5 million jobs. Add to that the failure to reach an agreement to deal with our long-term deficits and you can understand the atmosphere in which businesses are less willing to invest and individuals are less willing to spend. No wonder 83 percent of voters in a Fox poll in April said they thought the country was still in a recession, and no wonder they can't understand why the president said the private sector is "doing fine."
Obama naturally blames his predecessor, George W. Bush, and the Republican Congress for the nation's travails. But voters tend to decide to rehire a sitting president on the basis of his record of solving the nation's problems, not on the basis of pointing fingers and blaming others.
It brings to mind the old saw about never going to a doctor whose office plants have died. Obama's office plants are his programs to deal with the recession, and they simply have not worked. Only 16 states, led by Texas, have posted any job creation since the president took office, according to Rosenberg, and 9 of the 11 swing states have less employment now than when the 2008 election took hold. That is what makes President Obama so vulnerable.
- James Rickards: Why Obama's Deficit Spending Is Making Things Worse
- Check out the U.S. News Economic Intelligence blog.
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