The White House's Economic Agenda
Obama Destroys the Middle-Class
By Mike Whitney
August 19, 2013 "Information Clearing House - According to a survey conducted by Gallup on August 15, 2013, Obama’s Economic Approval rating has slipped to 35%. A full two-thirds of the American people are now dissatisfied with Obama’s performance vis a vis the economy. The survey mirrors the results of an earlier poll (Aug 12) which found that a mere “Twenty-two percent of Americans say they are satisfied with the direction of the country… Three-quarters of Americans are now dissatisfied with the nation’s course.” (Gallup)
The surveys show that people are finally beginning to realize that Obama has been an unmitigated disaster and that the propaganda about economic recovery is just meaningless hype. To underline how bad things really are, consider this:
“Over the last six months, of the net job creation, 97 percent of that is part-time work,” said Keith Hall, a senior researcher at George Mason University’s Mercatus Center quoted by McClatchy Washington Bureau. Hall was head of the US Bureau of Labor (BLS) Statistics from 2008 to 2012.
Citing the BLS Household Survey, Hall said that over the past six months 963,000 more people reported that they were employed while 936,000 of them reported they were in part-time jobs. Hall continued, “That is a really high number for a six-month period. I am not sure that has ever happened over six months before.” (“Report: 97 percent of new US jobs are part-time”, World Socialist Web Site)
The only jobs being created under Obama are low-paying service sector positions that don’t pay enough to meet the rent. Which is why a record number of young people are living at home. Have you seen this?
“Last year, a record 36 percent of people 18 to 31 years old — roughly the age range of the generation nicknamed the millennials — were living in their parents’ homes, according to a new Pew Research Center analysis of Census Bureau data. …And despite the frequent stories of recent college graduates stuck on their parents’ couches (or in their basements or above their garages), it is actually young people without bachelor’s degrees who are most likely to be living at home….” (“Millennials, in Their Parents’ Basements”, Catherine Rampell, New York Times)
Don’t kid yourself, it’s nearly as bad for college grads. The only difference is that after you’ve wracked up $40,000 or $50,000 in student loans, you can proudly display your sheepskin on the wall in your Dad’s attic where you spend your days combing the internet for jobs that no longer exist in the good old USA.
And another thing: The only reason unemployment has gone down at all is because so many people have stopped looking for work altogether and fallen off the radar. If the BLS counted these lost souls, we’d be looking at 11.2% unemployment instead of the bogus 7.4 percent figure. But who cares what the numbers are at this point. What matters is that the economy stinks, and the smiling idiot at the top deserves a lot of the credit for that.
Did you know that according to the National Institute on Retirement Security, 45 percent of working-age households have no retirement savings at all? On top of that, high unemployment and hard times have forced more and more people to dip into their 401Ks just to make ends meet, which means that things are worse than the numbers indicate. Has Obama made any effort to address the pension catastrophe facing baby boomers and Generation Xers in the years ahead?
Sure, he has. He appointed a commission of deficit hawks (Bowles-Simpson) to figure out clever ways to cheat people out of their Social Security. That’s why Obama’s approval rating is circling the plughole, because people are finally wising-up to what a phony he is. Check this out from Dean Baker:
“It is unfortunate that President Obama has proposed a budget that has substantial cuts to Social Security. The vast majority of seniors are already struggling. The proposed cuts would be a reduction in their income of more than 2 percent. By contrast, his tax increase last fall cut the after-tax income of the typical wealthy household by less than 0.6 percent…
President Obama has accepted the agenda of the Washington elite, putting cuts to Social Security and Medicare at the center of his budget and offering little that will help to speed the growth of the economy and create jobs.” (“Obama Accepts the Agenda of Misguided Washington Elites”, Dean Baker, CEPR)
Amen, to that, Dean. And have you noticed the strong growth surge under Obama?
No, of course not, because there hasn’t been one. The second quarter (Q2) GDP just clocked in at a miserable 1.7 percent, most of which was due to an unexpected uptick in inventories. Absent that, GDP would have been below 1 percent which would be an embarrassment for anyone except the narcissist in chief. Get a load of this from Nick Beams at the WSWS:
“Over the past three quarters the US economy has grown at an annualized rate of only 0.96 percent, exposing the claims of the Obama administration that a “recovery” is underway. The fact that the US economy is able to achieve a growth rate just one sixth of the post-World War II average indicates that deep structural changes have taken place within the American economy and anything approaching previous growth rates will not be seen again.” (“US growth and jobs figures point to continuing economic breakdown”, Nick Beams, World Socialist Web Site)
Astonishing! Under 1 percent GDP for the last three quarters. What a joke.
The reason the economy isn’t growing is because the people in charge don’t want it to grow. It’s that simple. I mean, how hard is it to boost GDP: You spend a little money, you run up the budget deficits and “Viola”, the economy grows! It ain’t rocket science. What Obama and his paymasters want, is a subtler form of “structural adjustment”. (Subtler than the Euro-model, that is.) This is typical of the Democrats; they’re always trying to prove they can implement the same hard-right policies with more finesse than their blundering counterparts. But it all amounts to the same thing, doesn’t it? Everyone knows that the middle class is getting clobbered while all the gravy is flowing to the parasites on top.
Here’s something else from Beams article concerning the “disconnect between the level of profits and the rate of investment”:
“While pre-tax corporate profits are at record highs, amounting to 12 percent of GDP, net investment is barely 4 percent of output…. Increased profits are not being used to expand production, as took place in the past, but are increasingly being used to finance stock buybacks, so as to increase the rate of return on shareholders’ capital…
This result indicates that rising profits are no longer being produced by an expansion of the market, as they were in the past, but are increasingly the result of cost-cutting, as firms raise their bottom line by grabbing an increased share of a stagnant or contracting market from their rivals. In other words, the once “normal” process of capitalist accumulation—increasing investment leading to an expanding market, higher profits and further investment—has completely broken down.” (“US growth and jobs figures point to continuing economic breakdown”, World Socialist Web Site)
This is more than a minor technicality. If corporate profits are being recycled into stock buybacks and dividends instead of capital improvements and investment, then Obama’s deficit cutting policies are actually squelching growth rather than fueling it. Now take a look at this from Media Matters:
“The Congressional Budget Office has estimated that the sequester “will halve U.S. growth in 2013.” MarketWatch explained:
“U.S. economic growth in 2013 will be 1.4%, the Congressional Budget Office estimated on Tuesday….. CBO said however that growth would be about 1.5 percentage points faster in 2013 if not for fiscal tightening including the so-called budget sequester.” (“WSJ Ignores Experts To Downplay Harmful Economic Consequences Of Sequester”, Media Matters)
Looks like the CBO nailed it, doesn’t it? After all, there’s only a small difference between 1.7 percent and the predicted 1.4 percent. For all practical purposes, they’re the same. The economy is still not creating enough jobs, growth, or momentum. The world’s biggest economy is essentially dead-in-the-water, just where Obama wants it to be. That way he can compress wages, increase hardship, and further concentrate wealth and power at the top. Hurrah for Obama, Champion of the 1 percent!
Most people have figured out what’s going on by now. Our charismatic hologram president has led us down the primrose path. All the promises of hope and change were pure malarkey, not a word of truth to any of it. 10 million workers still can’t find a job, 47 million people are on foodstamps, 5 million borrowers are in some stage of default on their mortgages, the share of productivity gains going to workers is smaller now than anytime on record, “four out of 5 U.S. adults struggle with joblessness, near poverty or reliance on welfare for at least parts of their lives” (Associated Press), and according to the Fed’s 80-page tri-annual Survey of Consumer Finances, the median net worth of middle class families in the US fell by 38.9 percent between 2007 and 2010″ while “the median value of a US home dropped by 42 percent.”
Face it, Obama has been a disaster. Discretionary federal spending is lower than it’s been in a half-century, while the budget deficits are falling faster than anytime since WW2. What does that mean? It means Obama is sucking the stimulus out of the economy to put more pressure on wages and to reduce working people to grinding third-world poverty. It’s a stealth version of starve the beast, and it’s working like a charm. The middle class is taking it in the stern-sheets while Obama’s moneybags buddies laugh all the way to the bank.
Mike Whitney lives in Washington state. He is a contributor to Hopeless: Barack Obama and the Politics of Illusion (AK Press). Hopeless is also available in a Kindle edition. Whitney’s story on declining wages for working class Americans appears in the June issue of CounterPunch magazine. He can be reached at firstname.lastname@example.org.