WASHINGTON — The painfully underperforming Obama economy remains Topic A here in the nation’s capital and across the country.
Pre-midterm election polls show that voters are just as unhappy as ever over President Obama’s mismanaged handling of the economic life of our nation, and Democrats are wringing their hands over expectations that it will cost them their congressional jobs on Nov. 4.
It’s gotten so bad that even some members of the liberal news media have become a great deal more critical of an economy that one analyst said “simply isn’t as healthy as the headline numbers suggest.”
Even former President Bill Clinton, the man who will be choreographing Hillary Clinton’s 2016 White House bid, is calling for cutting corporate tax rates as part of a sweeping overhaul of the tax code.
The pro-business U.S. Chamber of Congress ran a full-page ad in The Washington Post on Thursday with this quote from Clinton emblazoned across the top: “America has to face the fact that we have not reformed our corporate tax laws when 100 percent of the people, from Democrats, Republicans, Independents, agree we need to. … We have the highest overall corporate tax rates in the world. We need tax reform.”
Well, Bill, not all Democrats would agree with that. Ever since he took office, Obama’s been pushing to raise taxes on businesses, and has never really warmed to the idea of any reforms that would lower rates. Democratic leaders in Congress have been downright hostile to the idea.
The result has not only been tax reform gridlock, but a chronically lackluster economy held back by anti-investment, anti-growth and anti-job tax policies.
This doesn’t get reported on the nightly news, where the highly paid anchors have simply ignored these issues. But long-suffering, underpaid and jobless Americans are fed up with Obama and his party, and are ready to strike back with vengeance in the midterm elections.
And the polls say voters now trust the Republicans on the economy more than they do the Democrats.
Moreover, election handicappers this week said voters are not only likely to give Republicans full control of the Senate, but will also significantly expand the GOP’s hold on the House.
If the latter proves true, House Speaker John Boehner could end up presiding over the largest GOP majority in 85 years, observers said.
The polling numbers have gotten so bad for Obama and the Democrats that the president this week was preparing to deliver a speech insisting the economy has been better than you think under his policies. Yet even with his talent for cherry-picking only the best numbers and ignoring the bad ones, that’s still going to be a hard sell this week.
The stock market plunged across the board Wednesday in response to a plague of disappointing economic data and uncertainty about the future of the economy, held back by weak investment, full-time job losses, lower incomes, tighter consumer spending and a declining labor force participation rate.
The Institute for Supply Management (ISM) manufacturing index fell in September (dropping to 56.6 from nearly 59 points in August). So did ISM’s sub-index employment numbers.
Construction spending fell 0.8 percent; sales of existing homes were down; orders for long-lasting manufactured goods dropped by 18.2 percent in August; and consumer confidence fell in September to 86.0 points, the lowest point since May, according to the Conference Board.
The network news programs ballyhooed the economic growth rate that rose to 4.6 percent in the second quarter (April to June), and Obama is still bragging about a lower unemployment rate that has fallen to 6.1 percent.
The truth is that the economy’s gross domestic product (GDP) has been growing by just 1.7 percent a year, “about half the pace of the Reagan-Clinton years,” according to University of Maryland business economist Peter Morici.
And the “real jobless rate is likely closer to 20 percent, and the root cause is slow economic growth,” Morici writes in his weekly economic analysis.
The reason for this wide discrepancy? Not counted by the Obama administration’s Bureau of Labor Statistics “are prime working-age adults who have quit looking for a job, part-time workers who want full-time positions, and young college graduates who have enrolled in graduate school because they can’t find decent employment,” Morici says.
But the economy’s poor performance under Obama and the Democrats runs deeper than this on many other levels, especially among the middle class.
Median incomes haven’t budged, median net worth has fallen, even during the so-called recovery, and the middle class is poorer. For those who are lucky enough to have a job and perhaps a 401(k) retirement plan, its value took a huge hit this week from a declining stock market.
“It is no surprise, then, that people are still so gloomy about the economy. The recovery just hasn’t been much of one, or one at all, for most of them. Middle class wages are flat and middle class wealth is still falling,” writes economic analyst Matt O’Brien in The Washington Post’s Wonkblog.
All of this will determine the outcome of the midterm elections in little more than four weeks and the new political makeup of Congress.
A GOP Congress would mean it could send Obama a pile of job-creating, investment-making, income-boosting reform bills to get this economy running again.
For starters, it would mean veteran Sen. Orrin Hatch, a tax-cutting Republican from Utah, would become chairman of the tax-writing Finance Committee.
But it also means nothing changes at the other end of Pennsylvania Avenue, where Obama seems determine to veto anything that smacks of tax cuts, export trade expansion, increased energy development, and getting rid of a mountain of business regulations that have sent jobs overseas.
Absent a two-thirds vote needed to override his vetoes, it would mean the voters will have to wait two more long, frustrating years before we can fix what’s wrong with our economy.