As the 2012 Presidential campaign heats up, and the President tries to gain re-election, the issue of the economy is going to be one of the biggest battlegrounds topics.
Barack Obama ran his campaign in 2008 taking a strong issue with the economic policies of the Bush Administration and on top of the fall 2008 economic crisis. He promised 'fundamental change' in the US if he was elected - and advocated the approach to increase the size and scope of the Federal Government.
Now, the President is going to be running on the basis of his record. But will that record be presented as facts or myths?
Investor's Business Daily published an article on Wednesday that addresses '5 Myths about Obama's Economic Recovery'. The article demolishes the top 5 claims being made by the President and his supporters, including those in the mainstream media, that the President's economic record is worthy of another 4 year term in the White House. The myths the article addresses include:
1. The claim that the 2008 recession was 'unexpectedly severe' and that 'we didn't know how bad it was'. These are spurious claims because economists in early 2008 were predicting a major recession before the end of the year - and after the September 2008 financial crisis, Barack Obama started calling (and continued well into his 1st year in office) the economy the 'worst financial crisis since the Great Depression.
2. Another excuse used by the President and his supporters that is a myth is the claim that the hole the bad economy put the Administration in was so deep that it has been exceptionally difficult to climb out of. The recession of 2008-9 was very deep - lasting 18 months and sending unemployment to 10.1%, but the 1981-82 recession during the Reagan Presidency lasted 16 months and sent unemployment to an even higher 10.8%. However, once the 1981-82 recession ended, the US economy was experiencing robust economic growth, not the anemic 1% to 1.5% growth we are seeing now and real unemployment (U-6) at 15.6%.
3. The President is now giving interviews where he is indicating that 'everyone knew' an economic recovery would take a long time, more than one 4 year term in office. But in March 2009, that was not the story being presented by the President. No, this is about the statement made by the President that if he was unable to turn the economy around in 3 years, he didn't deserve a 2nd term. This is about the President saying that the economy is 'not as bad as we think they are now' and that 2011 would see an annual GDP growth rate of 4% (it's 1.17% thru the first 3 quarters), and 7.1% unemployment (9% thru the first 3 quarters).
4. Another meme being used to minimize the failures of the Obama Administration's economic policies is that recoveries from severe financial crisis like those experienced in late 2008 are 'inherently slower'. Yet, now as we approach the end of 2011 and look back at the economic conditions in this country across 2010 and 2011, there is absolutely no evidence that the current economic conditions are related to the fiscal crisis of late 2008. In reality, the current economic conditions are reflective of the misplaced and misguided economic policies and regulatory agenda of the Obama Administration which impede private enterprise and job growth.
5. The last major myth addressed is the one that is often presented that 'things' would be much worse if the President had not acted as he did once he gained office. We were told that the $825 billion stimulus effort of March 2009 was needed to restore the economy....but this stimulus failed completely to stimulate the economy. What it did was establish the new pattern of regular $1.2 trillion or higher budget deficits in each of the first three years of the Obama Administration, as well as having the current fiscal year projected to exceed this amount. The Administration that ran, and still tries to run on the huge deficits and $5 trillion added to the national debt during the 8 years of the Bush Administration, added another $5 trillion to the national debt (now exceeding $15.1 trillion - 102% of GDP) in just over 3 years.
The actions of the Obama Administration, in terms of its policies and regulatory efforts, have made the US economic conditions far worse than if nothing at all was done. In fact, if the marketplace was left alone in 2009, the economic conditions would be far better than they actually are today.
Milton Friedman, a Nobel laureate economist, is one of the father's of conservative economic theory. During his career, he noted in a number of memorable quotes, a number of truths that stand up against the progressive economic theories enacted by President Obama to promote bigger government / a more expansive government as being the solution to economic challenges...
"If you put the federal government in charge of the Sahara Desert, in 5 years there'd be a shortage of sand."
"When everybody owns something, nobody owns it, and nobody has a direct interest in maintaining or improving its condition. That is why buildings in the Soviet Union -- like public housing in the United States -- look decrepit within a year or two of their construction..."
"There is all the difference in the world, however, between two kinds of assistance through government that seem superficially similar: first, 90 percent of us agreeing to impose taxes on ourselves in order to help the bottom 10 percent, and second, 80 percent voting to impose taxes on the top 10 percent to help the bottom 10 percent -- William Graham Sumner's famous example of B and C decided what D shall do for A. The first may be wise or unwise, an effective or ineffective way to help the disadvantaged -- but it is consistent with belief in both equality of opportunity and liberty. The second seeks equality of outcome and is entirely antithetical to liberty."
"Nobody spends somebody else's money as carefully as he spends his own. Nobody uses somebody else's resources as carefully as he uses his own. So if you want efficiency and effectiveness, if you want knowledge to be properly utilized, you have to do it through the means of private property."