How’s the Barack Obama and Harry Reid economy working for you?
They claim to care about the poor and middle class, ethnic and racial minorities, and “the little people.” They’re going to stop the greedy 1-percenter fat cats on Wall Street from taking advantage of the 99 percent of us on Main Street. And their policies will deliver an economy that works for everyone.
So, when does all that kick in? Because, so far, they haven’t delivered on any of it. The actual economic results under their leadership are much worse than what they falsely claim Republicans always deliver. Obama/Reid have overseen he worst non-recovery since the Great Depression, one in some ways worse than even that episode.
Let’s go to the numbers and facts, as reported in The Wall Street Journal from government sources.
Most important are the average paychecks of all Americans — the measure of whether the economy works for the middle class and all of us. Yes, the real median income finally rose for the first time in six years — by a miniscule 0.3 percent from 2012 to 2013, but the Census Bureau says that rise wasn’t even statistically significant. And the $51,939 level in 2013 is nearly eight percent lower than the level in 2007, before the recession.
In fact, while Obama and Reid have controlled US politics, our real average incomes fell every year until 2013. No doubt they have a story as to how that’s all George W. Bush’s fault. His economic record left much to be desired, for sure, but at a certain point Obama, Reid and the Democrats must man-up to their own abject failures: namely, that incomes have been lower under their leadership than during the Bush years. Today’s incomes are back to 1996 levels, five years before Dubya took office.
How’d they do on helping the poor and middle class? From 2003 to 2013, incomes fell for all deciles — the top 20 percent, the bottom 20 percent and all three levels in between. In percentage terms, incomes declined least for the top 20 percent, who benefited from the prosperity in capital markets that hasn’t spread to the rest of the economy.
So, the real story is the cronyism of Obama and Reid with the fat cats, because the only sustained increase is for the top five percent since 2009. Meanwhile, although the poverty rate also declined in 2013 for the first time in six years, the current poverty rate remains much higher than before the Great Recession and Non-recovery. Almost 45.3 million Americans lived in official poverty last year.
What about ethnic and racial minorities? With overall incomes declining from 2003 to 2013, it’s not surprising that paychecks for all major ethnic and racial groups also dropped. Income differences by group remain substantial, with Asian Americans earning significantly above average and non-Hispanic whites somewhat above the average. But incomes for Hispanics and especially blacks remain dismally far behind. So, Obama and Reid haven’t delivered on that front, either.
While the Great Depression was much deeper than our Great Recession, its recovery in real incomes took hold sooner in that cycle than ours has, and it was rolling along by this point. We’re still dealing with a sluggish economy in which some sectors haven’t recovered at all, as shown especially by employment figures.
While Obama and Reid celebrate that the standard unemployment rate is recently down to 6.1 percent, in 2003-07 (before the recession) it averaged only 5.2 percent. Moreover, when we add in all persons marginally attached to the labor force and the total numbers employed part-time for economic reasons, the so-called U6 rate is now 12 percent, versus 9 percent in 2003-07.
In that same period, the average number of long-term unemployed persons has almost doubled, from 1.54 million to 2.96 million. And the part-timers seeking full-time jobs have increased from 4.44 million to 7.28 million. Essentially, what has happened is that labor force participation by the core of the working population — workers ages 25 to 54 — has dropped from 83.3 percent to 81.1 percent. Overall labor force participation for people over 16 has dropped from 66 percent to 62.8 percent.
Maybe the percentages sound small, but this fact shows how awful the record is in human terms: 8 million people have dropped out of the productive economy. Also, participation among the prime-age group has fallen more for men than women, and it has fallen more for less-educated folks than for college graduates. Thanks, Barack; thanks, Harry.
Why has the Obama/Reid economic record been as complete a failure as their foreign policies? Because they have disdainfully paid little attention to these key aspects of public policy, but instead been focused on Obamacare and their other Progressive hobby horses. It’s time to again put the adults in charge.
Ron Knecht of Carson City is an economist, law school graduate and Nevada higher education regent.