Jul 02 2009

Obamanomics Proving To Be An Abysmal Failure

Published by at 11:20 am under Measuring The Recovery

Update: Innocent Bystanders has the most powerful picture of the disastrous Obamanomics:


Note the bottom, dark blue line which was the Democrats’ promise to America. While no one expects  a prediction to be 100% accurate, clearly these folks had no clue, and have no clue, what they are doing. It’s not even close.

One could even argue it would have been better if the Democrats had done nothing at all. Their fantasy liberal policies may have really made things much worse since we are now well beyond the ‘do nothing’ light blue line – and climbing.

One final observation: look at how long it will take to get us back to ‘normal’. The higher the peak the longer the recovery. We still have to top the hill and come back down. Therefore, we will be above 8% unemployment for months and months to come. It is a very powerful and sad picture. – end update

Update: Bloomberg notes:

Unemployment is projected to keep rising for the rest of the year just as the income boost from the stimulus package fades, undermining prospects for a sustained rebound in household purchases, analysts said. As companies fromGeneral Motors Corp. to Kimberly-Clark Corp. cut costs, the lack of jobs will restrain growth.

“This will be another jobless recovery,” said John Silvia, chief economist at Wachovia Corp. in Charlotte, North Carolina. “We may get positive economic growth driven largely by federal spending, but people on the street will say, ‘Where are the jobs?’”

The jobless rate was projected to climb to 9.6 percent from 9.4 percent. Forecasts ranged from 9.3 percent to 9.7 percent. By the end of the year, unemployment will reach 10 percent, according to the median forecast of economists surveyed last month.

The world’s largest economy has lost about 6.5 million jobs since the recession began in December 2007. That’s the biggest drop in any post-World War II economic slump.

Unemployment will “remain painfully high for several more years,” Federal Reserve Bank of San Francisco President Janet Yellen said this week. “I expect that we will turn the growth corner sometime later this year, but I am not optimistic that the economy will spring back to normal any time soon.”

So, where is the stimulus? Stuck in the constipated federal government wasting away. Here is the latest data I have been monitoring on the so called stimulus.

In the first graph there are 4 sets of columns showing: (from left to right) (1) the amount budgeted for stimulus programs, (2) the amount allocated to specific programs, (3) the amount spent creating jobs and (4) the amount unspent from the total budget. (click image to enlarge)

As everyone can see much of the money has not even been assigned to programs (an arduous but legally required process to make sure programs are valid). The second chart translates the dollar amounts for the last three sets of columns into percentages of the budgeted amounts. (click image to enlarge)

Bottom line: 99% of the job-creating money for these departments/agencies is stuck in the government coffers – doing nothing. Here’s the summary across all 6:

  • $105 billion was budgeted across the organizations to start new programs and create jobs (the largest amounts going  to the Departments of Energy and Transportation)
  • Of that, only $22.7 billion as even been allocated to programs to be spent (21.5%)
  • The total amount spent to date on stimulus programs: $0.350 billion has been spent stimulating the economy. A paltry 0.33%.

One could also ask where is the transparency. The stimulus reporting, which was coming out weekly, is now two weeks overdue. Apparently someone doesn’t like the fact we can measure the failure of the Obama-Pelosi-Reid liberal economic experiment week by horrible week. – end update

Well, the unemployment numbers are out and it is no surprise that the failed liberal economic stimulus policy of government funded stimulus is still a shocking failure:

The pace of job losses quickened in June after slowing just a month earlier, casting a shadow over the Obama administration’s attempts to stanch months of declines in the labor market.

The American economy shed 467,000 jobs last month, and the unemployment rate rose to 9.5 percent from 9.4 percent, the Labor Department reported on Thursday.

The failure is emphasized by the number of lost jobs per month (click image to go to larger, interactive graphic):

No stimulus money is coming out of the bloated federal bureaucracy, so no jobs are being created. The actual unemployment is actually closer to %12.8 because the government only counts 75% of the folks on the primary unemployment benefits, those on extended unemployment benefits are not counted (as we noted here). Is it any surprise the job losses jumped 100,000 (33%) in one month? And as I have said many times (all my posts on monitoring the lack of a recovery), this will continue through the summer and well into the fall.

24 responses so far

24 Responses to “Obamanomics Proving To Be An Abysmal Failure”

  1. crosspatch says:

    Looking at that graph, you should notice something … in both graphs unemployment was to continue rising through Q3 and and “without recovery” through Q4.

    So the subtle message in those graphs (which they are attempting to hide by showing a long period of declining unemployment) is that the government fully expected unemployment to continue rising through the end of September of this year … recovery plan or no recovery plan.

    This administration is likely to “recover” the economy to death if it isn’t careful. Doing things like attempting a restructuring of energy production in the middle of a recession by taxing the living daylights out of conventional production and attempting to feed cash into “alternative” production causes great turmoil. The time to do that is in economic boom times, not in the middle of a recession.

    When you increase energy costs you increase the cost of every good and service in the entire economy at a time when people are cutting back on expenses. So just when you need the new technology to “catch” and gain traction you have an environment where people are reducing their demand. It is the worst possible time to try to do that and makes things worse by causing people to cut back even more than they otherwise would. It sets Obama’s energy policy on a course to more certain failure.

    We are led by a group whose idealistic fantasies trump reality. They are living in their own little world where market mechanics are ignored. It is Peter Pan economics where if we all just believe and “send positive vibes” then everything will work out. In the meantime, they are destroying the fertile ground it takes to sprout recovery and making it even more difficult for new businesses to get started and grow.

    Obama should be doing everything in his power to help individuals get into business … not help huge industrial corporations. The economy gets rolling by individuals starting new business. 80% of this country doesn’t work for a large corporation.

  2. WWS says:

    Yeah, Cross, Texas is the place to be. Slowing down a little bit now, but still, that means our unemployment is starting to creep up towards 6% here. (still best in the country) Also, the year over year real estate price decline has only been about 5% as opposed to the 30% drop seen in places like California.

    Oh, and the state still has a budget surplus. And there’s no income tax.

    Know anyone in California with a viable business who actually wants to survive this recession? Tell them to move here.

    Of course many of them already have.

    And whenever oil and gas spike again, which they are guaranteed to do because of the idiotic energy policies of this administration, Texas is going into full time boom mode again.

    Not many people remember that Texas was booming all through the Great Depression. Time for history to repeat.

  3. Frogg says:

    Another good graph:

    Percent job losses iin post WWII recessions


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