Jul 14 2009

Obamanomics: Increasing Unemployment For Months

Published by at 12:38 pm under Measuring The Recovery

Well, finally the President is admitting what everyone else has been saying for months, and that is the liberal stimulus experiment (relying on the sluggish federal bureaucracy to ‘stimulate’ job growth) was a unmitigated failure:

President Barack Obama on Tuesday declined to predict how high unemployment will climb but made clear he expects it to keep worsening for a while as hiring lags behind other signs of economic recovery.

“How employment numbers are going to respond is not year clear,” the president said on a day when he was headed to Michigan, home of a particularly battered economy. “My expectation is that we will probably continue to see unemployment tick up for several months.

Emphasis mine. What can I say that I have not been saying from months? From March 6th of this year:

These indicators are going to be the measure of success or failure for the liberal policies now being touted as helping the economy. One thing should be noted, not even the liberals are promising anything before 2010 – since their spendulus bill will not be implemented for at least a year, or more. The American people were told that the turn around would come if the bill was passed. Now, each month, we can hold the liberal democrats in DC accountable for their promises.

How about from April 22nd:

I know a lot of people think it is way to early to declare the Democrats efforts in DC a total failure, but it really isn’t. Things have been put in motion which cannot be reversed, even if the Democrats were willing to admit their screw ups and try and undo them. The economic forces at work, along with the glacial pace of the Federal Government, are pushing things into a direction that cannot be avoided. The momentum here is immense and unstoppable

The big Democrat mistake was, at its core, believing naive socialist theories that government can out perform the private market. They gambled the government could create jobs faster than the economy could if it was unleashed by tax cuts. It seems Democrats are going to have learn that lesson the hard way, and we are the ones who will feel all the pain (which we will gladly reflect back in the voting booths come next year).

Here’s the problem. A third of this stimulus package money  is stuck in the federal bureaucracy, and the tax refunds are just not doing anything ($13 a week?). The rest is aimed at the safety net money that only helps when you are so far gone financially you need to welfare. The government is stalled. It is just impossible to fathom the Democrats in Congress were ignorant of the snail’s pace of federal acquisition (especially outside the DoD, which due to its mission is nimble and well staffed). It was either historic incompetence or fraud on their part to claim the plan would impact the economy. 

With no stimulus money and shrinking global economies the government revenues are going to continue to fall, the deficits continue to sky rocket. 

As we are now learning, this is all according to plan. There is no stimulus. It is not scheduled to kick in until after Thanksgiving. Can Obama and the Democrats pretend happy through this long summer and into Thanksgiving? Well they can, but they will be only fooling themselves.

We have ‘several more months’ of Obamanomics failing to create jobs. All we can HOPE is we get some CHANGE in 2010.

Update: And as to emphasize what I posted this morning on the high probability this year’s deficit will hit a mind boggling $2.5-2.8 $1.84 trillion, economists are now noting that Obama’s rose colored glasses he used in January are now all fogged up with harsh reality:

President Barack Obama’s economic forecasts for long-term growth are too optimistic, many economists warn, a miscalculation that would mean budget deficits will be much higher than the administration is now acknowledging.

The White House will be forced to confront the disconnect between its original, upbeat predictions and the mainstream consensus about how the economy is likely to perform in a new budget forecast to be unveiled next month.

Christina Romer, chairwoman of the White House’s Council of Economic Advisers, said in a POLITICO interview that the administration — like many independent economists — did not fully anticipate the severity and pace of this recession. She said the White House will be updating its official forecasts.

Yeah, it is much, much worse because the liberals in DC had no clue what they were doing and how their mistakes would play out. Now we have record high unemployment and record high deficits. Could they screw it up any more?

Sure, give them a shot at taxing energy and ‘fixing’ our health care system and they will do to those items what they did to the rest of our economy.

13 responses so far

13 Responses to “Obamanomics: Increasing Unemployment For Months”

  1. crosspatch says:

    Well, one of the reasons the money hasn’t been spent yet is that I imagine it takes a while to print a trillion dollars.

  2. jeffgus says:

    AJ, why do you always focus on how slow the government is to spend the stimulus money? It seems to me it is much more important to point out that the government does not manufacture or create anything. All the government does it take capital out of the market.

    Building infrastructure is what the government (both state and federal) should have been doing all along. The government should do thing to encourage free enterprise, not hinder it. If the deficit is going to be this huge, why not take conservative principles and make a tax holiday? People and companies *keep* the money so it doesn’t get held up (your point) and it keeps capital where is needs to be (the more important point).

  3. ivehadit says:

    Pardon me while I scream:

    Since when is THREE TRILLION dollars NOT ENOUGH to run this country?

    Disgusting waste and corruption that MUST STOP NOW.

  4. kathie says:

    I read that Timmy G. said it will all be over in 2 months, we will start growing, hum………

  5. bobsunshine says:

    Here is some info from BizBlogger:

    Bush’s plan passed in April 2003 while Obama’s passed in February 2009. I chose the S&P 500 Index starting point one month prior to passage because the market typically discounts the information beforehand as the bills work their way through Congress. I chose 6 months-post passage as the ending point because that’s all the data we have for Obama’s plan so far.

    Bush: From March 2003 to October 2003, the S&P 500 went from 835 to 1034 or +23.8%.

    Obama: From January 2009 through July 2009, the S&P went from 932 to 879 or -5.2%.

    By way of comparison, I also reviewed the market returns a full year prior to these time periods and the results show a very similar situation.

    The S&P 500 return under Bush 1-year prior was -26.2%, hurt by the internet bubble collapse, 9/11 and corporate scandals. Trillions of dollars in lost wealth.

    The S&P 500 return under Obama 1-year prior was -35.9%, hurt by the housing bubble collapse. Also trillions of dollars in lost wealth.

    Both presidents had very similar economic challenges, but the difference in market confidence inspired by the two stimulus plans couldn’t be more stark. The market discounted that Bush’s plans would return the economy to strong growth, while the market is discounting that Obama’s plans will do nothing or even harm the economy’s growth. I challenge people to offer an explanation other than what the market has already told us. It’s time for Democrats to abandon their tax-and-spend approach and return to a plan that actually rebuilds individual wealth and business confidence.


  6. kathie says:

    I’ll give it a try. The Dems don’t want to build wealth, they want to redistribute it, and that is exactly what they are doing. Even when the shovel ready projects get going, only unions and those hard to employ will be able to get the jobs. They will get half of the work done for a pile of money. The next problem is that this stimulus will be finished, none of the projects are on going, it’s a 2 year deal. No states are in a position to continue any projects started by the stimulus.

    Nationalized Health care will take a pile of money out of the economy, that could have gone to build businesses, employ people. Cap and Trade will take even more and tax everybody and everything that moves or uses power. Both of these plans are big job and economy killers. Even T. Boone Pickens has shelved the wind mills he had made, too expensive to use, no way to get electricity from A to B.

    I have to ask, if I can figure it out, why can’t Obama? I’ve come to the conclusion that his words are a big lie. His intention is not to stimulate, or employ but to reorder the fundamentals of our institutions and wealth. In theory, many have thought society could be made equal, in reality, human nature is what it is, not always willing to go along with the program.

  7. crosspatch says:

    Venture capital is tanking in Silicon Valley. This is going to impact more than just new initial startups. Many companies rely on follow-on rounds of venture capital to grow their infrastructure if the initial round produces a successful product. Twitter is a good example. They just closed their third round of financing this May for $15 million. Good thing they got it in May … venture funding fell off a cliff in June and July.

    There are going to be a lot of successful but not yet public tech ventures that bite the dust and almost no new ones for a while.

  8. crosspatch says:

    Remember folks. Bush began warning Congress in 2001 about the potential mess we find ourselves in right now.

  9. crosspatch says:

    Oops, apparently messed up the link in the above.

  10. crosspatch says:

    Pretty much guaranteed to destroy the economy. The Democrats are past idiocy and I believe are malicious.

  11. partypup says:

    Totally off topic, but AJ – have you seen THIS?

    “Obama birth certificate deniers won a small victory in court on Monday. Meanwhile, one such conspiracy theorist refused to deploy to Afghanistan on the grounds that Barack Obama isn’t a legitimate president.

    A judge said he would listen to “the merits” of Alan Keyes’ case challenging Obama’s presidency. While a spokesman for the U.S. Attorney’s Office said the move was merely procedural, birth conspiracy proponents are encouraged.”


    I love how an Army Major is now dubbed a “conspiracy theorist”. Hilarious! But notice what they don’t mention: the military actually rescinded the order rather than address the matter. This omission is telling and significant, and we have to reach beyond the Huff Post to get the truth:

    “His attorney, Orly Taitz, confirmed to WND the military has rescinded his impending deployment orders.

    “We won! We won before we even arrived,” she said with excitement. “It means that the military has nothing to show for Obama. It means that the military has directly responded by saying Obama is illegitimate – and they cannot fight it. Therefore, they are revoking the order!”

    She continued, “They just said, ‘Order revoked.’ No explanation. No reasons – just revoked.”

    “Taitz said she will attend the hearing to amend the temporary restraining order to an injunction because MORE members of the military have joined the cause.


    Now, I’m curious why the military would rescind orders to a Major (not a colonel or a General, by the way) rather than deal with this issue…? It doesn’t really matter, because now the cat is out of the bag, and it is starting to hiss.

    Think about it: Bush was a de facto “selected” (not elected) president, and that fraud had two terms in office. But the difference here is that the military never revoked any deployment orders under Bush because of questions about his illegitimate presidency – even when he was doing whack things like sending troops to war for no reason. This situation now is different, because for whatever reason the military is not willing to simply accept Obama’s legitimacy because he won and he’s sitting in the Oval Office. We’ve never faced a situation like this before. It would appear to me that the situation in the U.S. just became much more dangerous and unpredictable because, with this case, the mask is off.

    Ask yourself: what’s to stop tens of thousands of military personnel from obtaining the exact same outcome as Major Stefan Cook? Not much, apparently. And where will that lead? The military either has to (a) deal with the issue (something civilian courts have refused to do because everyone except Obama apparently lacks standing) or (b) risk scattered revolts popping up in their ranks. Very dicey. Oh, and all this as our country is dealing with a collapsing economy and power plays for resources by Russia and China – who actually have more money than we do to continue to fund their military enterprises.

    I remember discussing this issue with a colleague last year. He kept insisting that the birth certificate issue should be dropped and that people need to just “get over it” because Obama was going to win, anyway. I told him that wasn’t the point. The point was that we needed closure on this issue – because if it just sits and festers, especially as the economy continues to nosedive – people will be looking for reasons to blame and targets to hit. I knew that whoever ended up in the White House in 2010 was going to need as much support from the rank and file as they can possibly get.

    But apparently the power brokers in this country like to push every awkward question or inconvenient truth off into the future – until it becomes a problem. This is how we’ve ended up with the albatross of debt around our necks, and now they’ve done it again with Obama’s birth certificate. Oh, well. Our new president has got a failed stimulus, a collapsing economy, diving poll numbers and a feisty military asking uncomfortable questions.

    Maybe next time people will think more carefully and ask more questions before they skip to the ballot box with their Kool Aid.

    It’s going to be an interesting Fall.

  12. KauaiBoy says:

    Good points bobsunshine and if you take the stock charts back before Sept 2001 and observe the post 9/11 crash and recovery and compare that to the crash that began when it became likely Obama would be elected (more so than the housing and credit problems impact IMHO), one can see the market pyschology at work. What is remarkable about the recovery during the Bush admin was that we were facing threats which were unprecedented in our history (thus with more uncertainities in the outcome) versus the current economic downturn (which is something that has and will occur again). The market reflects sentiment about the future and trusted Bush’s approach while properly discounting the socialist approach currently being force fed on us. Plus the market recognizes that this admin is completely clueless and like they say “The fish stinks from the head”.