It is inappropriate to blame a President for generalities and/or items not under his control, it is appropriate to look at controllable specifics. Is he doing what is good for the nation?
______________________________________________________________________________
BOTTOMLINE
OVERALL ASSESSMENT
Performance on doable items: Poor, weak
Obama is attacking the wrong things, rather than attacking the key causes to get true gains.
SPECIFIC FACTORS
Antibusiness, anti-rich behavior - Fat cats, blame, fair share for rich, the 1%, unfriendly business climate
Business burdening legislation: The worst ever for a President, and the worst is yet to come: the health care burdens. The cost of overregulation is compounding exponentially
Biggest: Health Care Bill (taxes rise on above $250,000 by 4%.
Dodd-Frank 2400 page bill "the most significant regulatory overhaul since the New Deal
Not addressed biggest issues: The President still has not addressed the current biggest problem: Over $35 trillion in already incurred unfunded liabilities for social security and Medicare (no company could get away with that) - nor the debt really.
Trade reluctance
Promises not line up with actions:
I will double exports - yet held up three Bush era trade deals for three year(!!!!)
Huge profits held overseas
Nothing has been done on repatriation of corporate profits, lowering our absurdly high corporate taxes or shifting our educational system to train Americans for the 3.4 million jobs that are open. , jobs for engineers, technicians and skilled machine operators go unfilled.
Federal Deficit, Spending Jumps $1 trillion - The federal deficit is dramatically higher than in previous recessions...over 9% compared to worst of about 5%.
Idea of making America into europe
__________________________________________________________________________
Unemployment (official) 8.2% (Lots of workers have dropped out, so not included in this)
Real unemployment, adjusted, 11.3%?
Dropped out of work force, so not counted as unemployed or in the workforce
Underemployment: 15.1% (Includes part-time where wanted full-time or forced to take lower job)
% of GDP DOLLARS
Rev Outlay Deficit GDP Rev Difference
1951 16.1% 14.2% 1.9% .339 Tr
2007 18.5 19.6 1.1 14.0 2.6
2010 15.1 24.1 9.0 14.6 2.2 -.4
The revenue drop from 2007 to 2010 was $0.4 trillion out of the total deficit of $1.2 tr.
Real GDP is growing, but weakly compared with the postwar average recovery.
The economy 11 quarters after a recession begins is 8.6% larger.
Underemployment is 15.1%, a severe number.
The federal deficit is dramatically higher than in previous recessions...over 9% compared to worst of about 5%
____________________________________________________________________________
Indeed, more and more business leaders are speaking out against the president. The dam broke in mid-2010 when then-Business Roundtable Chairman and Verizon CEO Ivan Seidenberg said that the Obama administration was creating "an increasingly hostile environment for investment and job creation."
Earlier this year, Steve Wynn, the billionaire head of Wynn Resorts and a Democrat, said that "the business community in this country is frightened to death of the weird political philosophy of the President of the United States."
Now public criticism is common. Just this month a poll in Chief Executive magazine concluded that 85 percent of CEOs rank Obama's performance as "weak" or "poor," with one CEO saying, "The current administration is so anti-business, we don't plan on any expansion until we have a new president. We just hope we'll be around to see that day."
____________________________________________________________________________
SIGNIFICANT IMPEDENCE
The Heritage report found that Obama has outdone his predecessors in that "no other president has burdened businesses and individuals with a higher number and larger cost of regulations in a comparable time period."
The administration’s activist first two years have created a climate of deep uncertainty for private businesses that can’t predict which new regulation or mandate will be imposed or when. So, they hold back from the kind of ventures that would require creating new jobs.
And the worst is yet to come when you look at the job-killing, business-quelling regulations under Obamacare's 159 new government offices and programs, the EPA's seven new environmental regulations that will cost businesses $38 billion annually, in addition to compliance costs of $100 billion, and the 2400-page Dodd-Frank bill the Harvard Business Law Review cites as "the most significant regulatory overhaul since the New Deal."
The cost of overregulation is compounding exponentially, and in the process, is destroying the Land of Opportunity, dream by dream.
RESULTS MUST MATCH RHETORIC
Results must match rhetoric. President Obama excited the business community when he promised to double exports in five years. Yet it took almost three years to simply get three Bush-era trade deals signed and no other deals have been made to promote exports and trade.
Nothing has been done on repatriation of corporate profits, lowering our absurdly high corporate taxes or shifting our educational system to train Americans for the 3.4 million jobs that are open. While college-educated, liberal arts majors protest in American cities, jobs for engineers, technicians and skilled machine operators go unfilled.
EXCEPTIONALL SLOW RECOVERY, DESPITE...
Our current recession recovery is very slow. (GDP Picture)
Most recoveries are dramatically faster.
So why isn't this one, though it has had the biggest stimulus in history? (Huge deficits are stimulative, since more is spent, even though borrowed.) Plus a number of other stimuluses since then.
FACTORS FOR RECOVERY
First, fiscal policy actions are neutral for 2011.
Second, state and local sectors will continue to be a drag on the economy and labor markets in 2011.
Third, Quantitative Easing round 2 (QE2) will likely produce only a slight economic benefit as the Fed continues to encourage additional leverage in an already over-indebted economy.
Fourth, while consumers boosted economic growth in the second half of 2010 by sharply reducing their personal saving rate, such actions are not sustainable.
Fifth, expanding inventory investment, the main driver of economic growth since the end of the recession in mid-2009, will be absent in 2011.
Sixth, housing will continue to be a persistent drag on growth.
Seventh, external economic conditions are likely to retard U.S. exports.
YES, A RESILIENT AMERICAN ECONOMY IS NATURAL
First, they tell us not to bet against the resilience of the American economy.
We agree.
Households are itching to spend.
Nonfinancial firms have an enormous pile of cash on their balance sheets.
New home construction has shrunk to the point where it no longer poses a meaningful drag on growth.
However, as much as households want to spend, they are constrained by their balance sheets, which have not benefited from wealth creation in recent years.
Firms can fund spending, but they have to have a reasonable expectation of an increase in final sales to have a reason to spend.
A shrinking construction sector may no longer be a drag on overall growth, but home prices are still dropping, terms and standards on mortgage lending are tight, and there are still too many vacant homes.
Every time our optimism flutters up from there, a quick reflection on politics shoots it down. And then we enter election season. In Europe, officials have to cope with an unfolding sovereign and banking crises.
And, yes, we would have been in a deeper hole without the (Bush) financial stabilization and (Obama) fiscal stimulus policies enacted in late 2008 and early 2009. But the latter was hurried and inept, so it was less effective, incurring borrowing for funds not well spent.
THE UNEMPLOYMENT RATE - SOMETHING DOESN'T MAKE SENSE HERE
Again, the workforce has been dropping at the same time as the unemployment rate.
Why?
Most likely because increasing numbers of workers are discouraged by the absence of jobs, dropping out altogether.
"If this weren’t happening, the current unemployment rate would be closer to 11.3 percent, Davies argues."
All told, there are about 4.8 million people who appear to fit the above description. Unless jobs appear for those people, Davies warns, their status, not participating in the workforce, could become permanent, or at least long-term, which could mean a 2 percent loss to the GDP. Not good for them or the rest of the nation.
DIFFICULT CHOICES, UNFUNDED SOCIAL SECURITY AND MEDICARE
Everyone knows by now that the US is facing difficult choices. Depending on what assumptions you use, the unfunded liabilities of Social Security and Medicare are between $50 trillion and $80 trillion and rising. It really doesn't matter about the exact number, as there is no way that much money can be found, given the current system, even under the best of assumptions. Things not only must change, they will change. Either we will make the difficult choices or those changes will be forced by the market. And the longer we put off the difficult choices, the more painful the consequences.
NORMALLY WE SHOULD HAVE STRONGER THAN AVERAGE GROWTH BUT WE DON'T
Because of the depth of the recent recession, one might expect stronger-than-average improvement in industrial production, as we are starting with a smaller base and only one direction to go.
Despite the predicted snap-back, the increase in industrial production during this recovery is actually slightly slower than in the average postwar case.
Capacity in manufacturing, mining, and electric and gas utilities usually grows steadily from the start of a recovery. However, during the current recovery, investment has been so low that capacity is actually declining. Plants and machinery are depreciating faster than they are being installed.
There is no question that small businesses are still being choked by the unavailability of credit and that the lack of job creation is preventing a real economic recovery,
AN ACTUAL STORY - REGULATION AND RED TAPE
"Awhile back, my brother Pete decided to chase his version of the American dream. He did his homework; purchased quality used equipment via the internet, and signed a lease - in hopes of opening a small mom and pop style yogurt shop near Charleston, S.C. He's a smart businessman, who tries to calculate his decisions carefully. Nonetheless, it wasn't long before he found himself tangled in a web of regulatory red tape. He was told he needed to purchase environmentally friendly grease trap equipment, although no frying is involved in serving non-fat yogurt. It didn't stop there. Additional environmental requirements like the installation of specialized wastewater drains, and tens of thousands of dollars for more unessential equipment left him watching his hopes of the American dream go down the drain, along with any hopes of hiring new people should his business succeed."
