The June, 2011 job figures showed very weak job creation and the unemployment rate is now at 9.2%. Another, more comprehensive measure (called U6) is now at 16.2%.
There are two axioms about the President and the economy. First, the public holds the incumbent accountable for the economy. Second, the economy is not something the President can control.
A 9.2 unemployment rate, if it continues until the middle of 2012, would very likely make Mr. Obama a one-term President. Some would say that is not fair because there are many things out of his control which are hurting the economy.
To some extent, I agree. The changes and possible crises in the Middle East are not in his control. He is not to blame for the possible implosion of the Euro-zone countries and the Euro, even though the effect on global finances would be dramatic.
But, despite his constant talk about a laser-like focus on jobs, it is apparent that Mr. Obama and his team came to office with goals and plans and would not let them be changed by the realities of the economy. In this administration’s policies and actions, there has been virtually nothing which helps job creation and many things which harm it.
“‘Uncertainty is seen to retard investment independently of considerations of risk or expected return. Introduction of uncertainty can be associated with slack investment, resolution of uncertainty with an investment boom.
Whatever their possible future value, Obama’s two legislative accomplishments, Health Care (“Obama-care“) and Financial Regulation (Dodd-Frank), have created a huge degree of uncertainty. These bills are massive and will require extensive rule-writing by the federal agencies. That rule writing will take years and the uncertainty will remain while they are being written.
Employers don’t know what is going to happen with their health care costs. The changes in financial regulation will have an impact on loans to companies and the ability of consumers to get loans to finance purchases. Until these uncertainties are resolved, investors and companies don’t know the costs of the production or the likelihood of sales. Rational companies and investors will sit on the sidelines until the answers are clearer.
Obama’s convictions and beliefs are also hurting employment. He is adamantly opposed to coal. In a meeting with the San Francisco Chronicle he said…
So if somebody wants to build a coal-powered plant, they can; it’s just that it will bankrupt them because they’re going to be charged a huge sum for all that greenhouse gas that’s being emitted.
So if somebody wants to build a coal-powered plant, they can.
It’s just that it will bankrupt them.
This is not a strategy which helps employment, and the overwhelmingly Democratic congress in Obama’s first two years refused to pass “Cap and Trade“. But that is apparently not going to stop this administration.
Since Cap and Trade couldn’t get through Congress, the EPA has written a rule that will:
- Cause the early closure of coal plants (costing jobs)
- Raise energy costs for every consumer and reduce their discretionary funds for other purchases (restaurants, vacations, etc.)
- Raise the cost of energy for companies and cause more jobs to be sent overseas
- Reduce or eliminate coal industry jobs (great for West Virginia)
One would think that when unemployment is a major problem, we might delay or minimize rules that will hurt the economy, but agendas apparently come first for this administration.
Mr. Obama and his team came to power with a set of large ideas. They would have been well suited for a country “feeling its oats” and confident about the future. This was last seen in the United States in the mid-1960’s and Lyndon Johnson used that feeling to push through his “Great Society” plans.
Sadly, for Mr. Obama and the nation, he came to the Presidency at a moment when the economy was shaky and everyone was pulling back on spending. The biggest concern was the economy and jobs. Yet, he pushed through programs and rulings which will cause problems for the economy when we can’t afford it.
It would seem that as far as jobs and the economy goes, Mr. Obama is the wrong President at the wrong time.