American received a pretty grim view of the so-called economic recovery this week. The economy only added 157,000 jobs – not even enough to cover the number of new entrants to the workforce, much less reduce unemployment. Speaking of which, the unemployment rate went up by a tenth of a point to 7.9 percent, a level it has been at or near since September 2012. But the big kicker was the GDP report which showed that for the first time in nearly four years the economy shrunk. Not just grew at a smaller pace. Shrunk.
As they are apt to do, liberal pundits and politicians laid blame at the feet of Republicans. “Congress is applying medieval techniques,” former Obama economic adviser Jared Bernstein wrote, “bleeding the patient while ignoring the indicators bother here and aboard as to how that’s working.”
More specifically, White House press Secretary Jay Carney argued that the Republican threat of sequestration—the automatic spending cuts imposed because Congress could not reach a deal to reduce the deficit—was the primary culprit for the terrible economic numbers.
There’s a couple things wrong with that argument. Not least of which is the fact that it was President Obama’s White House, not Republicans in Congress, who proposed the sequester. As journalist Bob Woodward explains in his book “The Price of Politics,” the sequester was initially the idea of Office of Management and Budget Director Jack Lew and Legislative Director Rob Nabors. That claim has been backed up by multiple fact-checkers.
Regardless of whose idea the sequester was, it’s simply not true that the GDP drop was due to federal spending cuts. The Investors Business Daily explains:
“[W]hile the BEA says defense spending declined in Q4, overall federal spending was up $31 billion compared with Q4 2011 and up $98 billion compared with Q3 2012, according to monthly spending reports out of the Treasury Department.
And even assuming that the “huge cuts” from the sequester go through, spending this year will be about $570 billion higher than in 2008, and will consume 22.4% of GDEP – a level reached only four times in the 63 years before Obama.”
Essentially, the White House is arguing that the economy is so weak that it needs ever-larger doses of government spending just to keep it afloat. Never mind that the $800 billion stimulus package was an utter dud, or the numerous zombie-like programs it has left behind have utterly failed to jumpstart growth, President Obama wants you to believe that more spending is the only answer. He might as well be asking for more cowbell.
The requests for more stimulus, oh I’m sorry, “investment,” is a simple parlor trick to hide the fact that President Obama has completely given up on addressing the broken fundamentals of our economy. Better to slap a billion-dollar-bandaid on the gaping would of our economy than, ya know, stitch it up. As if to symbolize his administration’s increasing apathy to the plight of the private economy, President Obama has decided to let his much-ballyhooed jobs council expire.
Even the left-wing Mother Jones laments its death:
President Barack Obama’s jobs council, a panel formed in January 2011 to gather outside expertise on job creation, is set to expire Thursday. It appears unlikely that the president will renew it for another term, but experts say that the council has been such a loser that its death might actually be a good thing.
The council hasn’t met in over a year (its last meeting was January 17, 2012) and has only met four times since it was created. Last summer, the White House said that the council had not convened in the past several months because the president had “a lot on his plate.” The panel has put out a total of three policy recommendation reports, but that hasn’t translated into much actual movement on jobs.
Given the utter disregard for job creation, is it any wonder that the Democratic Party is calling this “the best-looking contraction in U.S. GDP you’ll ever see?” Is it really that much of a surprise that economic growth continues to stagnate?