WASHINGTON – The Obama economy virtually stopped growing in the first three months of 2015 in another bleak sign of its persistent weakness over the last six years.
The Commerce Department’s report that the economic growth rate barely rose by a minuscule 0.2 percent in the first quarter was much worse than the 1 percent rise most forecasters expected.
Economic writers struggled to come up with the right words to describe the economy’s sluggishness, including “slowed to a crawl” or “slowed nearly to a halt.”
How about was barely breathing?
“The U.S. economy stumbled badly,” Scott Anderson, senior vice president and chief economist at the Bank of the West in San Francisco told the New York Times.
Weak growth in the last three months of 2014, which slowed to a lackluster 2.2 percent rate, “turned into virtually no growth in the first quarter of 2015,” he said.
The economy’s uneven, subpar performance has been the hallmark of Barack Obama’s presidency, though he still insists it is much improved under his policies.
But for the entirety of 2014, the economy grew at a 2.4 percent rate, well below quarterly growth levels of 5 to 8.5 percent in the 1980s.
“In this century, economic growth has averaged 1.9 percent per year — down from the 3.4 percent of the prior two decades,” says University of Maryland economist Peter Morici.
Anemic growth rates under this administration’s policies is “squeezing wages, the middle class and working poor,” Morici says in a recent analysis titled “Why America Doesn’t Grow.”
One of the major weaknesses in the Obama economy has been plunging investment in business expansion and new start up enterprises that would fuel new job creation, incomes and growth.
Before 2000, small businesses were creating more jobs than big corporations in a surge of capital investment. But that isn’t happening under an administration that’s raised taxes on capital and, in the process, drove it out of the economy.
The result, Morici writes, is that the number of new entrepreneurs “has fallen off and new business start-ups — incubators for the next generation of Apples and Googles — are down overall.”
Obama and his shameless apologists in the news media are blaming the economy’s paralysis on the harsh winter weather.
But that threadbare excuse needs to be taken with a very large dose of skepticism.
The “tie between weather and economic performance is over overstated, according to the small number of experts who’ve searched for a correlation,” says economic analyst Chico Harlan in the Washington Post’s Wonkblog.
“In the coldest January-March period of the last 30 years (1985), the gross domestic product in the same time went up by 4.0 percent,” Harlan reported.
“In the snowiest period (1998), growth was 4.0 percent as well. In the least snowy quarter (1988), GDP grew by 2.3 percent. In the second least-snowy quarter (2009), the GDP shrank by 5.4 percent,” he writes.
A recent analysis by researchers at the Federal Reserve Bank of Chicago “concluded that the effect of weather ‘is not very large,'” Harlan writes.
Other factors play a bigger role in how the economy performs quarter after quarter, year after year.
Chief among them are the government’s fiscal policies, including anti-investment, anti-growth tax rates, mounting deficit-spending and debt, pro-job creation trade policies, or the lack thereof, and economic confidence that unlocks risk-taking, pro-growth business capital.
It should come as no surprise to anyone, except those in the White House, that Americans worry most about the economy and finding a job, according to just about every poll that’s been taken since Obama was sworn into office.
But the president still lives in a delusional dream world where he believes he has rescued the U.S. economy and pulled it firmly out of its recession.
Yet six years and four months into this presidency, the economy had significantly slowed in the fourth quarter of 2014, and has all but stopped growing in the first quarter.
Symptoms of our long-lingering economic illness are all around us. Wages remain essentially flat. Retail sales are anemic and consumer spending is “tepid.”
New home sales plunged 11.4 percent in March, and existing home sales were weak. Durable goods factory orders have declined in recent months.
The unemployment rates in 15 states, plus the District of Columbia, including some of the most populated, range between 6 and 7.7 percent.
But millions of frustrated jobless workers who’ve given up looking for full-time work are not counted among the unemployed. That’s why the nation’s workforce has shrunk to recessionary levels, with only 44 percent of adult-aged workers on the nation’s payrolls.
And millions more are in part-time jobs when they want and need full-time employment.
The Gallup Poll’s daily tracking surveys puts the number of underemployed Americans at nearly 15 percent of the labor force.
“This economy is still showing a lot of fragility,” says Diane Swonk, chief economist at Mesirow Financial.
The Federal Reserve Board thinks so, too. That’s why economists now say they’re unlikely to raise interest rates anytime soon until they see improvement in the economy.
America can do better than this with the right leadership and sensible pro-jobs, economic growth policies
That means reforming a dysfunctional tax code, cutting tax rates to unlock investment in new businesses, opening new export markets for our products, and putting our nation’s fiscal house in order.
We’ve tried Obama’s failed snake-oil remedies. Now it’s time to return to policies of growth and renewal that once made our economy the beacon of hope and opportunity around the world.