Links and thoughts on Obamanomics

Here’s a video comparing and contrasting the media’s economic reporting during the Bush administration with their approach now that their man is in the White House:

The creator of that video writes,

By the middle of 2003, a mild recession had ended and the economy turned around big-time, with the creation of hundreds of thousands of new jobs and whopping GDP growth of 7.5% in the third quarter. Yet month after month, the national media downplayed the good economic news with the dreaded “but,” as in “Positive economic indicator X was released today, but the economy is still in the toilet . . .” (Oh, by the way . . . George W. Bush was President back then.)

Of course, with President Obama now in the White House, the media’s economic coverage is the mirror opposite. As the unemployment rate skyrockets and hundreds of thousands of jobs are lost every month, the bad economic news is spun by Obama’s friends in the media: “Negative economic indicator Y was released today, but it’s not nearly bad as we’d expected, and besides,unemployment can be fun!”

But hey, at least the Pelosi/Obama super-duper extra-special economic stimulus package has softened the blow, right? At least job losses aren’t as bad as projected, right? . . . Well, actually, it hasn’t worked out that way:

All in all, I’d say that’s not exactly the recovery we were promised. I know Newsweek called Barack Obama our first Vulcan president, but offhand, I’d say the media coverage of his economic policy is more likely the result of a few Jedi mind tricks. As Randall Hoven says, I think it’s about time to call this “the Obama recession.” (HT: Shane Vander Hart) Most people aren’t to that point yet, but The Nation is now predicting that if and when the official unemployment rate goes above 10%, they will be.

When the federal government actually acknowledges that the country has a double-digit unemployment rate, when a figure that is above 10 percent becomes that official number—something that the trend lines suggest could happen this summer—the country reaches an emotional and political tipping point. . . .

Politically, it is the point at which people start looking for someone to blame. . . .

If the country is socked with a double-digit unemployment rate, and if the actions of the administration that is in charge are seen as feeding the increase in joblessness, that’s the political point of no return.

Of course, we’d be at that point (and beyond it) already if it weren’t for the way the government calculates things, since as John Nichols points out in that article, the real number is a lot worse than the official one:

America already has double-digit unemployment.

In fact, the real unemployment rate, as opposed to the official rate, is well over 15 percent.

That’s because the official unemployment rate—which as of Friday stood at 9.4 percent, following another leap in jobless claims for May—is not, as economist John Williams has noted, “figured in the way that that the average person thinks of unemployment, meaning figured the way it was estimated back during the Great Depression.”

What happens when we include people who have stopped looking for work because they do not believe there are jobs to be found, along with part-time workers who would like to be working full-time?

Then, we start looking not at the unsettling 10 percent figure but the far more frightening 20 percent number.

Ed Morrissey gives Nichols “high marks for intellectual honesty” in coming right out and saying this;

Normally, the Left likes to trot that out during Republican administrations and leave it in the barn during Democratic presidencies.

Morrissey agrees with Nichols’ conclusion even as he rejects his prescriptions:

Even if we wildly disagree on economics, we agree that Obama will own this unemployment cycle, and soon. The 10% mark is a psychological barrier that Obama simply cannot avoid. Even without it, blaming Bush has a shelf life whose expiration date is rapidly approaching. Bush didn’t spend trillions of dollars in 2009 and promise that it would create “or save” jobs. Voters will get tired of hearing how many jobs Obama thinks he’s “saved” while unemployment continues to rise.

Obama has been in charge for almost five months and got every single bit of economic policy he wanted from Congress. If the economy remains mired and debt keeps skyrocketing, people will start to ask what they got for all of their great-grandchildren’s money.

This will only be exacerbated if the president gets his way, since he’s pushing a change to our nation’s tax structure that will drive more jobs overseas. Don’t believe me? Maybe you’ll believe Steve Ballmer, who ought to know:

Last week, Microsoft Chief Executive Officer Steve Ballmer came to Washington to announce what Microsoft would do if Obama’s multinational tax policy is enacted.

“It makes U.S. jobs more expensive,” Ballmer said, “We’re better off taking lots of people and moving them out of the U.S.” If Microsoft, perhaps our most competitive company, has to abandon the U.S. in order to continue to thrive, who exactly is going to stay?

In surveying the issue—President Obama’s proposal to end the deferral of multinational taxation—Kevin Hassett (a former advisor to the McCain campaign) asks,

Why does Obama advocate a policy that so flies in the face of everything that economists have learned? How could Obama possibly say, as he did last month, that he wants “to see our companies remain the most competitive in the world. But the way to make sure that happens is not to reward our companies for moving jobs off our shores or transferring profits to overseas tax havens?” Further, how could Treasury Secretary Tim Geithner call a practice that top scholarship has shown increases wages and employment in the U.S. “indefensible?”

I have to admit I am at a loss. Maybe it is good politics to bash American corporations, and Obama isn’t really serious about making this change happen. But if the change is enacted, and domestic corporate taxes aren’t reduced to offset the big tax hike, the result will be a flight from the U.S. that rivals in scale the greatest avian arctic migrations.

Incidentally, that scholarship includes “the same James Hines who recently wrote a sweeping review of international tax policy with Obama’s top economist, Larry Summers,” so the president’s economic team has to be well aware of what the unintended consequences of his proposal would be.

I’ve said this before, I think, that the great flaw in leftist economic theory is that it assumes that people’s economic behavior doesn’t change when tax laws change—and that’s just not true. Make something more expensive, people will buy less of it; make doing business in your jurisdiction more expensive, people will go where it’s cheaper. The Left understands this when it comes to things like tobacco and gasoline, which is why they’re all for higher taxes on both and were unbothered by last summer’s $4-a-gallon gas, but when it comes to taxes, they just don’t seem to be able to see it.

This is particularly problematic since the richer a person is, or a company is, the more they can do to avoid paying taxes if taxes are high enough to make it worth the effort. The more you raise taxes, the more the elite dodge them, and the more the burden falls on the middle class and below; the result is a tax structure which is functionally much more regressive and unfair, regardless of how it appears on the surface. Throw in the fact that under such circumstances, the folks who have the money are much less likely to use it to create jobs in this country, meaning less growth and less money in the economy, and most people get hit coming and going. We’re already seeing that under this administration; from where I sit, I think the economy’s likely to recover somewhat anyway, but the recovery will be weaker and slower and less complete because of this administration’s actions and policies.

And if, as I’m still very much afraid, al’Qaeda pulls off another major attack in the middle of all this, all bets are off.