PrintAugust 16, 2010
Surprise! Economic Numbers Are 'Worse Than Expected'
The current government employment report is just the most recent example of bad news for the economy, expressed in depressing unemployment figures that the wizards in the Washington constantly find either "surprising" or "unexpected." Apparently, a critical member of Barack Obama's economic team, Christina Romer, has been surprised (if not ambushed) once too often by economic reality. Romer, Chairwoman of the Council of Economic Advisors, announced that she was heading back to the UC Berkeley economics department.
Dr. Romer was wrong about every macroeconomic consequence of the $862-billion stimulus she touted. She was wrong about the depth of the recession. And she was wrong in her prediction that if the stimulus were enacted, unemployment would never exceed 8%. Unfortunately, we are now at 9.5%, and much deeper in debt. The massive stimulus program, a centerpiece of the Obama economic plan, was the just the first in a long line of unread, thousand-page bills produced by leftist dreamers.
Failed academic/government economists like Christina Romer, with no private industry experience whatever, surround our equally academic, reality-challenged president in creating an impenetrable echo chamber of centrally planned government dysfunction. They're all surprised by how their theories fail in the real world because few of them have ever worked in the private economy, and none of them have a clue how government intrusion in the marketplace burdens the entrepreneur.
The likes of Romer wake up in the morning refreshed and excited about changing the Keynesian multiplier in their faulty stimulus models from 1.3 to1.4. They don't wake up in the middle of the night worried about the next order cancellation, the badly needed hardware upgrade that might be deferred, or the current software support contract likely to be renegotiated and downscaled. They have no customers who suffer under the weight of new taxes, debt, regulation, and uncertainty about the decaying economic environment and are therefore more inclined to hoard rather than spend their precious corporate cash.
Obama and his advisors and supporters have been playing in the most radical leftist sandbox in American history, and they have only depression-like unemployment to show for it. There is outright dissent everywhere, with many even on the left openly talking about the likelihood of a double-dip recession. Paul Krugman, the preferred socialist economist of the moment, wants another dose of stimulus, and Robert Reich is even calling for a depression-era reprieve of the WPA. Reich has given up offering up his thoughts about creating shovel-ready jobs; now he wants to actually distribute shovels.
All of this misery must come as a shock for our Washington policymakers. For those who work in Washington and live in its suburbs -- home to most of the wealthiest counties in America -- these must seem like the fattest of times. In the world of government functionaries, jobs are plentiful, houses retain their value, and unemployment is low. In the real economy, where the ruled class struggles, exactly the opposite situation prevails.
The left is beginning to fray as more of their grand programs fail while growing increasingly unpopular. Could George W. Bush have caused everything to go awry? Their desperation recalls Ayn Rand's description of how the excuses for failed socialist policies eventually come to resemble "inarticulate sounds of panic."
In July, government economists expected 90,000-100,000 private jobs to be created. Only 70,000 jobs appeared, and June's numbers were revised downward. Even the past surprises them. But Obama seems satisfied with these results, and he says that you should never expect a recovery to move in a straight line. He seems satisfied that over 3 million additional jobs have evaporated during his eighteen-month rule. And Timothy Geithner at Treasury seems satisfied, too; for him, private job growth is "pretty good."
The political class in Washington are tone-deaf to this economic unraveling because in their universe, not parallel to ours, government civil servants receive two times the compensation of their equivalents in the private economy. At no level, federal or state, are government workers ever fired. And should public-sector jobs ever become threatened by economic downturns, our Congress will convene to rescue them. Pelosi and Reid found another $26 billion for public unions -- solid, Democrat-voting blocs with highly compensated members.
Other toxic economic reports not directly associated with unemployment are looming. Gross domestic product for Q2 will be revised downward to near recession levels. Our June trade gap ballooned "unexpectedly" to $49 billion from an estimated $42 billion, the largest monthly increase in history. In an admission that our feeble economic recovery has stalled, Bernanke's Federal Reserve has announced another round of quantitative easing. Along with our deficit, it seems that the Feds' balance sheet will stay bloated forever.
There are also unprecedented levels of teen unemployment and home foreclosure rates that remain stubbornly high. The economic news that prevails is not just bad -- it is almost apocalyptic.
Most of us on the right are not surprised by any of this; we expected it. We are shocked merely at how rapidly the economic Armageddon has come down upon us. We looked at Obama's past, his associations, his inexperience, and his megalomania and knew that the danger he posed to America was existential. We expect to survive, but we'll be surprised if we recognize the country afterward.
Claude can be reached at csandroff@gmail.com.
