Yesterday, 22 October 2018, President Obama was campaigning for the Democrats in Nevada. The highlight of his speech was widely broadcast on the evening news. The subject was economics.
Obama’s statement began with that smile (maybe a smirk) and a little hesitation that silently broadcast to the audience……..what I am about to say is so obvious that it goes without saying, but I will tell you anyway…..then he continued in that condescending tone, ” ……when you hear all of his (President Trump’s) talk about economic miracles right now, remember who started it.” Obama has made this same point several times over the past six months.
To put Obama’s statement in perspective, maybe a little stroll down memory lane is in order. Some of us remember the 1960 presidential campaign, Kennedy vs Nixon. Three major issues in the campaign: 1) for the past eight years Eisenhower had been a very popular republican president. 2) Across all the parties people were asking, what will happen to the country if we elect a president who is catholic (yes, for you youngsters, that was a major issue). 3) The economy.
Since the 1958 recession, the economy had been very sluggish and unemployment remained perilously high, 6.8%. JFK’s Council of Economic Advisers urged him to attack unemployment with a tax-and-spend strategy (sound familiar?). In 1963, declaring that the absence of recession is not tantamount to economic growth, President Kennedy proposed to cut income taxes. JFK’s message to the American people was that lowering taxes was the surest path to full employment and economic growth.
President Kennedy was correct and from 1961 until his death in 1963, he led a democratic party dramatically different from today’s version.
Now, let’s fast forward to the 1980 presidential election, Carter vs Reagan. President Carter had made a mess of the economy and people were suffering with 12.5% inflation and a prime interest rate of about 20%. Candidate Reagan ran on a pledge to cut taxes and fix the economy. He did cut taxes and it was the beginning of a significant economic upturn.
Apparently, that short history lesson on the impact tax cutting can have on a recession recovery was lost on President Obama. Another thing lost on him was the fact that in modern economics no country has worked its way out of a recession with a tax-and-spend economic strategy.
Now back to President Obama and his claim that today’s booming economy is because he got it all started. Perhaps he has had a lapse of memory because of what he said just a couple years ago while nearing the end of his presidency.
May, 2016, Carrier Company announced they were moving manufacturing to Mexico and Indianapolis was going to lose 1000 jobs.
During a June 1st PBS town hall event, Obama responded to a Carrier employee who complained about the fact that jobs were leaving Indianapolis. Obama: “When somebody says, like the person you just mentioned (Trump) who I’m not going to advertise for, that he’s going to bring all these jobs back, well how exactly are you going to do that? What are you going to do?” said Obama. “There’s — there’s no answer to it. He just says, “Well, I’m going to negotiate a better deal.” Well, how — what — how exactly are you going to negotiate that? What magic wand do you have? And usually, the answer is he doesn’t have an answer.”
That statement was a clear attempt by Obama to argue that Trump’s vow to keep jobs in the United States was an empty campaign promise and impossible to achieve.
As the New York Times later reported, “….before Trump even takes office, he has already convinced Carrier to stop 1,000 jobs being moved out of Indiana to Mexico after a deal was struck with the company.”
It has become clear that President Obama did not have the skills to conduct that kind of negotiation and to do the things that needed to be done to kick-start the economy, a tax cut for example.
Just to put a final point on how ludicrous Obama’s statement in Nevada yesterday was, consider the following:
– Obama is the only president in history to never have a year of 3% GDP growth.
-Obama and his economic advisers were working hard to convince the American people that 2% GDP growth and 5.5% unemployment are the “new normal”; days of 3 or 4% growth are gone forever. This is the same time that China’s GDP was chugging along at about 8% annual growth.
Robert Krugman, Nobel prize for economics and adviser to President Obama on economic matters said, as a result of the Trump victory, “We are very probably looking at a global recession, with no end in sight.”
Yep, Obama really had our economy set up nicely for incoming President Trump.
One final noteworthy Obama quote from the fall of 2016, “Trump will not be President.”
Marv Covault