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Obamanomics is not working

by George Landrith

Barack Obama is nearing the fourth year of his presidency and the economy continues to languish as evidenced by the fact that the unemployment rate “unexpectedly” shot back up and has been above 8 percent for his entire presidency.  The truth is there is nothing “unexpected” about our current economic woes.  In fact, for those who understand the fundamentals of economics, the current high unemployment rates are both predictable and expected.  The truth is –  Obama’s policies and his politics could not have produced economic recovery any more than dirt and water can produce a tasty three-layer cake.

During the first three years of his presidency, Obama took advantage of the goodwill he enjoyed and blamed the nation’s economic problems on his predecessor.  But that ploy won’t work any longer.  Recessions typically last 12 to 18 months. Occasionally, they last longer. But it is rare.  So why is Barack Obama’s recession lasting so long?  Because Obama has done almost everything wrong in dealing with the economy.

Rather than cut wasteful spending by reviewing the federal budget line-by-line as he promised, Obama has wasted trillions of tax dollars on failed bailouts. Obama and the huge Democratic majorities in Congress in 2009 and 2010 dramatically increased federal spending by about 20% while everyone else except Obama and Congress was forced to tighten their belt.  The huge and growing deficit creates a climate of economic uncertainty and that uncertainty is a job-killer.

Much of this bailout money went to poorly managed and failing businesses. Still more billions were sent off to state and local governments to prop-up government jobs. In the process, Obama gave hundreds of billions to private and public sector unions as a campaign payoff to supporters.  But the rest of the country saw unemployment balloon as businesses staggered under the weight of Obamanomics.

Obama has consistently rhetorically attacked the private sector which is the engine that will create the jobs to pull us out of the current recession.  Rather than providing a tax and regulatory climate in which entrepreneurs are willing to take risks and start businesses and create new jobs, Barack Obama has used the bully pulpit to vilify the business community and create greater uncertainty for entrepreneurs.

In addition to rhetorical attacks, Obama has proposed legislation and regulation that saddles small businesses with unprecedented mandates and costs. Rather than working to create an environment in which jobs could be created in the private sector, in 2009 and 2010, Obama and congressional Democrats rammed a costly and unwanted national healthcare mandate down America’s throat.

Even on the question of taxes, Obamanomics has been a disaster. While Obama has offered some modest temporary relief to those who spend money as Obama directs, he has refused to support any long-term across-the-board tax rate cuts. The truth is businesses need lower tax rates, not the promise of a few short-term tax brakes if they spend money as directed by government.

On the issue of energy, Obama’s policies have made energy more expensive with prices doubling during his term. As a result, Obama’s energy policy has imposed a huge “tax” on American families and businesses. He has consistently opposed legislative and regulatory proposals that would allow America to produce more of its own energy.  Rather than helping America produce more energy, he counsels Americans to drive smaller cars and inflate their tires. This is not a serious energy policy.

On climate change, Obama continues with Al Gore’s now self-evidently silly mantra that human activity is causing catastrophic changes to the world’s climate.  Since 2009, thanks to the climate-gate e-mail scandal, we know that warming alarmists manipulated climate data to support their theories and increase their funding.  Moreover, more than 1,000 scientists question the conclusions of the UN’s Intergovernmental Panel on Climate Change which was drafted by fewer than 60 scientists. Acclaimed MIT Climate Scientist Dr. Richard Lindzen’s research shows that the earth’s climate has had “no statistically significant warming since 1995.” Yet, despite the growing evidence that climate alarmism is overblown hot air, Obama continues to push anti-energy policies that stifle economic growth and heavily taxes families and businesses alike.

Rather than unleash the entrepreneurial power of small businesses, Obama has saddled them with unprecedented mandates, uncertainty, costs and taxes. Rather than promoting an energy policy that will keep energy prices low, stable and help fuel our economic growth, he has done precisely the opposite with current energy prices swamping any real hope of job growth.

And the truth is that the jobless rate is far worse than Obama will admit. Gallop polling lists the unemployment rate at more than 10 percent and the “underemployment” rate at more than 19 percent. Simply stated, far too many people cannot find work and even more people have only been able to find a temporary part-time job. While that part-time job takes them off the “unemployed” list, it doesn’t take them off the economically endangered list.

As long as Obama continues to try to make cakes by mixing dirt and water, we can expect that one in five American families will suffer economically.  No one can honestly claim this is “unexpected.” Our current economic woes are the result of failed policies.

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George Landrith is the president of Frontiers of Freedom, a public policy think tank devoted to promoting a strong national defense, free markets, individual liberty, and constitutionally limited government. Mr. Landrith is a graduate of the University of Virginia School of Law, where he was Business Editor of the Virginia Journal of Law and Politics. In 1994 and 1996, Mr. Landrith was a candidate for the U.S. House of Representatives from Virginia’s Fifth Congressional District. You can follow George on Twitter @GLandrith.