This past Friday, the Bureau of Labor Statistics delivered another dismal jobs
report to the American people. The economy created only 96,000 new jobs and the
base rate unemployment figure came in at 8.1%. President Obama has now presided over a record 43 straight months of unemployment above 8%. And the only reason the August unemployment percentage isn?t higher, is because 368,000 individuals left the work force. That?s right, in August almost four times as many Americans left the workforce as found new jobs. These amazing and depressing facts brought the U.S. workforce participation rate to a new 30-year low of 63.5%. More than 23 million Americans are now unemployed, underemployed, or have become discouraged and stopped looking for work ? 23 million!
As President Barack Obama’s term as President comes to an end, Americans are faced with even tougher economic struggles than they were four years ago.
Unemployment was 7.8% when President Bush left office in January 2009. This was at the depths of the recent housing debt policy induced recession. Now, 3.5 years into a recovery, the economy and job opportunities should be booming. But, because of Obama’s anti-business, anti-energy, anti-jobs policies, base rate unemployment is still at 8.1%. Just as bad: median household income in the United States has fallen by almost $5,000 during Obama?s time in office. It was $54,983 when Bush left office and now it has fallen to $50,054! Gas prices have more than doubled from an average $1.85 per gallon in January 2009, to $3.82 per gallon today. And under President Obama’s leadership, our national debt has increased from $10 trillion to $16
trillion in just 3 years. This is a far greater surge of debt than ever before
experienced in American history. And 46.2 million Americans remain in poverty a
number unchanged since last year. As Presidential Candidate Mitt Romney made clear at the close of the Republican National Convention two weeks ago, Americans are worse off than they were four years ago.
A large majority of Americans agree. A recent Associated Press poll shows just 28% of Americans say they are better off economically than they were when Obama became President in 2009. A recent Rasmussen poll shows only 32% of American adults believe the economy will strengthen over the next year, and in July, only 14% of Americans expected today?s children to be better off than their parents, which is an all-time low. That number improved only slightly in August to 16%.
But President Obama and his re-election team disagree. While acknowledging that
things need to improve for most Americans, they spent the last week arguing the
middle class is actually better off than it was four years ago because of the
General Motors and Chrysler auto bailouts. Rahm Emanuel (Obama?s former Chief of Staff and the current Mayor of Chicago who is floundering in the face of a major teacher’s strike this week) declared the auto industry is now ?thriving. Vice President Biden has been shouting his bumper sticker slogan, ?Osama bin Laden is dead, and General Motors is alive? every time he is given an opportunity to speak.
And President Obama proudly proclaimed during his acceptance speech at the Democrat National Convention last Thursday, ?we reinvented a dying auto industry that’s back on top of the world. In general, the Democrats? are claiming that Obama’s unprecedented and illegal auto bailout saved 1.5 million jobs, and thus saved the economy from an even worse fate had no bailout been extended to Chrysler and GM.
Of course, the Democrats? claim is pure nonsense. Their 1.5 million jobs saved claim comes from the preposterous assumption that the entire auto industry would have collapsed without Government interference. In other words, even auto manufacturers who refused the bailout (such as Ford, Toyota, and Honda) would have collapsed along with Chrysler and GM. Obama and his team also assume that no jobs would have survived a normal and legal bankruptcy and restructuring process for GM and Chrysler, and that many down-stream jobs that support the auto industry (such as parts manufacturers, suppliers, and warehousing agencies) would have disappeared.
The economic facts are quite different.
The truth is that a real bankruptcy and restructuring process managed by a judge and private sector investors would have created real change for GM and Chrysler? Change that could have led to real long-term success in the marketplace. The Obama Administration?s managed bankruptcy and bailout that preserved rich union contracts and union power, has also made GM weak for the long run. Despite all of Obama’s efforts, the company is losing market share and losing stock value. During the first seven months of 2012, GM’s market share has dropped to 18% (down from 20% during the same time period in 2011). GM stock value has fallen from $33 a share when it went public on November 17, 2010 to around $23 per share today. In order for tax payers to ?break even? on the bailout, the government would need to sell their remaining ownership of the company for $53 a share not likely.
But despite (or perhaps because of) Obama’s bailout, GM still faces the possibility of ultimate failure. GM continues to lag behind its competition in terms of design development (consider their new Malibu design), and continues to build cars that Americans just don’t want to buy. Industry analysts just released new estimates that show GM is losing as much as $49,000 on each Volt it builds. GM had hoped to sell 40,000 Volts in 2012, but has sold only 13,500 so far. At least selling fewer of the politically motivated ?Volts? has been good for the company?s solvency! With economics like that you just cannot make it up on volume.
Lacking innovation and leadership, GM will likely need another bailout in just a few years to stay in business AND preserve the uncompetitive, outrageous auto union contracts. By not allowing GM to enter the traditional bankruptcy process and engage in the reorganization that is necessary for long term success and self-sufficiency, the Obama administration has created a car manufacturer dependent on government for its survival.
The bottom line is that Obama and the Democrats are not instituting policies that will strengthen the American economy. Whether at the business, family, or
individual level, their policies do not encourage Americans to stand on their own two feet, create economic wealth, and take care of their own families. Instead, their policies (GM bailout, failed and misguided Keynesian stimulus, Obamacare, Bank over-regulation, overreaching energy regulation, tax payer ?loans? for solar energy companies, etc.) leave Americans with higher energy costs, less annual income, and fewer jobs. In short, Americans are in no way better off than they were four years ago.
At the beginning of his term in office, President Obama said ?If I don?t have this done in three years, then there?s going to be a one term proposition.? Well, President Obama has failed to turn the economy around, and has promised to implement more of the same failed economic policies if elected to a second term. It is up to all of us who vote to keep this from happening. We must vote for Mitt Romney and Paul Ryan in November!