Obama needed a filet mignon in the June employment report. Instead he got a rubber chicken.
Only 80,000 new jobs were created last month, way below Wall Street expectations. It’s the fourth consecutive monthly disappointment. For a few months last winter, jobs were rising at an average of 225,000 a month. But that has sloped way down to only 75,000. The unemployment rate continues at 8.2 percent, which is the forty-first straight month above 8 percent. The U6 unemployment rate, which includes discouraged workers, is just under 15 percent.
As voters finalize their election impressions this summer, all of this is bad news for the Chicago incumbent.
At a campaign stop in Ohio on Friday, Obama actually said we’re still “heading in the right direction.” Is he kidding? As a stagnant GDP drops below 2 percent, employment falters, retail sales decline, and the ISM index for manufacturing drops below 50 (signaling contraction)? No objective observer can deny that the economy is headed in the wrong direction.
I don’t like playing the pessimist, but the numbers are the numbers. This is exactly what former Clinton advisers James Carville, Doug Schoen, and Stanley Greenberg have been warning Obama about. People just don’t believe the economy is getting better. So he’s gotta change his message.
But what change? Taxing rich people won’t create jobs. Neither will bashing Bain Capital. Obama is surrounded by leftist campaign advisers. And it’s hard to see them shifting gears to something constructive like making a summer deal to extend the Bush tax cuts for a year, or heaven forbid backing off the 20-some-odd tax hikes embodied in Obamacare.
In other words, Obama’s goose may already be cooked.
The Joint Economic Committee (JEC), spearheaded by Texas congressman Kevin Brady, put out a report saying that the Obama recovery now ranks dead last in modern times. That’s a real milestone in the post-WWII era. It’s ten out of ten for both jobs and economic growth. According to the Bureau of Economic Analysis, real GDP has expanded only 6.7 percent over the eleven-quarter recovery since the recession ended. The Reagan recovery at the same stage had increased by 17.6 percent. The Clinton recovery by 8.7 percent.
As for jobs, the Bureau of Labor Statistics reports that the number of private-sector jobs has grown by only 4.1 percent since the cyclical low point. Reagan’s record was 10.7 percent.
So much for Obamanomics. Didn’t work. Still isn’t working. As the JEC put it, spending stimulus, housing bailouts, auto bailouts, financial bailouts, cash for clunkers, cash for caulkers, and $5 trillion in deficit spending left the Obama recovery dead last in modern times.
Whatever happened to the great boom of the ’80s and ’90s, when the animal spirits were strong and the American economy wasn’t held hostage by Europe or China? In an odd twist, both Obama and his top economist Alan Krueger blame “problems built up over decades.” Does that mean they blame Clinton? Reagan?
For nearly 25 years — during those bad old decades — the economy increased 3.3 percent annually. Unemployment dropped from 11 percent to 6 percent to 5 percent to below 4 percent. Obama would swoon for numbers like that. But those statistics come from the era when big government was over, when pro-market forces stopped the expansion of Leviathan, and when marginal tax rates were slashed to grow the economy.
Now the question is, with Obama’s economic goose cooked, does Mitt Romney have what it takes to win the election and provide a pro-growth economic model that will restore prosperity at home and America’s number-one position around the world?
Some powerful figures — including Rupert Murdoch, Jack Welch, and even my brothers and sisters at the Wall Street Journal editorial page — have taken shots at Romney in recent days. But I am more optimistic. In response to his critics on the day of the bad June jobs report, Romney talked about expanding energy resources, approving the Keystone pipeline, cutting taxes, and increasing trade with Latin America. He reaffirmed his intention to cut federal spending and eliminate programs.
Basically, Romney is promising a return to free-market, supply-side policies on taxes, trade, regulation, and spending. Hopefully he will embrace a sound and stable dollar as well. I still believe Romney is the most underrated politician in America today, and that he’s the most conservative Republican standard-bearer since Ronald Reagan.
In other words, he’s some real filet mignon.
– Larry Kudlow, NRO’s economics editor, is host of CNBC’s The Kudlow Report and author of the daily web log, Kudlow’s Money Politic$.