Poor Barbra Streisand. Just last week the renowned economist (who also describes herself as a “singer,” “actress,” and “activist”) penned an opinion piece titled “Have You Heard the Good News?” about how well the economy is performing under Barack Obama. It was a pep rally of sorts, and all that was missing were the pom-poms. “President Obama’s Administration, with only opposition from the Republicans,” she gushed, “has steadily helped put more than 11 million Americans back to work in the private sector.”
Then two days later the dismal jobs report for March was released. Bad timing, for sure.
The statistic Ms. Streisand failed to mention was 6.6 million jobs. This is the deficit of payroll increases compared with the number at this point — five and a half years in, roughly the same duration of the Obama administration to date — in the Reagan administration, which oversaw the recovery of the 1980s. Where are those jobs? Yes, we’ve created 11 million jobs, but that number should be closer to 18 million. Of course, this gap of 6.6 million is even more startling when we take into consideration the population increase over the past 30 years. The jobs boom under Reagan dwarfs the meager Obama recovery even though Obama started with a jobs base nearly 50 percent higher!
This 6.6 million nonexistent jobs in this recovery is the equivalent of every job in the states of Indiana, Iowa, and Kentucky disappearing from the landscape. It’s an especially dismal record given that in eight years real wages also haven’t risen for those in the middle class who are working. Ms. Streisand acknowledges this at least, but blames it on Republicans.
What we are seeing now is yet another demoralizing slowdown in the pace of recovery under President Obama. In the past twelve months, the pace of hiring had picked up to roughly 269,000 new jobs monthly, but then we got the news in March that the number was a flimsy 126,000. After calculations were revised downward, job creation was found to be less than half that number. The GDP number for the first quarter of 2015 is expected to come in at an anemic 1.5 percent or less.
Ms. Streisand boasts that the headline unemployment rate is down to 5.5 percent — but this is one of the most misleading economic statistics of modern times. That rate is low mainly because of the still historically low rate, 62.7 percent, of labor-force participation. Millions of Americans aren’t working who could and should be. Nearly 100,000 more dropped out of the labor force in March.
The broader unemployment rate, which includes those who have dropped out and those who can’t find full-time work, is closer to 11 percent. Ms. Streisand is right that President Obama didn’t cause the recession. But he did cause the weakling recovery.
Where did we go wrong under Obamanomics? We have spent and borrowed $7.5 trillion in six years. The Fed has printed and expanded its balance sheet to well over $4 trillion. We have had fiscal stimulus plans, tax increases on the rich, Obamacare, “cash for clunkers,” minimum-wage increases, and housing bailouts, and none of it has returned the economy to anything near the prosperity we saw in the 1980s and ’90s. Reagan’s philosophy was that government is the problem not the solution. Obama believes government can not only put everyone back to work but can even stop the rise of the oceans.
Getting back to real full employment is going to require a policy readjustment. There are four actions this president could take immediately that would create jobs: approve the Keystone pipeline, reverse recent EPA regulations that are strangling our oil and gas producers and our utilities, suspend the 50-workers and 30-hours-a-week rules that trigger Obamacare mandates and regulations, and cut the corporate tax rate.
The 6.6 million jobs deficit is holding back family incomes and growth and bodes poorly for the future. A recent survey finds a record number of college graduates living at home, many of them unemployed. Will they ever become economically self-sufficient?
Over the past five years, we haven’t had “middle-class economics,” as President Obama calls it, but rather middle-class shrinkage. Median middle-class annual household income is still about $500 lower when adjusted for inflation. That’s the bad news that a Hollywood prima donna like Barbra Streisand hasn’t heard.