Way back in 2010, I shared two very depressing numbers to illustrate how Obama’s policies were creating “regime uncertainty.”
I shared data on the cash reserves of companies and suggested it was bad news that those firms thought it made more sense to sit on money rather than invest it.
I also shared numbers on the excess reserves that banks were keeping at the Federal Reserve and speculated that this was because of a similarly dismal perspective about economic prospects.
At the time, I figured that those numbers eventually would get better. But I was wrong.
Companies are still sitting on the same about of cash and banks have actually increased the amount of money they have parked at the Federal Reserve.
Now let’s look at some more data that doesn’t reflect well on Obamanomics.
The Federal Reserve Bank of Cleveland has some very discouraging analysis about worker compensation.
…real wages have barely risen—real compensation per hour has risen only by 0.5 percent, much less than at this point in past recoveries. The lack of strong wage growth has been one factor that has held down the growth of income, consumer spending, and the recovery. …Some longer-term changes in the economy have likely played a larger role in depressing real wage growth. …Productivity growth in the nonfarm business sector has averaged only 1.46 percent since 2004 and 0.85 percent since 2010. As the growth of labor productivity is a key determinant of real wage growth in the long run, the slowdown of productivity has probably helped to depress wage growth.
And here’s a chart from the article.
The brown line at the bottom is what’s been happening under Obamanomics. As you can see, compensation has basically been unchanged for the past five years. In other words, living standards have stagnated.
The Cleveland Fed data shows dismal earnings and productivity data for all Americans. And it’s important to understand how those numbers are related.
Some folks in Washington think that companies should act like charities and give workers lots of money simply because that’s a nice way to behave.
In the real world, though, workers get paid on the basis of how much they produce. So when productivity numbers are weak, as the Cleveland Fed points out, you also get weak data for worker compensation.
But now let’s dig even deeper and ask what determines productivity numbers. There are many factors, of course, but saving and investment are very important. In other words, capital formation. Simply stated, you need people to set aside some of today’s income to finance tomorrow’s growth.
And growth, as measured by inflation-adjusted changes in output, is entirely a function of population growth and productivity growth.
So the bottom line is that workers will only earn more if they produce more. But they’ll only produce more if there’s more saving and investment.
And this is why Obama’s policies are so poisonous. His tax policy is very anti-saving and anti-investment. And the increases in the regulatory burden also make it less attractive for investors and entrepreneurs to put money at risk.
Obama thinks he’s punishing the “rich,” but the rest of us are paying the price.
Now let’s look specifically at American blacks.
Deroy Murdock explains in National Review that they should feel especially angry at the gap between Obama’s rhetoric and performance.
Republicans should ask black Americans for their votes from now through November 2016. They should do so by challenging blacks to ask themselves an honest question: “What, exactly, have you gained by handing Obama 95 percent of your votes in 2008 and 93 percent in 2012?”
Deroy then lists a bunch of depressing statistics on what’s happened since 2009.
Here are the numbers that I think are most persuasive.
U.S. labor force participation has declined during that same period, from 65.7 to 62.7 percent. For blacks in general, …dipping from 63.2 to 61.0 percent of available employees in the work pool. For black teenagers, however, this number deteriorated — from 29.6 to 25.7 percent. The percentage of Americans below the poverty line inched up, the latest available Census Bureau data found, from 14.3 to 14.5 percent overall — between 2009 and 2013. For black Americans, that climb was steeper: The 25.8 percent in poverty rose to 27.2 percent. Real median household incomes across America retreated across those years, from $54,059 to $51,939. …such finances also reversed for black Americans, from $35,387 to $34,598. …Home ownership slipped from 67.3 percent of Americans in the first quarter of 2009 to 64.0 in the fourth quarter of 2014. For blacks, that figure slid from 46.1 to 42.1 percent.
Here’s Deroy’s bottom line.
Obama has betrayed blacks as a community, failed Americans as a people, and enfeebled the United States as a nation.
To be sure, it’s not as if Obama wanted to hurt blacks. He just doesn’t understand or doesn’t care that statist policies undermine economic performance.
And when you hurt economic growth, the folks at the bottom rungs of the economic ladder generally suffer the most, and that’s why there are so many grim statistics about the economic health of black America.
The good news is that we know how to solve the problem. The bad news is that Obama is in the White House until January 2017.
[…] I’m sure he made that choice because it gave him a number that sounded bad, but there are very good reasons to focus on the share of people employed rather than the unemployment rate (though it’s worth noting that a 28.4 percent unemployment rate for young blacks is plenty scandalous, which raises the question of why Trump didn’t point out that African-Americans have been hurt by Obamanomics). […]
[…] we want to narrow things down, we know that blacks have endured hardship because of a weak […]
[…] let’s add one more piece of evidence to our arsenal. I’ve already shared lots of data and information when making the case that Obama’s big-government policies have not worked, but, in the spirit of […]
[…] add one more piece of evidence to our arsenal. I’ve already shared lots of data and information when making the case that Obama’s big-government policies have not worked, but, in the spirit […]
[…] And no wonder employee compensation has been stagnant. […]
[…] weakest recovery since the Great Depression. Income and wages have been stagnant, particularly when comparedto previous expansions. And while the unemployment rate has finally come down, that’s in part […]
[…] the weakest recovery since the Great Depression. Income and wages have been stagnant, particularly when compared to previous expansions. And while the unemployment rate has finally come down, that’s in part […]
[…] My response: Hard to argue with this suggestion, or the description of the problem. […]
[…] Which brings us back to the aforementioned Wall Street Journal column. Cassidy and Woodhill are totally correct to worry about the “new normal” of anemic growth. […]
interesting read…
“Americans are poorer –poorer by half—then on the day Ronald Reagan took office in January 1981. By this I mean simply that the per capita income that Americans can expect to earn on their aggregate wealth is half of what it was in 1981. How did it come to this?”
“How Americans Became Poor”
Author: David P. Goldman
http://atimes.com/2015/04/how-americans-became-poor/
both black and white Americans sense that something is different… but they have no idea just what… stores are closing… their neighbors are out of work… more people are clamoring for charitable food assistance… their towns are filling with migrants… smaller factories are closing or have closed… the guy down the road has started using drugs… because his life is falling apart… in our inner cities gangs oversee their turf… sell drugs and act as they please… the vicissitudes of fate? or something else?
quick…… someone tell us president Obama is the smartest man in the room………………………….. perhaps that will make us feel better….
“In a stunning Tuesday report, Gallup CEO and Chairman Jim Clifton revealed that “for the first time in 35 years, American business deaths now outnumber business births.”
“Economic Death Spiral: More American Businesses Dying Than Starting”
http://www.breitbart.com/big-government/2015/01/14/economic-death-spiral-more-american-businesses-dying-than-starting/
Has anyone looked at the statistics of minority workers in low wage jobs that did not provide healthcare..hours worked, productivity, take home pay and employment prior to the passage of Obamacare versus today?
I understand their have been delays with the implementation of Obamacare, but I would guess that bars, restaurants etc that employ minorities disproportionately, the owners of these businesses, which I am one in Canada, are deferring hiring and investment to minimize the impact of punitive rules contained in that law.
PS. Maybe if the Demoncrats [sic] would raise our taxes significantly, everyone could find middle class jobs….. ROTFLMAO. The world doesn’t need liberals. Let’s all pray for a horrible pestilence for them alone. ©2015
“The brown line [that’s what hit the fan???] at the bottom is what’s been happening under Obamanomics. As you can see, compensation has basically been unchanged for the past five years. In other words, living standards have stagnated.” [Perhaps not when correlated with the buying power of US fiat dollar and the inflation the fed.gov swears doesn’t exist.]
The biased, liberal, pro(re)gressive media would respond, “It’s the fault of the Tea Party, conservative media and Rush Limbaugh, and rich Republicans holding the underclass back by keeping their own money and waging war on women.” ROTFLMAO.
Everything Democrat is flotsam (not that the GOP is any different in results; res ipsa loquitor–don’t bother me with that Reagan crap, he was lucky not brilliant). Until The Republic is run like a republic (as designed and instituted) by Citizens (not royal Politicians), the descent toward third-world status (and the associated government oppression) will only accelerate. The USSA [sic] is hellbound with the Obamanation at the helm.
The fed.gov is not your friend. It is the fox in the hen house.
It and all the Politicians have have my “no confidence” vote. ©2015
Obamanomics is an attempt repeal the basic law of economics. Contribute and it shall be given unto you. “Progressive” econ is all about enabling and encouraging people to take. Give and it shall be given unto you. Continually demand that more be given you and you will never have enough. Never.
Taking results in stagnation and decline. Producing equals growth and prosperity.
The good news is that if Republicans can convince voters that they will fix the tax code and eliminate a significant number of regulations holding back entrepreneurial ventures, the prospect of a Republican win across the board should release these pent up resources.
[…] WAIT, THERE’S MORE… […]
[…] By Dan Mitchell […]
Well folks, this is decline. This is the face of decline.
It’s the decline that comes when you try to force people to work for others. Because they don’t.
That is the forest, and most will get lost in the micro-policy trees. But decline will continue. And this year Americans will lose yet another two percent of their relative prosperity compared to the world average. Compounding into the future.
With systemic growth half the world average…. there is… NO …future. Just distractions amongst the trees. Everything will get compounded down into decline; the lofty ideals, the rhetoric, the culture, the banners, the slogans, the hope. Surpassed, forgotten. The worst part? The vicious cycle: The more decline takes hold, the more people will latch on to failed ideas, as redistribution becomes the only desperate hope for immediate salvation – and even faster compounding longer term decline.