President Obama can’t stop talking about the 1 percent of people who he says don’t pay their fair share of the nation’s taxes. But he should be obsessing about a 1.5 percent — the rotten growth rate produced by the once-mighty US economy in the second quarter.
The slowdown announced Friday — on top of another slowdown in the first quarter — is further proof that the president’s class-warfare economic rhetoric and policies are pushing the country perilously close to a double-dip recession.
The numbers are pretty stark: Growth of 2 percent for the first quarter was already scary, down from around 4 percent at the end of last year. A few years out of a stiff recession like the one we had, the economy’s normally roaring, not sagging back down.
So the drop to a 1.5 percent growth rate for the second quarter is really quite staggering. At this rate, we could be in double-dip territory even by Election Day, as consumers continue to slash their spending and businesses their investments.
Yet the president either doesn’t know or doesn’t care that the country is headed right back into recession territory. He’s too busy bashing Mitt Romney’s record at Bain Capital to address what increasingly looks to be unfolding economic calamity.
Of course, Obama promised us hope, change and a robust recovery if we just followed his economic wisdom of massive stimulus spending and “green energy” investments.
And yes, the president will blame Republicans, who won the House in 2010, for thwarting his more recent efforts to spur the economy. Which they have — but who could blame them? It’s more of the same stuff that gave us Friday’s dismal growth number.
And dismal is the only way to describe what the numbers are telling us. Even Obama’s most ardent supporters on Wall Street are finding it tough to rationalize his obvious failure on the economy. And they know that the Federal Reserve’s policy of printing money hasn’t worked well enough, either — so more of it from Fed chief Ben Bernanke won’t reverse the trend.
Toss in stuff the president and the Fed can’t control, like the Euro crisis, and the outlook’s increasingly bleak.
And make no mistake: A double-dip recession would be pretty bad stuff.
The current unemployment rate of 8.2 percent is nothing to brag about, even if the president tries to make it seem like Nirvana. And that figure ignores the burgeoning numbers of people who’ve permanently dropped out of the workforce. Count those “long-termers,” and unemployment’s at a whopping 15 percent.
With a double-dip, you can expect those numbers to skyrocket — and with them, all the social ills seen when people have lost hope of finding work.
How’s that for hope and change?
And it won’t end there. Banks are said to be in better shape than they were four years ago, but sophisticated investors aren’t so sure. That’s why many big-bank stocks are trading just at or below “book value” — that is, what the banks disclose as the net value of their assets.
In other words, investors think banks are overestimating their strength to withstand an economic jolt — a double dip, a European meltdown, whatever. So while no one is (yet) predicting another financial crisis, the less-bad scenario isn’t so good: A rise in unemployment and in consumers’ loan defaults would certainly reduce bank profits, meaning even less lending to fuel growth.
Recognizing this vicious cycle isn’t exactly rocket science — though it seems to be lost on the president and his economic team, such as it is. Tim Geithner, the Treasury secretary for the past four years, seems oblivious — or at least powerless to get Obama to back policies that might get businesses to hire again.
Maybe that’s because the real administration power on these issues is senior adviser Valerie Jarrett, who shares the president’s most absurd economic theories, like the virtues of raising taxes on job-creating small businesses even in a time of economic distress.
Then again, why would Obama and his “brain trust” enact policies that, in succeeding, would refute their failed vision? They’ve have more pressing matters at hand. Winning the election comes before dealing with an economy that’s headed for the cliff.
Charles Gasparino is a Fox Business Network senior correspondent.