There are quite a lot of opinions about Obama’s reelectability in the face of bad economic news. The national debt is up, economic growth is slow, jobs are not being produced as promised, house prices continue to fall, and employers are complaining about policy uncertainty.1 So it will be very interesting to see just where we are, how we got here, and how the economy will effect Obama’s reelection.
There is little doubt that today’s economy belongs to Presient Barack Obama, regardless of his blaming George W. Bush for all of his problems. “Now, my administration has a job to do as well, and that job is to get this economy back on its feet,” President Obama declared on July 14, 2009, in Warren, Mich. “That’s my job, and it’s a job I gladly accept. I love these folks who helped get us in this mess and then suddenly say, well, this is Obama’s economy. That’s fine. Give it to me.”2 This month’s unemployment rate is 9.1%. When Obama gave the above mentioned speech, it was 9.5%. This month’s unemployment rate is still well above the 8% rate we were promised if the stimulus was enacted. What is really sad is that his advisors said the unemployment rate would top out at 8.8% if the stimulus was not enacted. Since Obama gave that speech in 2009, the country has spent $2.8 trilion, run up $3.7 trillion in debt, and lost 2.8 million jobs.
But the main point is that Obama and the administration act like and say that they know what they are doing.
Here is another newsflash from The New York Times: the stimulus did not work.3 The stimulus of $787 billion was supposed to create or save 3.5 million jobs by 2011. When Republicans proposed reducing taxes and regulations and promoting free trade, the left attacked them, claiming they offered no new ideas. Then the left said that government must help by coming to the rescue. The left proposed new taxes to pay for the help. Despite all the stimulus “help,” the country is still stuck in the economic doldrums.
Keyensian economics4, named after John Maynard Keynes (1883 – 1946), a British economist, with its focus upon macroeconomics, proposed that a government’s intervention in the economy through public policies that aim to achieve full employment through measures, such as deficit spending, that stimulate aggregate demand. Keynes’ solution to this poor economic state was to prime the pump.5 By prime the pump, Keynes argued that the government should step in to increase spending, either by increasing the money supply or by actually buying things on the market itself.
In November, 2008, President-elect Obama named members of his administration’s economic team, including Timothy Geithner as his Treasury Secretary nominee, and Lawrence Summers as the director of the National Economic Council.6 “I’ve sought leaders who could offer both sound judgment and fresh thinking, both a depth of experience and a wealth of bold, new ideas, and most of all who share my fundamental belief that we cannot have a thriving Wall Street without a thriving Main Street,” Obama said at a press conference Monday in Chicago. He also announced economist Christina Romer as the director of his Council of Economic Advisors, and he named Melody Barnes to be the director of his Domestic Policy Council (DPC). He appointed his longtime adviser Austan Goolsbee to chairman of the Council of Economic Advisers in September, 2010.7 He replaced Christina Romer, and was a professor at the University of Chicago.8
We know what the “dream team” produced during the first two years of Obama’s presidency. The question now is: Where are they now? Here is the answer.9
- Tim Geithner – the only senior official remaining from the economic team when President Barack Obama took office in 2008.
- Larry Summers – Chairman of the National Economic Council, left the administration at the beginning of the year. He returned to teaching at Harvard University.
- Christina Romer – head of the Council of Economic Advisers, the coordinator of economic policy across the administration, resigned in September 2010 to return to the University of California at Berkeley.
- Austan Goolsbee – chairman of the White House Council of Economic Advisers, plans to return to teaching economics at the University of Chicago this fall.
- Jared Bernstein – actual architect of the stimulus, and the man who was behind Vice President Biden’s “Summer of Recovery.”
Another name that has often surfaced is Peter Orszag, President Obama’s first budget director.10 He was instrumental in shaping the 2009 stimulus package and the health care legislation passed in early 2010. Mr. Orszag pushed for and won a controversial provision to create something called the Independent Payment Advisory Board (IPAB). House Democrats blame Mr. Orszag for having led the incursion onto their territory, and they seem hopeful for a better reception from his successor, Jacob Lew. Mr. Orszag was a protègè of Robert E. Rubin, the former treasury secretary. He served as an economic adviser to President Bill Clinton, and before that to Mr. Clinton’s Council of Economic Advisers. After leaving the White House, he formed an economic consulting company, then became a senior fellow for economic studies at the Brookings Institution, a center-left research organization in Washington. He resigned in July, 2010.11
Three days ago (6 Jun 2011) we learned that Austan Goolsbee is leaving his post as the chairman of the Council of Economic Advisers.12 Obama called him “one of America’s great economic thinkers.” While the country was gripped by the latest depravity committed by the elites who profess they know how to improve our country, it was easy to miss the announcement and its ramifications.13 The announcement that the president’s remaining academic economist, Austan Goolsbee, was heading for the exits was a strong indication of our national economic crisis and the turmoil at the top: he resigned after only nine months at the helm. Goolsbee headed the President’s Council of Economic Advisers, Obama’s assembled “wise men.” Two and a half years ago, Goolsbee was part of President Obama’s so-called economic “dream team.” With Goolsbee’s departure, the collapse of the president’s economic team is nearly complete. When Goolsbee joined Team Obama, the unemployment rate was at around 6 percent. When he announced his resignation on Monday, the jobless rate stood at 9.1 percent.14
Today (9 Jun 2011), with the eonomy in ruin and unemployment high, what are President Obama’s reelection chances? Well, let’s see. The president truly looks vulnerable, bereft of ideas for economic recovery.13 The president’s ratings on the economy and federal budget deficit did not contribute to the increase in overall job approval. Instead, his approval in those areas remained flat – and weak – at just 37 and 32 percent, respectively.15 This could spell trouble in the 2012 elections. Four more years of President Obama means home prices continue on their downward spiral and bankruptcies.16 The private sector responds to increased taxes, regulations and healthcare costs by refusing to hire more workers. Layoffs continue and real unemployment approaches 20%. The Federal Reserve continues to print dollars and buy debt. The third year of Barack Obama’s presidency is running into the same troubles he faced in his first two, undermining his prospects for a second term.17 No issue looms larger than the economy’s continued weakness, despite $1 trillion in stimulus money Obama and his party threw in. Obama and his adisors bet that their costly public-works spending plan would create tens of millions of jobs and boost the nation’s economic growth rate. But two years and five months later, the once robust American economy is crawling along. As the economy slows, so does job creation. Another Obama policy that adds to the economy’s weakness is the government’s excessive spending levels and its growing $14.3 trillion debt. In Reckless Engagement,18 the latest book about the financial crisis, co-authors Gretchen Morgenson and Josh Rosner do what many of their high-profile counterparts failed to do: Name names for those responsible for the crisis. And here is an article19 that outlines Obama’s cronyism.
Bottom Line: Obama is VERY vulnerable. He and his “dream team” made some bad decisions for which we taxpayers are paying. Perhaps if enough voters see upon whom he relied, he will not be reelected in 2012.
- Bad Economic News Bodes Ill for Obama’s Re-Election
- It’s Obama’s Economy, Stupid
- Morning Bell: The Unstimulated Obama Economy
- Keynesian economics
- What Is Keynesian Economics?
- Obama names his economic team
- Obama promotes adviser Goolsbee to top economic post
- Obama economic team shifts from left with Goolsbee appointment
- Quick Facts: What happened to Obama’s economic team?
- Peter R. Orszag
- For Budget Chief, Not All Farewells Are Fond
- Top Obama Economic Adviser Goolsbee to Quit to Return to Professor Position
- Goolsbee Gone: Obama’s Economic ‘Dream Team’ Evaporates
- Obama’s Egghead Economic Saboteurs
- Majority of Americans Disapprove of Obama’s Handling of the Economy, Budget Deficit
- Defeating Denial to Avert Disaster
- As the Economy Goes, So Go Obama’s Re-Election Prospects
- ‘Reckless Endangerment’: Morgenson, Rosner Name Names — Point Finger at Fannie Mae
- Obama Offers Prime Posts to Top Campaign Contributors (Update1)