WhatFinger


Let's take a look at the real reasons for the recent economic improvements . . . and keep them in perspective.

Economy growing! Great! Obama vindicated? Not a chance!



You probably heard this past week that November job creation soared to more than 300,000, and that third-quarter GDP growth was revised to more than 5 percent. These are good numbers! I’m glad to see them. After five-plus years of sluggish growth, it’s about time we see some numbers like this.
Now, you have to remember a few things. For one thing, GDP growth merely reflects the change from where we were, and it was only two quarters ago that GDP actually receded by only 3 percent. Our per-capita growth is still not where it should have been had we been operating under growth-friendly policies for the past six years, and there’s nothing we can do to get those years back. Also, job creation is welcome and a falling unemployment rate is better than a rising one. But we’re still looking at the lowest labor force participation rate in many decades, and the U6 unemployment rate – which counts the underemployed and those who have stopped looking – is still above 10 percent. So let’s not get carried away with the happy-days-are-here-again talk. Things aren’t that rosy. But it’s still good news in the context of the times. All of this, of course, requires a good conservative to ask: Are Obama’s economic policies now working? After all, in addition to the aforementioned numbers, some of Obama’s supporters point to the Dow Industrial Average topping 18,000 for the first time. These are the people who hate Wall Street, of course, and if you asked most of them the question, “18,000 what?” I’m confident they would have no idea. But even so, there it is. Is this a vindication of everything Obama has done? Not a chance. And it’s not hard to explain why. First, understand that economies do operate in cycles. In spite of everything Obama, Reid and Pelosi have done to tax, regulate and union the private sector into submission, there is still plenty of wealth and productivity in this country. After long periods of slow growth, it’s inevitable that you’re going to see some busting loose. Politicians will try to say it’s because of them, but companies and individuals react to their wants and needs first. This will come as a shock to a mainstream media whose whole life revolves around government, but not everything happens as a result of government policies.

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They do have some effect, though, so what changed over the past 12 months that might have given rise to such better economic developments? I would point you to two things: First, toward the end of last year, the Republican-controlled House finally said enough to the never-ending extensions of unemployment benefits. This is a program that is supposed to run out after a person receives benefits for 26 weeks, with the possibility of one 26-week extension. Democrats had been insisting on constant extensions that were seeing people receive unemployment for as many as 99 weeks. That’s almost two years! Democrats have a fit when you say this, but the fact is that people react to incentives. When you keep extending unemployment benefits, you make it cheaper for people not to look for work and more expensive for employers to offer it. That perverse incentive has finally changed. Second, oil production – especially via fracking, the left’s least favorite extraction method – is booming on private lands, despite Obama’s refusal to approve leases on federally owned lands and his constant dumping of money into “green energy” initiatives that have achieved almost nothing to date. Not only is this driving the price of gasoline way down, it’s also creating wealth and employment opportunities. By the way, if you want to connect economic growth to government policy, don’t forget to look to the states. That’s where Republican governors are slashing corporate taxes and standing up to unions in traditional blue states like Wisconsin and Michigan. If ObamaCare has done anything good for this nation, it’s been to produce Republican majorities in state capitols where Democrats used to rule – and that is clearly producing tangible economic benefits for the people who live in those states. But oh yes, ObamaCare is wretchedly still with us, and we’re never going to remove the shackles from this economy on a permanent basis until we get rid of it. Today’s good news is welcome indeed, but let’s not make the mistake of thinking this vindicates anything Obama has done. All it proves is that America is too strong to be held down permanently even by the horror show that his policies have proven to be. We still need to bring that horror show to a close if we want to get back to real, sustained prosperity.


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