Our 1 Percent Economy
by Stephen Moore
August 30, 2016
Have you noticed that Hillary Clinton wants to talk about the economy about as much as she wants to talk about Monica Lewinsky or Benghazi? Here's why: The economy is lousy. Feeble.
Barack Obama's own numbers prove it. We got revised GDP numbers from the Commerce Department on Friday and the economy is actually getting worse. The rate of economic growth was slightly less than 1 percent for the first six months of 2016. No wonder almost half of Americans think we are still in a recession. They are personally in recession.
Is this really the best that the mighty American engine of economic growth can do? The Wall Street Journal recently reported this is the most tepid recovery from a recession since the 1940s. That was with 2 percent growth. Now we are peddling faster for slower speeds.
The business sector of the economy has sunk into what Larry Kudlow of CNBC calls a "soft recession." Profits are shrinking (down 2.4 percent last quarter), so how long can the stock market rise?
The consumer is keeping the economy out of negative territory, but that's only because we are spending more than we are earning. The federal government thinks it can borrow and borrow forever, but how long can families do that before they go bust? About as long as the housing bubble could inflate without bursting.
This is some recovery. Under Ronald Reagan we had growth rates quarterly of 4, 5 and even 6 percent. Economists in the '80s worried about overheating. Too much growth. Now growth is nowhere to be seen -- except for those at the very top of the income ladder.
The Democrats who keep saying how well the economy is doing seem to be living in an alternate universe. And that's probably because so many of the left-wing pundits and economists live and work in Washington, D.C., which really is doing just fine. D.C. is booming thanks to the tribute taxpayers from real America send each month to the capital. Three of the five wealthiest counties are around D.C. That tells you everything about who is getting rich off liberal government expansion policies.
Clinton says that what the economy really needs now is a tax increase. That's crazy talk. A new study by the National Center for Policy Analysis says that Clinton's economic plan will eventually shave 1 percent off GDP. That would technically sink the economy down to zero growth.
Oh, and speaking of government borrowing, there was more "wonderful" news this past week. The deficit is now climbing again to an estimated $600 billion this year. The red ink is headed back to $1 trillion on current course. Some states are facing a 20 percent or more rise in Obamacare premiums this year.
Clinton and Obama point to the low unemployment rate. We are creating jobs, but they are burger flipper and "Would you like fries with that order?" jobs. The good jobs are disappearing. The Financial Times reports that more than 1 million manufacturing jobs have been lost since 2007.
So much for morning in America.
What is needed to turn the ship of state? Tax cuts. Deregulation. American energy production. The repealing of of Obamacare. Trump should talk about little else if he wants to win. Clinton seems clueless about where jobs come from. This is the woman who once said that businesses don't create jobs.
Could it get worse? Here's how economist David Tuerck described Clinton's jobs plan in his NCPA study: "What we have here is a plan to destroy hundreds of thousands of private sector jobs just to pad government payrolls while, in the process, doing almost nothing to improve tax fairness."
Obama and now Clinton keep promising more growth and more fairness. So far, they have produced neither. As The Wall Street Journal recently put it, Clinton's agenda theme should be called "Hope and No Change." Voters need to decide if they think four more years of this will lead to any different result.