October 10, 2011
From over at Business Insider, here's a chart that Henry Blodget, CEO and Editor-in-Chief of Business Insider, says will 'get Obama fired.' I'm not so optimistic as Blodget, there's simply too many really dumb, naive, uninformed voters and takers in America, so I see this as a chart that 'SHPULD' get Obama fired.
As Blodget points out in his piece, the actual unemployment rate in the chart below (click image to enlarge) is higher than the "nightmare scenario" initially envisioned by the Obama Administration (The unemployment rate with no stimulus).
The chart shows three lines:
The incoming Obama Administration's projections for what the unemployment rate would be if no stimulus was enacted in the depths of the financial crisis.
The Obama Administration's projections for what the unemployment rate would be with the President's stimulus plan.
The actual unemployment rate.
Blodget uses the chart to show that the Obama administration drastically underestimated how bad the economy was and drastically overestimated its ability to do something about it ... then goes on to excuse Obama from his ineptness by blaming it on "the extent of the damage -- and the kind of damage -- that Obama inherited" (from his predecessor[s]). Blodget then jumps the shark by saying there was nothing Obama could have done differently except have asked for a "much bigger stimulus":
[...] "... this was always going to be a long slog. As a quick glance at debt-to-GDP charts show, this recession was not a run-of-the-mill cyclical recession. It was a debt-fueled balance sheet recession. And if there's one thing history shows about those, they take years if not decades to fix. (See Japan and the Great Depression)."
"If Obama had recognized how bad things were, asked for a much bigger stimulus than he ended up asking for, and, importantly, set the appropriate expectations, he'd probably have been able to pin the blame for the mess where it belongs: On the three decades of decisions that facilitated the debt build-up that eventually culminated in the financial crisis."
Blodget is essentially parroting, in part, what Obama has been saying, over and over, in every speech since he took office - he inherited a mess, it's all the Republican's fault, and he needs to spend more taxpayer money to get the economy on track ... despite the fact that he and his fellow Democrats shut the GOP down on every discussion about the economy, and ignored it, and instead, spent most of his early Obama presidency ramming through his costly, budget-busting, job-killing, healthcare bill. Obama and his fellow Dems ignored basic economic facts such as both government and consumer debt is way too big (and government debt under Obama has exploded). They also ignored facts such as the fastest way to get business to hire more people is to make it easier for them to make a profit (i.e. eliminate costly, job-killing, bureaucracy and regulations - starting with Obamacare and many EPA regs) and that demand for products, goods, and services is created by people spending money on what 'they want to spend it on' (i.e. market demand)... not what the government says they 'should' be spending it on (i.e. windmills, the Chevy Volt, expensive solar, public sector unions).
Take home message and a few pointers for the Obama administration: Keynesian economics doesn't work - ergo Obamanomics doesn't, and won't, work. ('government' jobs take away from job growth - private sector job growth actually creates jobs). Government spending ultimately "kills jobs" because jobs are not a static commodity to be purchased and put on a shelf (and diverting money away from the private sector does not encourage it to grow). Genuine jobs are commitments, created in response to demand. Furthermore, we cannot tax and spend our way to high growth. And without Social Security and Medicare reform (along with repeal of Obamacare).