The Obama administration predicted that if Obama’s stimulus passed, unemployment would not go over 8%. He blatantly fearmongered the economy down in order to get his pet stimulus passed. Obama rushed his incredibly euphemistically-named American Recovery Act through Congress so fast that no one even got a chance to actually read it.
The idea, of course, is that Obama’s liberal solutions would stop the slide and make things get gradually better. But unemployment – which was at 4.4% when Democrats took power over both the House and the Senate – was at 6.7% when Obama got elected and at 7.2% when Obama was pushing for his stimulus in January. As the Associated Press puts it, “In January, President Barack Obama’s economic team predicted unemployment would rise no higher than 8 percent with the help of $787 billion in new government spending.” Yet unemployment is now higher than what the Congressional Budget Office said it would reach if we didn’t pass a stimulus.
Talk about a massive failure.
Now unemployment is at 9.5%, and – according to respected analyst Meredith Whitney – it is expected to top 13% in the coming months.
Unemployment is likely to rise to 13 percent or higher and will weigh on the economy for several years, countering government efforts to stabilize the banking industry, analyst Meredith Whitney told CNBC.
While Whitney raised her short-term outlook for banks, causing stocks to open in positive territory after pointing lower earlier, she said the long-term outlook for the economy remains murky.
Consumers will not be able to spend as they continue to lose jobs and credit conditions stay tight, she said in a live interview. The result will provide a vivid display of how critical housing and lending are to economic growth. Unemployment is currently at 9.5 percent but is expected to keep rising.
“We underestimate how much the whole economy is dependent on the mortgage industry, and that has to change,” Whitney said. “This is what happens when you delay the inevitable. We’re buying time here, but we’re not restructuring the economy.”
And she’s right. All the trillions of dollars in debt Obama has imposed on the American people, and with all of those trillions, he has utterly failed to do anything to fix the fundamental issues that broke our economy in the first place. In fact, he is now seeking to use the $700 billion in TARP money (which stands for ‘Troubled Asset Relief Program”) to hand out to certain small businesses. But don’t forget that the program was implemented to buy distressed assets from financial institutions, and NOT to buy political patronage.
Obama’s $3.27 trillion stimulus didn’t do anything to address the mortgage industry’s fundamental crisis, his 9,000-pork-project-laden $410 billion omnibus bill didn’t do anything to address the mortgage industry’s fundamental crisis, and now he is planning to pillage the one source of funds that were designed to deal with the things that actually created the economic crisis.
Meredith Whitney is bullish on Goldman-Sachs because sich the giant institution “will benefit from being a key player in a ‘tsunami of debt issuance’ by governments as they try to fill gaps in underfunded budgets.”
The Wall Street Journal article continues:
However, Ms. Whitney said her bullish view of Goldman is rooted in her overall bearish outlook for the U.S. economy and other U.S. financial companies. During an interview on the financial network CNBC on Monday morning, she said the U.S. unemployment rate could reach 13% and remain elevated beyond 2010, and that most banks likely aren’t prepared for prolonged joblessness at that level. The U.S. unemployment rate reached 9.5% in June. She said that bank stocks will be good buys in the short-term due to a robust mortgage business, but that the longer-term outlook for most banks was grim.
The suspicious person would wonder over the fact that Obama – who took more campaign money from the financial institutions that played critical roles in bringing us the economic crisis in the first place – is now preparing to massively reward those very same institutions.
But let’s forget about that, and focus on the far more terrifying news than mere Chicago-style political corruption.
Let us focus on the fact that, contrary to Obama’s bold assertions, things are not looking up. They are in fact looking down. And increasingly, it appears that things are going right down the toilet.
Now, given those two basic facts – Obama’s early prediction that his stimulus would hold unemployment to under 8%, and Meredith Whitney’s forecast of coming 13% or higher unemployment – what do you make of Obama’s statement:
Yet the stimulus package “is working exactly as we had anticipated,’’ Obama told CNN. “We always anticipated that a big chunk of that money then would be spent not only in the second half of the year, but also next year. This was designed to be a two-year plan and not a six-month plan,’’ he said.
How can this sound like anything other than the most transparent lie? And the lie of a man who has absolutely no idea what he’s doing at that. How can he so blithely pass over his total documented failure to manage the economy as he said he could? How can he so blithely pass over the coming black hole of unemployment that is just going to get worse and worse?
Our president is a fool who has been by far the most successful when he has counted on the foolishness of the American people.
Vice President Joe Biden recently said, “The truth is, we and everyone else misread the economy.” But that is not true at all. For one thing, it wasn’t “everyone” who issued the completely contradictory statements that 1) predicted that unemployment wouldn’t rise above 8% if we passed the stimulus; 2) said we misread the economy; and 3) said the stimulus package is performing exactly as anticipated. Only the Obama administration was so completely wrong, and so completely incoherent.
I’m no great economist, but I’ve been regularly predicting that Obama would totally fail to handle the economic mess that Democrats largely created in the first place. Republicans predicted that the stimulus would totally fail to create jobs even as it harmed our economy with stratospheric debt. CEO’s have gone on record predicting that Obama would bankrupt the country within three years if his agenda was implemented.
The unemployment numbers are truly terrifying, particularly if you realize that – with discouraged workers factored in as they were during the Great Depression – we are already at Great Depression levels of unemployment. For the record, the unemployment rate in 1930 was about where it is now. And we were when the unemployment rate was a full percentage point lower than it is today. Paul Craig Roberts, the assistant secretary of the Treasury under Reagan, said on January 12, 2009, “According to the methodology used in 1980, the US unemployment rate in December 2008 reached 17.5 percent.” We’re going down the drain, and all our federal government can do is play games with economic statistics to make things appear less bad than they really are. But what’s going to happen when it goes up yet another four percent from where it is now? And based on what factors will we be able to stop it at that level?