In his recent State of the Union speech, Mr. Obama stated that “Two years after the worst recession most of us have ever known, the stock market has come roaring back. Corporate profits are up. The economy is growing again.”
So explain to me again when it was that the Democrats and the Obama Administration in particular suddenly became capitalists? Let’s take a look at not-so-ancient history, back only about 10 years or so. What happened in the last major recession, and how did Democrats react to it?
The Dow Jones Industrial Average hit a record high in October 2000, closing at 11,850.61. Then came the recession of 2001; the Dow dropped, closing at a low of 8,235.82 after the 9/11 attacks. The Dow continued to drop on threats of war in the Middle East, closing in October 2002 at 7,286.27. In total, the Dow had lost over 4,000 points.
In 2003 the Dow began to climb again. Threat of war receded as the actual war in Iraq began. (Markets hate uncertainty.) The years 2003-2004 ushered in the recovery from the start of the 2001 recession. On 31 Dec 2003, the Dow was back at 10,453, up just shy of 3200 points from its low the previous October.
So, back in 2003-2004, as the US was recovering from its first economic downturn in ten years, the outlook should have been rosy. Cleary, the stock market was bouncing back, corporate profits were on the rise, and the economy was growing again, right? Except, back then, George Bush was president. And no, things weren’t so rosy. Unemployment remained stubbornly high, reaching 6% in June 2003. The Democrats? Far from saying that things were up, cited the unemployment figures and dubbed it “the jobless recovery.” No, things were not better. Things were bleak.
So here we are in 2011 at the State of the Union. Happy days! The Dow is up! From a high in Oct 2007 of 14,164.43 to a low of 6,694.44 on 5 March 2009, the Dow lost over 7,000 points. But by the SOTU, it was back up to 11,871.84, higher than its record high in October 2000, up over 5000 points from its low in 2009, and only about 2300 points from its all-time record high. Yes!
Additionally, corporate profits are up, setting record highs in fact. Yes! Democrats have a lot to crow about, it seems.
And yet, unemployment remains high at 9.4% in December 2010. True, that is less than the high of 9.9% back in April, and down some from the 9.8% rate in November. But if the economy is roaring, and the Dow is climbing, and corporate profits are hitting records not seen since such numbers were first collected in the 1950’s (which were pretty good times for business too), then one has to ask, “where’s the jobs?”
When the Republicans were in power back in 2003-2004, and were crowing about the recovery, the papers called it “the jobless recovery;” and that was with unemployment “all the way up” to 6%. Here we are in 2011and the Democrats are crowing about the recovery with the unemployment rate still at 9.4%; how come the media isn’t referring to this as a “jobless recovery?” Instead, Mr. Obama claims to have “broken the back” of the recession, and all the media can do is gush and heap glorious praise on him.
I guess what’s good for the goose isn’t necessarily what’s good for the gander. Or put another way, in the media, what’s bad for the Republicans isn’t necessarily bad for the Democrats.
To be sure, Mr. Obama’s mention of the stock market and corporate profits was short. He went on to explain all the government has done for us to make economic recovery possible, and everything that he plans for government to do for us to ensure economic bliss in the future.
American’s paychecks became a little bigger this year, not because they were making more money, or because the economy was doing better, but because “Santa Sam” (or should that be “Obamaclaus”) slipped a little bit extra in there by decreasing the amount they were taking out. As tax cuts go, this one was a first; a decrease in the Social Security withholding , allowing Americans to keep 2% more of what they earn. Wasn’t that nice of them?
On the other hand, haven’t we been hearing that Social Security is in trouble? Last year, Social Security paid out more in benefits than it received in payroll taxes – a threshold it was not expected to see until at least 2016 at the earliest. Doesn’t seem to me like a good time for us to start raiding the piggy bank. Sounds to me more like robbing Peter to pay Paul; sticking yet one more finger in the financial dike and hoping against hope that it doesn’t spring any more leaks. We are running out of fingers; we don’t even have enough left to keep two crossed behind our back anymore.
Of course, in order to benefit from the cut in the payroll tax, one first has to be drawing a paycheck; 9.4% of Americans out there are not. Indeed, the 9.4% unemployment rate, reported by the government, is perhaps, dare I say it, a conservative figure. It is based on figures for people drawing unemployment while trying to get jobs and does not take into consideration people who have quit looking, whose benefits have run out, or those who are employed but in a part-time status. There are those who claim that the actual percentage of people who are unemployed is higher; much higher.
At least those part-time workers will benefit from the cut in payroll taxes.