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Saturday, January 30, 2016

Figments of Obama’s Imagination

GDP
Image by © Richard Levine/Corbis

Noah Rothman

The audience for President Barack Obama’s final State of the Union address was not the members of Congress in attendance. Nor was he talking to average Americans watching the spectacle on television. The president was instead speaking directly to the historians who would characterize his presidency for posterity. Obama’s address amounted to a warning. Who are you going to believe, he asked the nation; me or your own eyes?

Obama claimed the prevailing impression, that he had presided over seven years of near paralytic economic activity and that the world had become less safe for American interests, were both myths; figments of the overactive imaginations of his critics. Less than a month later, it seems pretty clear that it was the president who was imagining things.

Toward the end of his speech, Obama declared that the idea the United States was a declining power or that its influence on the world stage had waned was only so much “hot air.” To be fair, he was telling the truth; America remains the world’s preeminent power toward which the world still looks for leadership. Obama declined to note, though, that this was only an enduring reality because he had so spectacularly failed to alter that condition.
Obama spent his presidency seeking to ensure that his nation no longer led from the front but “from behind.” He looked toward Moscow to resolve intractable international crises, which invariably made every one of them worse. He alienated allies and sought to ingratiate himself with America’s adversaries, none of whom did anything but take advantage of the commander-in-chief’s naiveté. Obama has made the world safe for regional hegemony, and the globe’s aspiring regional hegemons are making the most of it.

This wasn’t the only reality Obama denied in this ill-conceived speech. The nation’s economy, too, was in not merely fundamentally strong but recovering at a rapid pace, the president claimed. “Anyone claiming that America’s economy is in decline is peddling fiction,” Obama insisted. The president accurately noted that the forces of global integration and the pace of automation have led to volatility in the labor market and, as a result, many are feeling displaced. That’s true, too, and there will always be winners and losers in a competitive market system. “All these trends have squeezed workers, even when they have jobs; even when the economy is growing,” Obama declared.

That is a humble nod toward reality while still holding firm to the idea that the nation’s anxious voters are still probably just paranoid. The problem not merely for Barack Obama, but for those historians on whom he was leaning, is that, when it comes to the recovery, America’s persistent fear of a backslide in the economic recovery is justified.

“Americans are feeling better about the economy right now, but they remain deeply worried about their longer-run prospects — retirement, student debt and, in particular, the ability of their children to find middle-class jobs,” observed FiveThirtyEight’s Ben Casselman upon diving into recent Gallup polling data.

Those fears are grounded in economic reality. Wages may have rebounded from the recession but they have been largely flat since 2000 after adjusting for inflation. A college degree, long the surest pathway to the middle class, is no longer such a sure bet. And a growing group of influential economists are arguing that the U.S. has entered a prolonged period of slow growth. Few economists would endorse [Donald] Trump’s plans for dealing with that stagnation, but it’s understandable that voters are looking for solutions.

Americans awoke on Friday to learn that economic recovery the president had been flogging to life remains barely responsive. “Gross domestic product increased at a 0.7 percent annual rate, the Commerce Department said on Friday,” read a dispiriting dispatch on America’s fourth quarter growth. Hang tight: it gets even more depressing. Reuters echoed sunny economists who noted that “inventories and mild temperatures” are “impediments to growth,” and that, minus inventories and trade, the economy grew at a still miserable 1.6 percent.

That explanation alone is enough to drive anyone who has followed the halting trajectory of GDP growth mad. “Gross domestic product shrank at a 0.7 percent annualized rate in the first quarter,” Bloomberg reported in May of last year, blaming the slump on “frigid winter temperatures” that similarly derailed economic expansion in the first quarter of 2014.

At a certain point, you can’t blame the weather anymore. At least, that attempt at exculpation shouldn’t hold much water. While the nation’s comfortable economists and political prognosticators declare that all is well, a pervasive sense of unease permeates the electorate. It has compelled nearly one-third of both Democratic and Republican primary voters to run racing toward radical figures who serve as a conduit through which they can channel their frustrations and fears. This is not normal American politics; it is a response to bitter division, stagnation, and incompetence. Comfortable and confident voters do not embrace revolutionaries.



Perhaps, when he leaves office and his legacy is no longer being forged in real time, President Barack Obama will admit that the nervous nation he led for eight years wasn’t as paranoid as he so frequently claimed.

Source>https://www.commentarymagazine.com/american-society/economy/figments-obamas-imagination-gdp/

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