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Saturday, Jun 23, 2018
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Obama's puzzling plans for economy

In a series of new speeches on the economy, President Obama says his main interest is the defense of a middle class hit hard by recession, the housing bubble and dwindling opportunity. But his message is at times contradictory and his choice of statistics often confusing. It's unclear where he would take the economy if Congress were to follow his lead, which of course it won't. Five years after the start of the Great Recession, "America has fought its way back," Obama says, but quickly adds, "I'm here to tell you today that we're not there yet." So have we fought our way back or not?
The average American earns less now than in 1999, he noted. What he didn't highlight was that while inflation-adjusted median household income has fallen 8.9 percent since 1999, it fell 8.1 percent since 2007. That's not a period he chooses to emphasize. "We're off to our strongest private sector job growth since 1999," he says, but doesn't share insight into why the unemployment rate didn't improve at all from May to June or what is being done to make employers more confident about the future. Obama promised to "push new initiatives to help more manufacturers bring more jobs back to the United States," but also called for higher wages for the lowest-skilled workers. He didn't talk about the significantly lower wages in China and many other places that reward manufacturers that outsource production. It is hard to tell exactly what Obama is promising. His most consistent theme is that "no one who works full-time in America should have to live in poverty." He says that "if you're willing to work hard and discipline yourself and defer gratification, you can make it ." Or maybe not. Obama also correctly warns that America does not guarantee economic success. "In an age when jobs know no borders, companies are also going to seek out the countries that boast the most talented citizens, and they'll reward folks who've had the skills and the talents they need," he said. "Technology and global competition, they're not going away. Those old days aren't coming back." But he also seemed to be promising a return to the past. He promised to help rebuild our manufacturing base, but didn't mention Detroit, which has filed for bankruptcy protection. He envisioned new manufacturing innovation institutes that will "turn regions left behind by global competition into global centers of cutting-edge jobs." He didn't say if the people left behind will be the ones getting those jobs or how taxpayers should feel about helping cities and counties whose local leaders have been least adept at positioning their regions to compete. Obama promised to implement the new health care act but avoided talking about why he is delaying for a year the requirement that employers provide health care. He said that health care costs are increasing at a slower pace, but wasn't convincing in his suggestion that insurance in the future will be more affordable. According to the Milliman Medical Index, the average cost of health coverage for a family of four has gone up more than $1,300 a year for four years in a row. Obama clearly called for more spending for roads, ports and airports, but he didn't mention passenger rail, which a few years ago seemed to be his top transportation priority. He called for more infrastructure spending but did not advocate a higher tax to pay for it. He didn't mention the unprecedented financial stimulus the economy has been getting from the Federal Reserve's bond purchases, which have pushed interest rates to near zero. "Whatever executive authority I have to help the middle class, I'll use it," the president says. If there's effective action he can take on his own to get the country moving faster, the puzzle is why he has waited so long to get started.
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