Obama’s Policies Caused Greatest U.S. Wealth Decline in Decades

Barack Obama has so humbled American finances and destroyed the average family’s wealth that even the mainstream media can no longer cover up his dismal record. Today’s issue of the New York Times ran a featured story entitled, “Recession Officially Over, U.S. Incomes Kept Falling.” The story highlights a study by two former Census Bureau officials, Gordon W. Green Jr. and John F. Coder, which found Americans have lost more wealth under the Obama administration than in the midst of the recession under George W. Bush. Altogether, the recession and Obama’s policies created the largest reduction in the American standard of living in decades. (Read the report’s major findings here.) Obama’s policies have inflated store prices, debased the dollar’s purchasing power, and led to a glut of unemployed who are not drawing a paycheck. However, government workers suffered the smallest income drop, meaning Obama’s policies encourage government dependence and a further spiral toward economic catastrophe.

According to the article, economists agree the recession, which is defined as two quarters of negative economic growth, began in December 2007 and ended in June 2009. The NYT reports, “The full 9.8 percent drop in income from the start of the recession to this June — the most recent month in the study — appears to be the largest in several decades, according to other Census Bureau data.”

The Times data make clear two-thirds of this wealth loss occurred during the reign of glorious King Obama and is attributable to the intended or foreseeable outcomes of his policies. While the inflation-adjusted median income fell 3.2 percent during the recession, it has plummeted 6.7 percent since June 2009, to $49,909. Two factors, the Times reports, made this slump in buying power possible: prolonged unemployment and inflation.

The article relates the greatest drivers of inflation are “the prices of oil products and many foods.” Yet increasing these costs was the result — often the deliberate aim — of Obama’s policies. On the 2008 campaign trail, candidate Obama told the editorial board of the San Francisco Chronicle, “under my plan…electricity rates would necessarily skyrocket,” and as president he has been as good as his word. His Science Czar, John Holdren, has written of the benefits of shrinking  “GDP per person,” a position shared by the Soros-founded and -funded Institute for New Economic Thinking (INET). The president has unilaterally ended oil drilling in the Gulf of Mexico. He has declared war on the coal industry. He declared the EPA would regulate carbon dioxide as a pollutant, a move that heavily burdened the energy industry, although the agency has thankfully failed to come up with a plan to do so. Food prices have risen as the Obama (and Bush) administrations pushed credits into the development of ethanol and other “green energy” sectors, a cornerstone of Obama’s utopian jobs policy.

This overlooks the fact that even the modest, jobless growth was purchased with multiple rounds of “quantitative easing,” which is by definition inflationary.

The results have been ruinous. The Consumer Price Index has risen 12 of the last 14 months. While all costs are up 3.8 percent since last year, gasoline and fuel oil have increased by 32 and 35 percent, respectively. The Producer Price Index doubled from August 2010 to April 2011 and edged yet higher this summer. Despite all this, the president told employers in February not to worry about inflation, because “we’re not seeing a broad-based inflation trend.”

While American purchasing power has fallen, their incomes have dipped thanks to workers spending longer period on unemployment. The Times adds:

In the recession, the average length of time a person who lost a job was unemployed increased to 24.1 weeks in June 2009, from 16.6 weeks in December 2007, according to the federal Bureau of Labor Statistics. Since the end of the recession, that figure has continued to increase, reaching 40.5 weeks in September, the longest in more than 60 years.

The reason could not be simpler: unemployment benefits have been extended to their longest rate in history, and extending benefits extends the length of time people spend collecting them. James Sherk of the Heritage Foundation has noted extending “benefits to 99 weeks increases the time the average worker spends unemployed by five to 11 weeks.” Longer benefit cycles also extend wage and career rigidity, stalling a market adjustment.

Nonetheless, Obama attempts to extend these disastrous policies. In fact, his most recent “Jobs Bill” would extend unemployment benefits longer.

As stark and striking as this coverage appears coming from the prestige media, the newspaper somewhat  soft pedals the report’s harsher conclusions. “Real median annual household income has fallen significantly more during the economic recovery period from June 2009 to June 2011 than during the recession,” they write. “A decline of this magnitude represents a significant reduction in the American standard of living.” The report, which tracks income month-by-month, found that the Household Income Index (HII) reached its lowest level in May 2011, the month before their study ended.

The hard times have not been evenly distributed. Green and Coder break down the results, showing that government sector employees lost the least money (3.9 percent). While private sector employees declined 4.3 percent, the self-employed suffered a devastating 12.3 percent decline. Interpreted, that means those most dependent on the government did the best, and those least dependent on the government for their livelihood fared the poorest. This assault on independence and self-sustainability has created a new renaissance of government dependence, by chance or design.

Green and Coder also provide an ethnic breakdown. While non-Hispanic whites have the greatest net wealth, Hispanics’ income declined the least. American blacks, the demographic that most supports Obama, has suffered the most from the Obama recovery.

While presented amidst its typical pro-Obama spin (The recession began under Bush and ended under Obama! He has a “jobs bill, which includes tax cuts that would raise take-home pay”!) the New York Times has been forced to report on the dire state of the economy. However, it omitted both the causes of our new American dénuement and the bleak future Americans face if Obama has his way.