The Conservative Edge

In some of my previous posts, I have likely mentioned the word “malaise” and the name “Jimmy Carter” in the same sentence. I have also been of the opinion that America is heading toward an economic freeze that will mirror that of the late 1970s. The reason for our stagnant economy is simple: we are led by the same sort of failed economic policies instituted by then-President Jimmy Carter and other Democrats.

I’m not the only one noticing the similarities. Former hedge fund manager and now talk show host Jim Cramer has written an excellent piece about a 21st-century malaise that is gripping American society. Cramer asserts that Carter’s infamous “malaise” speech sounds like something Barack Obama could have crafted. That’s not surprising. Both the former and the current President share decidedly anti-business, high-tax, big-bureaucracy ideals.

Here are some of Cramer’s remarks, as posted on Yahoo! Finance: “Malaise. The recognition that things are out of control and there is no getting better. The recognition that the president and Congress can’t create jobs and that we can’t stop the spill. The recognition that things are out of our hands. One true presidential historian/arbitrageur invoked the “pitiful helpless giant” speech, a true throwback, a miserable speech by Richard Nixon green-lighting the disastrous Cambodian incursion in order to defeat the indefatigable and ultimately undefeated North Vietnamese. Given our inability to subdue the Taliban, though, maybe the analogy’s not that off-base. It sure feels like we are stuck in a malaise and have been reduced to a pitiful helpless giant, hobbled this time by high debt, huge taxes, an anti-business agenda that is freezing job growth and an intractable economy.

To me, the coincidences are leading to what you see on your screen — a collective sense of ennui and ‘it isn’t worth it’ because things aren’t getting better, they are getting worse.”

Cramer further states: “This malaise, like the Carter malaise, starts from the top, although Carter’s speech was a thinly disguised attempt to blame the American people for the malaise and their unwillingness to sacrifice. I think it has to end at the top with a recognition from the president that jobs have to be created, uncertainty removed, the agenda shelved. He obviously has no intention WHATSOEVER of doing that. And I am not saying this as someone who favors or is opposed to Obama, I am saying it from the litmus I always use: Is something or someone good for stocks or bad? Obama’s bad.”

Cramer’s words are powerful, yet true. Americans were promised that the economy would be a priority. But the priority became, instead, the passage of liberal/leftist/socialist legislation, and subsequent growth of the federal bureaucracy. Financial reform, for instance, sounds great, but means absolutely nothing if Fannie Mae and Freddie Mac escape federal scrutiny. Health care reform sounds good too, but has caused uncertainty for many employers who fear the rising costs for providing employee health care plans.

So, the Democrats, led by Barack Obama, can continue to tax and regulate American businesses into submission, but there is one word that describes the result: malaise.

Apparently, the road to economic recovery runs through Washington, D.C. The federal government seems to be the only recipient of the “quick jolt” promised by Barack Obama and the leading Democrats in Congress. According to the Associated Press, the latest employment figures show that 390,000 government jobs were added in May, aided by temporary Census-related positions. This number far exceeds the 41,000 private sector jobs added during the same period. Furthermore, there were 35,000 jobs lost in the construction industry, 12,000 jobs lost in financial services, and 6,600 jobs lost in retail trade.

Is this what economic recovery is all about? The White House can try to take credit for some uptick in job creation, but the fact remains that the government is adding jobs at the expense of most other industries. It is also true that both the percentage increase in unemployment, and the length of time from peak employment, surpass those from every recessionary period since World War 2.

McClatchy Newspapers reports that the full-time federal civilian work force (except postal workers) is expected to top 2.1 million in fiscal year 2010. More than 560,000 new workers will be hired in the next four years. Moreover, average compensation for federal civilian workers increased nearly twice as much as for the private sector from 2000 to 2008. Their average annual compensation is $119,982, including earnings and benefits. This ranks federal civilian workers seventh among 72 occupation categories, behind only high finance, energy and company management professions.

The problem is, 98 percent of working Americans are not federal employees. While many people keep losing their jobs—incidentally, another manufacturer here in southwest Ohio closed, putting 57 folks out of work—there is a growing number of people who wonder why the government isn’t cutting back like every other employer.

The answer is relatively simple. The government keeps expanding because it keeps adding layer upon layer of services and programs, with commensurate increases in federal bureaucracy. It will soon get to the point at which our economy will grind to a halt under all of the new taxes, laws, and regulations. Companies trying to conduct business here at home will soon find an economic climate favoring government oversight instead of productivity. We may, by the end of Obama’s first (and hopefully only) term, revisit the economic malaise brought on by the Carter administration: double digit unemployment, high inflation, and escalating interest rates. Even if inflation and interest rates never reach those levels, economists aren’t expecting the job market to reach pre-recession hiring levels until 2015.

It comes down to this: if you want to prosper, get a job working for Uncle Sam. Otherwise, get ready for an extended rough ride.

I didn’t watch President Obama’s State of the Union address. That was no accident. I didn’t tune in for two reasons: first, I knew the speech would be extensively published and reviewed, so I wouldn’t be missing anything; second, I didn’t care to witness Obama’s lack of accountability (from himself, his party, and the media) in defaulting on his campaign promises.

It seems that Obama spent roughly two-thirds of his speech explaining what he intends to do about the sputtering economy. Of course, he is not the only one responsible for crafting economic policy. However, the Democrats have always campaigned on their economic expertise. They claim to know what it takes to either cure a recession or accelerate economic growth. Bill Clinton became President by affirming his plan to pull America from the mild recession of the early 1990s. Obama was no different in 2008. He vowed that his administration would give a “quick jolt” to the economy, and that lots of new jobs would be made as green energy technology flourished.

On January 27, 2010, after one full year in office, Obama promised that he would make job growth his top priority. This begs the question: if job growth was NOT a priority, then what WAS his top priority? And why has it taken so long for him to give attention to the American economy?

Sadly, there were priorities that Obama and the Democrats had in mind. Some of the highlights: in January of 2009, they slapped additional taxes on tobacco products; they decided the government should own General Motors; Obama felt the need to apologize to foreign countries for America’s previous behavior; the Democrats reneged on Obama’s promise of transparency as they tried to pass health care legislation without debate, discussion, or acceptance by the American people; Obama “called out” Glenn Beck and Fox News; Obama traveled to Europe to plead for the Olympics to be held in Chicago; Obama pocketed a million bucks for winning the Nobel Peace Prize. Those were just some of the items on the Democrats’ “to-do” list.

So, it becomes apparent that job creation never was a top priority. For all their self-proclaimed expertise, the Democrats do not understand that reducing unemployment is the key to economic recovery. Rebate programs like “Cash for Clunkers” mean nothing to people who are struggling to buy groceries or pay their mortgages. Obama’s chastisement of “fat cat” bankers may make us feel good for a while, but feelings don’t pay the bills.

Let’s hope that Obama and the Democrats really do get serious about fixing America’s economic problems. If they do not give heed, there will surely be more losses for the Democrats in upcoming elections. And they won’t have anyone to blame but themselves.