Presidential Hijinks Stink

Last week President Obama donned his cheer leading outfit, fetched his pom-poms and began turning somersaults over the latest jobs data. The fawning media applauded the stunt and duly reported that the economy is recovering. Apparently, the President and his lapdogs believe you really can fool all the people all the time.

In his role as Cheerleader in Chief, the President used the media megaphone to shill the Labor Department report that showed employment rose by 431,000. The number is about as real as a $3 bill with Elton John's picture plastered on the front. The stock market reacted by falling more than 200 points. So much for good economic news.

To understand the market's decline, all you need to know are two facts. First, all but 41,000 of those 431,000 jobs were created by the federal government. Most were temporary census workers. Secondly, the unemployed are facing the longest wait on record to find work. There just aren't enough available jobs because the private sector isn't hiring. In fact, last week brought fresh news of more corporate layoffs.

That means things are unlikely to get better anytime soon. The economy will have to grow at an annual rate of 3.5 percent for three years to recoup the 8 million jobs that have been lost since the recession began. No self-respecting economist has predicted growth anywhere near that level. Even the optimists in the Federal Reserve are now saying that employment will remain at nine percent or higher until perhaps the end of 2011.

It is time for the media to pronounce the administration's economic stimulus and job plans a total and utter failure. The billions spent to reinvigorate the economy have been wasted on pork projects with no economic benefit. To make matters worse, passage of the Health Care Reform Bill further stalled plans for hiring and business investment because of the uncertainty over future costs.

Meanwhile, consumer spending has sputtered along. It once was the country's economic engine, accounting for 70 percent of spending. However, nothing makes consumers feel "poor" like layoff worries, sinking home prices and a falling stock market. Americans won't be opening their wallets until there are improvements in all three areas, which are critical to consumer confidence. When home prices were skyrocketing, the stock market was soaring and jobs were plentiful, consumers felt "rich," even if their bank accounts remained the same.

As bad as things are on the job front, the home market looks even worse. With the home buyer federal tax credit expired, sales will likely tank. Already, there are signs of a major pull back in sales contracts, according to experts. And more than one-third of this year's sales have been so-called distressed homes selling at deep discounts. Typically, these homes have been taken over by banks or the owners have sold because they are unable to make payments. That has impacted prices for sellers who want to move up, causing them to rethink their decisions. One real estate analyst firm, Core-Logic, predicts the market will continue to fall with next February's prices lower by 4.2 percent.


Meanwhile, the number of bank failures in the country keeps rising. To date, regulators have seized the assets of 78 banks. Bank closures are expected to peak this year, but you have to wonder. The feds closed 140 banks last year. At the current pace, bank failures could eclipse last year's number, considered the worst since the Great Depression.

Instead of trying to whip up enthusiasm for the tepid economy, the President needs to do something more than symbolism. He could start by rescinding the onerous Health Care Reform Bill. Then he should announce tax incentives for hiring and research, followed by a reduction in the federal red tape that adds to the cost of doing business.

Of course, none of this will happen. The President refuses to come to grips with the reality of the economic slide. The country is more likely to see Elton John's picture on a greenback than real economic reform.