When President Obama was asked recently what he wants to be remembered for, he quickly answered that it would be as the savior of the American and global economies.
“There are things I’m proud of,” he said, citing Obamacare, then added, “Saving the world economy from a Great Depression, that was pretty good.”
The economy was in free fall when he took office, and he’s been boasting for seven years that it isn’t any more. But no one worried that free fall would last forever. The real question was how long it would take before it bottomed out and bounced back.
The American economy grew at an annualized rate of only half a percentage point in the first quarter of this year, it was announced Thursday. This is bad news for Obama’s legacy and for Hillary Clinton, running for her former boss’s third term. It is certainly a strain to see it as vindication of Obamanomics after six years of stimulus, pump-priming and stagnation.
And annual rate of 0.5 percent growth means absolute growth between New Year’s and March 31 was actually closer to a tenth of a percentage point. Another way of looking at it is that the entire economy grew at one thousandth — not much to cheer about for voters paying higher taxes than they did when he arrived in office.
Thursday’s numbers suggest yet again that Obama will end eight years in office without presiding over a thriving economy of the sort America enjoyed in the past. It also suggests that even the mediocre growth of recent years depended on high oil prices, which have collapsed by more than half.
This is the bitter fruit of creationist economics, the erroneous belief that government activity can somehow conjure new wealth and value.
Obama clings to the belief he brought with him into office, that he can legislate and regulate economic activity into existence. He promoted and signed a much-touted stimulus law that gave taxpayers’ money to items on a Democratic wish list and to well-connected businesses, while doling out microscopic tax refunds to some workers. Beyond that, Obama’s economic policy has consisted of imposing greater burdens on business in the form of labor rulings, environmental regulations, and mandates that increase the cost of job creation.
Higher minimum wages, new mandatory health costs, obligatory paid leave, and new powers for corrupt labor unions all hamper economic growth. For workers to get a larger piece of pie, the pie must grow. And right now, it is growing by only five thousandths per year.
Reasonably low business taxes and lighter regulation are not sufficient to produce a robust economy, but they are necessary. The Obama era has proved a painful reminder that big government cannot lift them up, but it can certainly chain them down and keep them struggling.
