“We're calling this opening segment ‘Achieving Prosperity,’” he began. “And central to that is jobs. There are two economic realities in America today. There's been a record six straight years of job growth, and new census numbers show incomes have increased at a record rate after years of stagnation. However, income inequality remains significant, and nearly half of Americans are living paycheck to paycheck.”
His totally out-of-context reference to records clearly suggests that economic times are great, and he soft-pedalled the qualifier about income inequality. This narrative implies President Barack Obama has done a fine job on the economy and so electing his political heiress Hillary Clinton should be a source of hope, not dire concern.
As we detail below, despite Holt’s job-growth factoid, Obama’s recovery is the worst on record and getting worse. And even with the 2015 jump in incomes, Americans’ incomes are lower today than before Obama took office, while poverty levels and income inequality are higher.
The reasons for all this are the policies statist liberals, politically-correct progressives and their lamestream media cheerleaders have promoted for 60 years, culminating in a blow-out orgy since 2008.
Economic growth is the most important thing because it increases material human well-being and provides basic human needs such as food, clothing, shelter and health care, especially for our least fortunate and most needy people. Together with freedom, it promotes human flourishing, including education, arts and sciences, and the quality of life.
The “record” long job growth has produced only 1.15 percent yearly job growth since the end of the Great Recession, or about three-fourths of the long-term annual job growth rate.
More important, the economic growth rate during this recovery has been 2.1 percent and falling; the 2016 figure is 1 percent. The average economic growth rate across all recoveries from World War II to the Great Recession was 4.4 percent. Over a decade, a 4.4 percent growth rate means peoples’ incomes will be 39 percent higher than at a 1 percent rate.
Further, the labor market is leveling off, with hiring being slower than in recent years, labor force participation stuck at a 40-year low and many folks stuck in part-time work even though they’d like full-time employment. Business investment, which creates jobs, has been dreadful for two years, and corporate earnings are decreasing for the sixth consecutive quarter.
So, job growth has been slow and getting slower. At the same time, extremely low productivity growth has produced the worst economic growth and recovery on record despite the modest job growth. Why? As we noted last year in Nevada’s first Popular Annual Financial Report: Government excess is the prime reason.
Confirming our diagnosis and prescriptions, Harvard economist Robert Barro recently wrote: “What could have promoted a faster recovery by enhancing growth? … strong rule of law and property rights, free trade, rolling back inefficient regulations and other constraints on market activity, … fiscal discipline (including a moderate ratio of public debt to GDP), efficient taxation …”
In short, the main cause of our problems is the government excess the statist liberals have foisted on us on all fronts for about 60 years, capped by Obama’s blowout. The problem is all the destructive policies Hillary Clinton proposes to crank up further if she’s elected.
Holt’s claim that incomes have increased at a record rate? In just-released numbers that some experts question, incomes increased from 2014 to 2015 after years stagnating during Obama’s recovery. But more important than a one-time dubious increase is that median household income was higher at the end of the last two recoveries: 1.6 percent in 2007 and 2.4 percent in 1999.
Inequality and poverty? In a column earlier this year, we showed income inequality has increased more on Obama’s watch than any other since records were first kept on this matter 50 years ago. And the poverty rate is 3.3-million higher than in 2007.
When you know the facts and figures, Holt’s misrepresentations are glaring and inexcusable.
Ron Knecht is Nevada Controller. Geoffrey Lawrence is Assistant Controller