It's Confirmed - Poor Economy Due To Obama Policies

Discussion in 'Politics' started by pspr, Feb 3, 2013.

  1. pspr


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    President Obama blames the surprise fourth-quarter drop in economic output on Hurricane Sandy and political factors.

    But new evidence shows his own policies may be responsible for the first real GDP contraction since the Great Recession.

    While it's no secret ObamaCare and sweeping new financial regulations have set corporate America and small businesses on edge, the level of anxiety and its impact on the economy have been hard to quantify.

    However, a valuable new economic indicator measures both.

    The latest data from the U.S. Economic Policy Uncertainty Index, assembled by University of Chicago and Stanford economists, reveal business angst over government action at "extremely elevated levels" compared with recent history.

    And it's costing the economy trillions of dollars in growth and millions of new jobs.

    A surge in the index, which tracks policy uncertainty back to 1985, typically foreshadows a decline in business investment and economic growth and employment.

    As the index has shot up almost 30% over the past 12 months, business investment in new plants and equipment has slowed to pre-recession levels.

    In fact, year-over-year growth in real nonresidential fixed investment decelerated in the last three quarters of 2012, plunging from a first-quarter peak of 12.5% to 9.7% to 4.6% to 4.3% in the final quarter, according to Commerce Department data. A similar braking occurred before the last recession.

    Scott R. Baker, a Stanford Ph.D. economist and researcher who helps run the index with economics professors Nick Bloom and Steven J. Davis, explains that U.S. companies are increasingly wary of new tax and regulatory policies coming out of Washington and are shelving expansion plans.

    He says there's been a "structural shift" in uncertainty under the Obama administration.

    "We've definitely seen a big increase in uncertainty about health care and financial regulatory regimes and energy and climate regulations," Baker told IBD during a recent interview in Palo Alto, Calif. "And this certainly is harmful to a recovery."

    Amid the rising uncertainty, corporate executives say they're delaying big projects.

    In the tech sector, for example, Intel, Texas Instruments and Apple all recently announced they're cutting capital spending or shelving expansion plans.

    Uncertainty has also stymied investment in the energy sector.

    "We're in talks with the chief economist for a big Southern power utility company, where they're trying to decide whether to build a natural gas plant or a coal plant or a nuclear plant," Baker said. "And it's unclear if there's going to be a carbon tax, if there's going to be cap-and-trade, if there's going to be more regulations on fracking, or more regulations on coal.

    "And so like most businesses, they're trying to weigh all these options to decide what to do," he added. "And a lot of what they're doing is just, basically, wherever they can push off a decision, they do."

    Baker figures the cloud of policy uncertainty hanging over the business community has stunted real GDP by 3.2% and employment by 2.3 million jobs.

    Tax and regulatory head winds are also slowing growth.

    A crush of new business-threatening red tape has poured out of the Obama administration since 2010 with the enactment of ObamaCare and the Dodd-Frank Act.

    Not since the New Deal has the economy been hit with such a regulatory whammy.

    To avoid costly health mandates targeting firms employing 50 or more full-time workers, many smaller employers have capped hiring, while large restaurant chains have reduced worker hours.

    Bankers hit by new Dodd-Frank rules complain the financial crisis has been replaced with a "regulatory crisis" that's frozen capital for all industries.

    "The regulatory agencies have hundreds of major new rules to write," American Bankers Association President Frank Keating complained in a letter to the White House. "With so much uncertainty, no bank in America today can develop a rational business plan."

    He added, "We are being frozen in place by increasingly dangerous regulatory minefields."

    He notes that bank examiners deployed by the new Consumer Financial Protection Bureau have joined examiners from other federal agencies to crack down on banks for fair-lending and other regulatory violations.

    The overlap means banks are now being scrutinized — and potentially investigated — by several different agencies for the same practice, which Keating says unnecessarily hikes bank compliance and legal costs.

    According to the Competitive Enterprise Institute, the total annual cost of business compliance with federal agency-written regulations now stands at more than $1.8 trillion — a figure that will only climb as more ObamaCare and Dodd-Frank rules are implemented over the next few years.
  2. Lucrum


    Poor economy? I thought our resident Obama ass kissers said the economy was doing just fine?
  3. The latest data from the U.S. Economic Policy Uncertainty Index

    That's a hoot. "Uncertainty" index.

    Stay tuned for the U.S. Economic Policy bewilderment- confusion- distrust- Index.
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  5. pspr


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    I guess I should have included this chart with the article showing business investment contraction. Plus, we all know that the 4th quarter 2012 GDP was just reported as having slipped into negative growth at -0.1%.

    And if our Obama waterboy wants to talk about someone who isn't running the government let's see what that person had to say about what should be done vs. what has been done economically.

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  6. Tsing Tao

    Tsing Tao

    AK47's job chart has been refuted so many times it's not funny, yet the yambag continues to use it as proof.
  7. Lucrum


    yep, it's all the kid has. clinging to bull shit.