January 14, 2015--It's Not His (Obama's) Fault

My Florida friend Henry is counting the days until the end of the Obama administration.

"Only 664 to go. Days," he said jauntily the other day. "When I checked this morning on the Obama Countdown Clock that added up to 15,959 hours or 957,393 minutes. None too soon for me."

"You're pretty serious about this," I said. "I know you haven't liked him from the beginning but now you really seem to hate him. You're a smart guy otherwise, so tell me why you do."

"He's screwed everything up. In the Middle East, in race relations (and you know I'm not a racist), and especially the economy."

"The economy?" I couldn't let him get away with that. "I know you can't stand Obamacare and what you claim it means to you as a small business owner--though as I've pointed out to you through the years it's actually good for you with your staff of less than ten. But isn't the rest of the economy in pretty good shape exactly a week short of his having been in office six years?"

"Good shape? With so many still employed, salaries of middlc-class workers not growing, and all those young people still without jobs or underemployed?"

"Much of that is true. Things are far from perfect, but what do you say about his list of accomplishments--starting with gas prices. Aren't you impressed that that gas-guzzling pickup of yours is costing you at least $1,000 a year less to gas up than it did two, three years ago? You were blaming Obama for high gas prices then so does he get some credit now that they're lower?" He didn't respond.

"And what about your favorite--the stock market? When he took office it was languishing. But yesterday the S&P 500 Index closed at 2,023. That's a 145% percent increase. Not bad, yes? And a big deal for middle-class workers who have much of their retirement savings in stock funds. Does Obama get any credit for that?" Fiddling with his coffee, Henry didn't respond.

"And unemployment? The rate last week dropped to 5.6%, the lowest since 1999, the last year of the Clinton presidency. What do you think about Obama's role in that? You didn't hesitate to blame him when it was much higher so now that it's significantly lower, what do you think?" Again he ignored me.

"Then your actual favorite--inflation. You remember how five or six years ago you were touting Peter Schiff as your economist of choice who was predicted that because of Fed and Obama fiscal policies inflation would soon be at Weimar Republic levels and you were buying gold to protect yourself from the sky falling? How's the inflation rate looking to you now at 1.3 percent? These days we're actually worried about deflation. And how's your $1,900-an-ounce gold doing? The last time I checked it was way off its panicky peak and was selling for only $1,240 an ounce. And what's Schiff peddling these days? Not anything positive about the Obama Economy I suspect." More silence.

"I could go on but these are a few highlights which could also include low interest rates, a stronger dollar, how the deficit has been cut by more than a half--from $1.4 trillion annually to $514 billion-- and how America is becoming energy self-sufficient. So I guess this means you hate Obama for other reasons. Enlighten me. I'm willing to say you're not a racist, but what is it then?" He stared at his watch and said he needed to run. He had a meeting he needed to get to.

After he left Rona and I continued the conversation. She said, "One of my favorite things besides conservatives refusing to give Obama any credit for the improved economy is their explanation about why it's better. That they can't deny--that's it's better."

"I know where you're going with this."

"First, all of a sudden the leading Republican candidates for the presidential nomination are expressing concern about inequality and the plight of poor people."

"I saw that even Mitt Romney is. The same Mitt Romney who two years ago was moaning among rich people in Boca Raton about the 47 percent of Americans who are the 'takers.'"

"And then there was new Republican senate majority whip John Cornyn on Morning Joe two days ago ignoring the question about Obama's role in improving the economy while claiming that the reason things are better is because business leaders, when they saw the Republicans were about to take control of both houses of Congress, began to hire people. He suggested it was a sort of Mitch McConnell bump."

"This is so preposterous--the economy began doing better six years ago on the first day Obama took office and now Republicans are claiming that the good news is the result of the election in November, all of two months ago. I love it."

It was by then time for us to go. "One more thing," Rona said. "Is there really an Obama Countdown Clock?"

"Indeed there is. You can look it up on the Internet. In fact, you can even buy one."

"Amazing."

November 12, 2104--It's the Middle Class, Stupid

I promise--these will be my final comments about last week's midterm election.

My conclusion--It wasn't the economy, stupid, but the middle class.

The two are entwined, of course, but to understand what happened last Tuesday it's important to think about the economy from a middle-class perspective. This is especially true for Democrats if they, in our lifetimes, are to do better at the congressional and gubernatorial levels.

This time around, tactically, in campaigning, Democrat candidates avoided talking about the economy. This was part of their strategy to run as far away as possible from the unpopular president. The little Barack Obama said during the campaign season--again at Democrats' urging--was about how the economy was improving: unemployment was way down, the annual deficit during his first six years was more than cut in half, and the national debt was growing at a significantly reduced rate.

But if you have a job or are working two or three just to stand still, it doesn't excite or motivate you to learn that someone else, who had been unemployed, now has a job. And that person who now has a job might not be that enthusiastic either. He could be working just 20-30 hours a week, receiving no benefits, and earning only a little more than he would receive from various forms of public assistance.

So, very few in real-life situations are impressed economically, emotionally, or politically that the unemployment rate is down a percent or two. In fact, many don't even believe the numbers since they come from the government and are thus suspect. Because it has been a wageless recovery, what they are experiencing is their own precarious, deteriorating financial situation.

If you were in similar circumstances, what would you care about--the unemployment rate or your household's's bottom line?

Even more, who really cares other than theoretically about the deficit and the debt? This may sound cynical but, again, to people struggling with their own debt what's more real--what the government owes or their mortgage?

Those in the middle who are being squeezed hard--with everyone in the family working--may not know the statistics but they do know their earnings for more than a decade have not even kept pace with rising prices. They feel themselves working harder but slipping further and further behind.

And they are right.

The numbers support that perception. Since Barack Obama assumed the presidency, median inflation-adjusted middle-class income has declined. Last year it was $2,100 lower than it was in 2009. And lower still by $3,600 since 2001 when George W. Bush took office.

Blaming the government, especially those seemingly in charge (Obama and the Democrats, not Bush), is one way to deal with what has been happening to the middle class. They thought they were playing by the rules and that the miracle that has been the American economy would reward them or, more likely, their children. That trust has been betrayed.

Not to talk compassionately about this, as the Democrats didn't, not to focus all their progressive energy on the plight of the shrinking middle class, which they also didn't do, is not just politically ruinous but morally questionable.

It is hard to think what to suggest about this sad situation. What policies, what programs beyond empty promises would make a difference for the middle class? What evidence is there that any realistically realizable government policy might make a positive difference? Perhaps a middle-class tax cut? Anything else?

If true, then at least Democrats should take yet another lesson from Bill Clinton--figure out how to notice and feel people's pain and stop telling people what's good for them.