Quote of the Day:
When did Americans decide that 1% or 2% economic growth is acceptable, that puny wage increases are inevitable, and that we should all merely shrug and get used to the country’s diminished expectations?
–an editorial in the Wall Street Journal
The Wall Street Journal editorial comments on the collective shrug that has greeted yesterday's report that the U.S. economy grew by 0.5% in the first quarter of 2016. Americans, who once expected more, now seem resigned to poor economic growth. The editorial notes:
No worries, mate. Isn’t the first quarter always lousy? We’re told the job market is strong enough, growth will perk up the rest of the year, and the Federal Reserve is on hold. The White House issued its typically upbeat GDP analysis, with the only discouraging word being that “even with the solid growth in recent years, there is room for further expansion.”
President Obama didn’t comment on the first quarter, but the New York Times rolled out an interview with him Thursday, part of a larger apologia for his economic record, in which he offered this beauty: “I actually compare our economic performance to how, historically, countries that have wrenching financial crises perform. By that measure, we probably managed this better than any large economy on Earth in modern history.”
Mr. Obama has already compared himself favorably to every President except Lyndon Johnson, FDR and Lincoln, so why fake humility in his home stretch?
We are going through the weakest recovery, if that word is even applicable, in the post-war period. Although the second quarter looks better (but not much), we've seen a decline in private investment and consumer spending (showing, despite cheap gap). What do these declines reflect? A lack of growth in future growth, the Wall Street Journal says.
And this lack of faith is well-justified. Americans are encouraged to accept low growth as normal:
. . . Americans are supposed to accept this as the new abnormal that no one can do much about. As Kevin Warsh notes nearby, the latest excuse is to blame slow growth on the rest of world. So America would be booming if not for China, which would be booming if not for Europe, which blames Japan, which blames America.
This is more convenient than questioning their economic policies, which with few exceptions have been similar since 2008. First blowout government spending, followed by record-low interest rates and unprecedented central-bank bond purchases, along with ever-tightening regulation across the private economy. The result has been what even Bernie Sanders and Bill and Hillary Clinton have conceded on the campaign trail are declining economic prospects for millions of Americans.
As for Mr. Obama’s financial-crisis excuse, how many more years can he dine out on that one?
But Americans aren't persuaded that policies that produce almost no growth are the best–which is one reason Mrs. Clinton should worry.
As a former member of the Obama administration, she can't say what an awful economy we have. But Bill Clinton is saying it for her, and that is why we have seen him talking about how bad the economy has been for the last seven years.