This administration is entering uncharted territory in terms of its failure of policy for economic growth. In fact, most of what passes for policy, such as Obamacare, the Dodd-Frank bill, and various regulatory initiatives has been destructive to job growth, while Federal Reserve monetary policy continues to misallocate and pervert the pricing of capital. Recent decreases in the unemployment rate are almost entirely the result of decreases in the labor participation rate, which is the lowest in 30 years. Moreover, more than half of recent job increases have been in the low paying restaurant and retail sectors, and approximately 20% of jobs added since the end of the recession in 2009 are part-time.
Much of the problem is structural, involving major deficiencies in elementary and secondary education which are well-documented and highly resistant to reform and which have resulted in huge gaps in the skills necessary to fill the jobs that are available. But the most significant impediment is that this administration is unwilling to do what is clearly necessary to initiate growth. It’s all about redistribution and President Obama’s central focus on spreading the wealth as opposed to creating more of it.
No doubt, the Republican opposition needs to do a much better job in defining the alternatives, including a more robust defense of free market principles, and much of this argument is a moral one. For example, in the 2012 Presidential campaign, the Romney team did a terrible job of responding to attacks on Bain Capital and its business practices, which amounted to a full scale assault on the underlying logic and morality of capitalism itself. This should be confronted directly and with confidence in the underlying principles, but it is more than an economic efficiency argument, it is a moral one, based on enterprise and opportunity for all, and should be argued on that basis.
Meanwhile, until a debate on this level is fully engaged, the Obama administration is well-suited for a “do nothing but repeal” Congress, because the alternative is to validate, entrench, and sustain a progressive agenda which is wrong for the country.