Ripping Obama for No Executive Experience

by John M. Curtis
(310) 204-8700

Copyright June 6, 2012
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             When the Bureau of Labor Statistics reported a bump up to 8.2% in the nation’s unemployment rate Friday, June 1, the Romney campaign got the red meat needed to indict President Barack Obama.  That same report indicated the nation added only 69,000 non-farm payroll jobs, far less than the expected 125,000 to 150,000 wished for by labor economists.  Speaking on ABC’S “This Week” with George Stephanopolous, Romney campaign advisor Erick Fehrnstrom blamed the bad news on Obama’s lack of executive experience, citing GOP presidential nominee former Massachusetts Gov. Mitt Romney’s wealth of executive experience as Bain Capital’s CEO and Massachusetts governor.  Only one small problem:  Obama’s GOP predecessor, former President George W. Bush had about the same “executive” experience as Romney, spending his years before the White House as a CEO and Texas governor.

            Prone toward hyperbole, Romney seeks any economic bad news to indict Obama for misguided policies, like promoting a national infrastructure rebuilding that would create thousands of construction-related jobs.  With Congressional approval ratings at 14.8%, Obama campaign official Stephanie Cutter pointed fingers at Congressional Republicans that have blocked national infrastructure legislation.  When Obama campaigned in 2008, it was easy to paint a big target on Bush whose economic policies led to the biggest recession since the Great Depression.  Former Fed Chairman Alan Greenspan was quoted at the time calling the 2007-2008 financial meltdown as the worst financial panic since 1907.  That economic meltdown led to the creation of the Federal Reserve Act in 1913.  Expecting Obama to completely reverse the Great Recession of 2007-08 in four years was unrealistic.

            Obama’s approval ratings, now dipping below 48%, are directly tied to fluctuations in the stock market, now selling off Friday 274 points, closing the Dow Jones Industrials at 12,118, 900 points down from its Feb. 21 high of 13,000.  Obama finds his political fortune tied to global financial conditions beyond his control, especially problems in the Eurozone.  With Greece teetering on leaving the Eurozone, it’s thrown global markets into a tailspin, including the recent 900-plus sell-off in the Dow.  What’s a lack of executive leadership have to do with today’s global economic problems?  Talking about Mitt’s success at Bain Capital, running the Salt Lake City Winter Olympics or as Massachusetts governor has nothing to do with today’s economic problems.  If you really analyze the BLS report, the disappointing jobs report has more to do with a loss of government jobs than anything else.

            Romney’s economic plan calls for a major contraction in the federal workforce, potentially causing a sharp jump in unemployment.  Because Mitt’s sworn onto GOP Party boss Grover Norquist’s “no tax pledge,” he can’t generate tax revenues without increasing private sector unemployment.  Romney subscribes to the old “Supply Side” theory that states when you cut taxes you stimulate jobs growth, Gross Domestic Product and reduce budget deficits.  Only one minor glitch:  Budget deficits rose quickly during the Reagan years [1981-1988], starting about $60 billion in 1981 and ending with $252 billion in 1988, over 400% increase.  Government employment and public works projects were always an essential part of the U.S. economy.  Government employees—federal, state and local—are an integral part of the nation’s GDP, spending untold millions into the consumer economy.

            May’s jobs report showed a net loss of 15,000 government jobs.  If Congress passes a national public works bill, today’s unemployment rate would be reversed from its current 8.2%.  Surveys from publicly traded companies show that hiring managers are reluctant to add more full-time jobs when they can’t anticipate future demand for goods and services.  When the stock market sells off, it crimps companies’ ability to hire new employees.  Hiring began to rise after the stock market showed a strong upward direction in 2010.  Whether it’s a Democrat or Republican in office, a bullish stock market is necessary for future hiring and eventual drop in the unemployment rate.  Romney knows that Obama can’t control what happens in Europe, currently the biggest drag on the U.S. stock market.  Fears over Greece’s exit from the Eurozone have added to U.S. stock market volatility.

            Obama’s lack of executive leadership has nothing to do with today’s economic malaise that has the stock market stalling because of problems in the Eurozone.  If the Eurozone figures out how to fix its problem, the bulls will once again start charging on Wall Street.   As the market rises, hiring managers will start adding to payrolls, cutting U.S. deficits and increasing the nation’s GDP.  Whatever happens in Europe, slashing government jobs is the surest way to a double-dip recession in the U.S.  Unless Romney says otherwise, his economic plan promises to slash government jobs, jump the unemployment rate, balloon the deficit and drop U.S. GDP.  With corporate and personal tax rates already the lowest in U.S. history, more tax cuts can only lead to more economic failure.  Spending more money on federal contracts and public works jobs only helps stimulate more private sector employment.

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