Has Obama Left "a New Great Recession" for Trump?

December 8, 2016
President Barack Obama meets with President-elect Donald Trump at the White House, Nov. 10, 2016. (photo: J. Oni/VOA)

While the decisive current question is whether the incoming Trump Administration will truly bury the "regime-change war doctrine" and pursue productive economic cooperation with China and Russia, there were reminders today of Barack Obama's other sad legacy, the economy. The U.S. Council on Competitiveness released a report on U.S. productivity titled "No Recovery," and aptly headlined in USA Today, "The Obama Recovery Wasn't a Recovery After All." And the National Center for Health Statistics issued a grimmer study, finding that life expectancies for the entire U.S. population are actually falling, and death rates from almost all the most common diseases rising, along with infant mortality. One study researcher said, "There's just this across-the-board phenomenon of not doing very well in the United States."

Despite the brief "market" euphoria over Trump's election, many economists are forecasting that Obama has left him "a new Great Recession"; and in fact, an early financial crash, due to the manifest incapacity of the Dodd-Frank Act to control and subdue Wall Street. Many of the most active and concerned Americans are deeply worried about this as well. The "biggest question" named above will, fundamentally, decide it; American prosperity will return by cooperation in the "New Silk Road" of great infrastructure building, by cooperation in Moon, Mars and deep space exploration; by cooperative breakthroughs in fusion power technologies, nuclear desalination and power.

As the LaRouchePAC National Policy Committee's Rachel Brinkley put it in a statement on the failed Dodd-Frank Act, "First, is the ... increase of real wealth resulting from increased rates of physical productivity. China's New Silk Road policy is positively affecting 70 countries and 4.4 billion people, through focusing on the construction of new transportation routes and energy development, including the building of high-speed rail and more efficient ports, electrifying rural regions, and partnering in advanced scientific cooperation with other countries. This is a current, living demonstration of how to positively affect net rates of physical growth. Monetary processes must always be subordinate to this...."

But we must have a Glass-Steagall reorganization of the banks immediately — otherwise, with rising interest rates now hitting huge new bubbles of debt, Wall Street and London will crash again and destroy the prospects of progress. Trump has said he wants Glass-Steagall reinstated; many well-known economists say Congress and his Wall Street advisors will not allow it. They underestimate the pent-up demand among millions of informed Americans to have Glass-Steagall justice and "close down the Wall Street casino." Then a Franklin Roosevelt-style national credit and productivity policy can lift the nation out of the long economic collapse in which Bush and Obama have left it.



More Bad U.S. Demographics News: Lifespans Falling

Another report has shown the demographic effects of economic devastation in the United States' past 15 years under Presidents Bush and Obama.

The National Center for Health Statistics (part of the Department of Health and Human Services) reported Dec. 7 that death rates rose across the whole American population in 2015 (relative to 2014, and to 1999) for eight of the 10 most common diseases.

A drumbeat of scholarly reports and data analyses published over a year and a half, have shown the unprecedented appearance of a rising death rate among the white population of working age. Now the whole population is encompassed in this rise. "This is singular. This doesn't happen," commented Dr. Ann Case of Princeton, co-author of the first such shocking study, in September 2015.

The new study's lead author, epidemiologist Jiaquan Xu, told the Washington Post Dec. 8, "This is unusual and we don't know what happened. So many leading causes of death increased."

Moreover, the HHS study finds the American population's overall lifespan starting to fall. Male life expectancy at birth fell to 76.3 years in 2015 from 76.5 in 2014; female life expectancy from 81.3 to 81.2. Infant mortality rose "slightly." Only two months ago, the American Society of Actuaries projected such drops statistically, based on increasingly pessimistic assumptions actuaries are making about death rates. In that Oct. 28 report, the Actuaries said, "If Americans' health continues to decline, the assumptions in this report will still prove too optimistic." At that time, they were still assuming an overall death rate falling (though extremely slowly) among all Americans. But that rate is now rising.

"This is a big deal," said Philip Morgan, a demographer at the University of North Carolina."There's not a better indicator of well-being than life expectancy," Another researcher, University of Michigan's David Wier, commented, "There's just this across-the-board phenomenon of not doing very well in the United States."

A sad illustration of the economic devastation underlying this dramatic change, is the New York Times ' report today of a "continuing surge in the homeless population" in New York, resulting in 5,800 hundred family members being put into rented rooms by the city because homeless shelters are full; only 1,237 people were in such rented rooms on Jan. 1, 2016. The city today is mourning the deaths of two toddlers killed by scalding water when a radiator burst in one of those rented rooms.

U.S. Competitiveness Council: There Was No 'Obama Recovery'

The U.S. Council on Competitiveness (USCC) and the Gallup Organization have published a economists' study, entitled "No Recovery: An Analysis of U.S. Long-Term Productivity Decline." As USA Today aptly headlined its coverage of the report: "Maybe the Obama Recovery Wasn't a Recovery After All."

Specifically he USCC study concluded that for the past 15 years, per capita GDP in the American economy has grown at an annualized rate of just 1%, and that it is growing at just half that rate since the 2008 financial crash.

In addition, U.S. multi-factor productivity has grown at a very low 0.4% annualized rate over the past decade. Multi-factor productivity attempts to measure the efficiency with which factories or other productive facilities use additional labor and additional capital investment; it is an approximation of the lift to the economy of invention and technological progress. This measure's contribution to U.S. productivity growth was at 3.0-3.5% annually during the years from FDR's to JFK's presidencies; the 0.4% of the Obama years (and several years of the George W. Bush Administration) is a far cry from that.

The USCC report also finds that "Exports as a share of GDP increased from 11.5% in 2007 to 12.6% in 2015," even though globally, growth was slowing down. Thus, the global slowdown was not what was dragging the U.S. economy; rather, a lack of real economic demand in the U.S. economy itself is indicated. Demand for private investment has fallen, and business capital investment has fallen, they imply, as a result.

The report quotes Yale economist and author Robert Gordon that "the quality of inventions has fallen." "Gordon argues that advances [inventions, new technologies--ed.] since 1970 have tended to be channeled into a narrow sphere of human activity having to do with entertainment, communications, and the collection and processing of information," the report says. "For the rest of what humans care about — food, clothing, shelter, transportation, health, and working conditions both inside and outside the home — progress slowed down after 1970." Thus, the introduction notes, "There is a pervasive sense that the economy is not working, as documented in Gallup survey data and many anecdotal media accounts."