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President Obama’s Real Accomplishments in Office   Introduction Where politics is concerned there always seems to be a real disconnect between facts on the one hand, and political rhetoric espoused by the media and the various political parties on the other. Citizens expect the media to decipher fact from fiction. But since the media is often biased in favor of one political party over another, the voting public is actually left to their own devices to determine fact from fiction. As a consequence, the average citizen is left out in the cold where unbiased evaluation of a candidate for political office is concerned. As we all know, politicians talk more about values, not facts. Facts are often used to measure results of a politician’s programs, while values are used to make promises and to encourage the public to vote for a particular candidate. Facts are too dangerous for politicians while values are safer when interacting with the public.   Purpose of Blog The purpose of this Blog is to present to my cyberspace public a factual review of the real accomplishments of the President of the United States, Barack Obama. I will review his accomplishments in two ways: Review the two most important promises the President made back in 2008 which were to lower the unemployment rate and create middle class jobs for Americans. The second way is to list the accomplishments of Barack Obama. When it came to the President’s promises, both related to economics. This was important since the country came close to a financial disaster and collapse during President Bush’s last term in office. At the time he made his promises, little did he know that his vision for America would be met by a recalcitrant and often times obstreperous Congress, particularly the House of Representatives. Despite the juggernaut of destructive gridlock offered up by the Republican Party and its Tea Party members, achievements were made in the last 6 years by the President. The Promises of President Obama The first promise was to lower the unemployment rate, and the second was to create jobs for middle-class Americans. I will present data that supports these promises, and I will carefully review actual achievements. The Unemployment Rate The President took office in January 2009. At that time the unemployment rate had been climbing during the previous year under the Bush Administration from 5.0 percent in January 2008 to 7.8 percent in January, 2009. The rate of unemployment continued to rise to a high of 10 percent in October 2009 as a lagging effect of the recession and near financial collapse in 2008. It continued to drift from 9.9 down to 9.4 percent during the rest of 2009, and continued through to the end of 2010. By this time the policies of the President and the Federal Reserve Board (primarily the economic stimulus packages) were starting to have an effect on the unemployment rate. In January 2011 the unemployment rate dropped to 9.1 percent. A year later it was 8.2 percent. By January 2013 it was 7.9 percent. In January 2014 the unemployment rate had dropped to 6.6 percent. In June 2014 the unemployment rate dropped again to 6.1 percent. During the President’s watch, the unemployment rate declined 39 percent. As of August 2014 the unemployment rate still stayed at 6.1 percent. It would, of course, be simplistic and rather naïve to either ascribe total credit or total blame to the person holding office of the presidency for the lion’s share of any economic change. The reality is economic cycles and the economy itself each have a life of its own (see my previous Blogs on economics and economic theories).  Nevertheless, fiscal and economic policies of any President do matter.  So from a policy standpoint, President Barack Obama has very much helped impact the unemployment rate in a positive way, thus achieving his first promise. Unemployment Rate (January 2004 – June 2014)

Year Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Annual
2004  5.7 5.6 5.8 5.6 5.6 5.6 5.5 5.4 5.4 5.5 5.4 5.4
2005  5.3 5.4 5.2 5.2 5.1 5.0 5.0 4.9 5.0 5.0 5.0 4.9
2006  4.7 4.8 4.7 4.7 4.6 4.6 4.7 4.7 4.5 4.4 4.5 4.4
2007  4.6 4.5 4.4 4.5 4.4 4.6 4.7 4.6 4.7 4.7 4.7 5.0
2008  5.0 4.9 5.1 5.0 5.4 5.6 5.8 6.1 6.1 6.5 6.8 7.3
2009  7.8 8.3 8.7 9.0 9.4 9.5 9.5 9.6 9.8 10.0 9.9 9.9
2010  9.7 9.8 9.9 9.9 9.6 9.4 9.5 9.5 9.5 9.5 9.8 9.4
2011  9.1 9.0 9.0 9.1 9.0 9.1 9.0 9.0 9.0 8.8 8.6 8.5
2012  8.2 8.3 8.2 8.2 8.2 8.2 8.2 8.1 7.8 7.8 7.8 7.9
2013  7.9 7.7 7.5 7.5 7.5 7.5 7.3 7.2 7.2 7.2 7.0 6.7
2014  6.6 6.7 6.7 6.3 6.3 6.1

  Source: Department of Labor Statistics     Job Creation and Growth   It is a fact that, since President Roosevelt, the average amount of private sector jobs created during Democratic Presidential terms is 1,463,220 and the average amount during Republican Presidential terms is a paltry 642,000 jobs.     Obama’s Second Promise

52 Straight Months of Private Sector Job Growth

July 3, 2014 Under President Obama’s leadership, the economy has added private sector jobs for 52 straight months. During this span, 9.7 million private sector jobs have been created. In the Senate,    Democrats are fighting to continue this positive trend and help speed along the economic recovery.   President Obama’s Major Accomplishments What follows is a PARTIAL list of Obama’s accomplishments so far.

 

Despite the characterizations of some Republicans, Obama’s success rate in winning congressional votes on issues was an unprecedented 96.7% for his first year in office. Though he is often cited as superior to Obama, President Lyndon Johnson’s success rate in 1965 was only 93%.

Fiscal Responsibility

Within days after taking office, Obama signed an Executive Order ordering an audit of government contracts, and combating waste and abuse. The President created the post of Chief Performance Officer, whose job it is to make operations more efficient to save the federal government money. On his first full day, he froze White House salaries. He appointed the first Federal Chief Information Officer to oversee federal IT spending. He committed to phasing out unnecessary and outdated weapons systems, and also signed the Weapons Systems Acquisition Reform Act to stop waste, fraud and abuse in the defense procurement and contracting system. Through an executive order, he created the National Commission on Fiscal Responsibility and Reform.

Improving the Economy, Preventing Depression

Obama pushed through and signed the American Recovery and Reinvestment Act, otherwise known as “the stimulus package,” despite the fact that not one Republican voted for that bill. In addition, he launched recovery.gov, so that taxpayers could track spending from the Act. In his first year, the American Recovery and Reinvestment Act created and sustained 2.1 million jobs and stimulated the economy 3.5%. Obama completed the massive TARP financial and banking rescue plan, and recovered virtually all of its costs. He created the Making Home Affordable home refinancing plan. Obama oversaw the creation of more jobs in 2010 alone than Bush did in eight years.  He oversaw a bailout of General Motors that saved at least 1.4 million jobs, and put pressure on the company to change its practices, resulting in GM returning to its place as the top car company in the world. Obama also doubled funding for the Manufacturing Extension Partnership which is designed to improve manufacturing efficiency. He signed the Fraud Enforcement and Recovery Act giving the federal government more tools to investigate and prosecute fraud in every corner of the financial system. It also created a bipartisan Financial Crisis Inquiry Commission to investigate the financial fraud that led to the economic meltdown. Obama signed the Credit Card Accountability, Responsibility and Disclosure (CARD) Act, which was designed to protect consumers from unfair and deceptive credit card practices. He increased infrastructure spending after years of neglect.  Obama signed the Helping Families Save Their Homes Act, expanding on the Making Home Affordable Program to help millions of Americans avoid preventable foreclosures. The bill also provided $2.2 billion to help combat homelessness, and to stabilize the housing market. Through the Worker, Home Ownership, and Business Assistance Act of 2009, Obama and Congressional Democrats provided tax credits to first-time home buyers, which helped the U.S. housing market recovery. He initiated a $15 billion plan designed to encourage increased lending to small businesses. Obama created business.gov, which allows for online collaboration between small businesses and experts remanaging a business. (The program has since merged with SBA.gov.) He played a lead role in getting the G-20 Summit to commit to a $1.1 trillion deal to combat the global financial crisis.  Obama took steps to improve minority access to capital.  He created a $60 billion bank to fund infrastructure improvements such as roads and bridges. He implemented an auto industry rescue plan, and saved as many as 1 million jobs.  Many are of the opinion that he saved the entire auto industry, and even the economy of the entire Midwest. Through the American Recovery and Reinvestment Act, Obama saved at least 300,000 education jobs, such as teachers, principals, librarians, and counselors that would have otherwise been lost. Obama dismantled the Minerals Management Service, thereby moving forward to cut ties between energy companies and the government. He provided funding to states and the Department of Homeland Security to save thousands of police and firefighter jobs from being cut during the recession. He used recovered TARP money to fund programs at local housing finance agencies in California, Florida, Nevada, Arizona and Michigan. Obama crafted an Executive order establishing the President’s Advisory Council on Financial Capability to assist in financial education for all Americans.

Wall Street Reforms and Consumer Protection

Obama ordered 65 executives who took bailout money to cut their own pay until they paid back all bailout money. He pushed through and got passed Dodd-Frank, one of the largest and most comprehensive Wall Street reforms since the Great Depression.  Dodd-Frank also included the creation of the Consumer Financial Protection Bureau. Obama made it so that banks could no longer use YOUR money to invest in high-risk financial instruments that work against their own customers’ interests. He supported the concept of allowing stockholders to vote on executive compensation.  Obama wholly endorsed and supported the Foreign Account Tax Compliance Act of 2009 that would close offshore tax avoidance loopholes. He made a deal with Swiss banks that permit the US government to gain access to the records of criminals and tax evaders. He established a Consumer Protection Financial Bureau designed to protect consumers from financial sector excesses. Obama oversaw and then signed the most sweeping food safety legislation since the Great Depression.

Civil Rights and Anti-Discrimination

Obama advocated for and signed the Matthew Shepard and James Byrd, Jr. Hate Crimes Prevention Act, which made it a federal crime to assault anyone based on his or her sexual orientation or gender identity. He pushed through, signed and demanded the Pentagon enact a repeal of the discriminatory “Don’t Ask Don’t Tell” policy that forced soldiers to lie to fight for their country, and put our troops at risk by disqualifying many qualified soldiers from helping. Obama appointed Kareem Dale as the first ever Special Assistant to the President for Disability Policy. Helped Congress pass and signed the Civil Rights History Act.  He extended benefits to same-sex partners of federal employees. Obama has appointed more openly gay officials than anyone in history.  He issued a Presidential Memorandum reaffirming the rights of gay couples to make medical decisions for each other. He established a White House Council on Women and Girls. He signed the Lilly Ledbetter Fair Pay Act, restoring basic protections against pay discrimination for women and other workers. This was after the GOP blocked the bill in 2007. Only 5 Republican Senators voted for the bill.    Obama wrote and signed an Executive Order establishing a White House Council on Women and Girls to ensure that all Cabinet and Cabinet-level agencies evaluate the effect of their policies and programs on women and families. He expanded funding for the Violence against Women Act. Under Obama’s watch, National Labor Relations Board has issued final rules that require all employers to prominently post employees’ rights where all employees or prospective employees can see it, including websites and intranets, beginning November 2011.

Fighting Poverty

Obama provided a $20 billion increase for the Supplemental Nutrition Assistance Program (Food Stamps). He signed an Executive Order that established the White House Office of Urban Affairs.

Improved Foreign Relations and American Status Abroad

Obama visited more countries and met with more world leaders than any previous president during his first six months in office. As he promised, he gave a speech at a major Islamic forum in Cairo early in his administration. He did much to restore America’s reputation around the world as a global leader that does the “right thing” in world affairs, at least according to the rest of the planet. He re-established and reinforced our partnership with NATO and other allies on strategic international issues. Closed a number of secret detention facilities. Obama improved relations with Middle East countries by appointing special envoys. He pushed for military to emphasize development of foreign language skills. Offered $400 million to the people living in Gaza, called on both Israel and the Palestinians to stop inciting violence. He refused to give Israel the green light to attack Iran over their possible nuclear program. He worked to make donations to Haiti tax-deductible in 2009. He established a new U.S.-China Strategic and Economic Dialogue. Issued an Executive Order blocking interference with and helped to stabilize Somalia. He established new, more reasonable policies in our relations with Cuba, such as allowing Cuban-Americans to visit their families and send money to support them. He ordered the closure of the prison at Guantanamo Bay. It was Republicans (and a smattering of Democrats) who prevented him from following through. Obama ordered a review of our detention and interrogation policy, and prohibited the use of torture, or what Bush called “enhanced interrogation.” He ordered interrogators to limit their actions to the Army Field manual. He ordered all secret detention facilities in Eastern Europe and elsewhere to be closed.  He released the Bush torture memos.   On his second day in office, he signed a detailed Executive Order that banned torture, reversed all Bush torture policies, and put the United States in compliance with the Geneva Convention. In response to the emerging “Arab Spring,” he created a Rapid Response fund, to assist emerging democracies with foreign aid, debt relief, technical assistance and investment packages in order to show that the United States stands with them. Obama passed the Iran Sanctions Act, to prevent war, and to encourage Iran to give up their nuclear program.  Obama ended the Iraq War. In response to current events with an ISIS invasion in Iraq President Obama ordered air strikes and offered humanitarian assistance to Iraq religious minorities under threat of death from ISIS. He has now created an international coalition through NATO to annihilate ISIS in Iraq and Syria. He authorized and oversaw a secret mission by SEAL Team Six to rescue two hostages held by Somali pirates. The importance of this international act of terrorism was later made into a movie with Tom Hanks.

Better Approach to Defense

Obama created a comprehensive new strategy for dealing with the international nuclear threat. He authorized a $1.4 billion reduction in Star Wars program in 2010. He restarted nuclear nonproliferation talks and built up the nuclear inspection infrastructure/protocols to where they had been before Bush. He signed and pushed to ratification a new SALT Treaty. Negotiated and signed a new START Treaty that will last until at least 2021. Through the Defense Authorization Act, he reversed the Bush Administration and committed to no permanent military bases in Iraq. He developed the first comprehensive strategy with regard to Afghanistan and Pakistan designed to facilitate the defeat of al Qaeda and the withdrawal of most troops, as well as the rebuilding of Afghanistan. He returned our focus to Afghanistan, stabilized the country, and began the process of withdrawing our troops. Obama fulfilled his campaign promise and ended our involvement in Iraq in 2011. However, current events have altered a total and complete withdrawal from Iraq. Despite the current problems in Iraq the president, during his administration, has taken steps to severely weaken al Qaeda and limit their ability to terrorize the world. Many of the top al Qaeda leaders have been killed or otherwise neutralized. He negotiated and signed a nuclear nonproliferation treaty with India. He took decisive action to use NATO to limit the slaughter of innocents in Libya, so that the Libyan people could topple a despotic government and determine their own fate.   Veterans He made sure that families of fallen soldiers could be on hand when the body arrives at Dover AFB by providing funding for it.  He also ended the media blackout on coverage of the return of fallen soldiers. He funded Department of Veterans Affairs (VA) with an extra $1.4 billion to improve veterans’ services. He provided the troops with better body armor. He created the Joint Virtual Lifetime Electronic Record program for military personnel in order to improve the quality of their medical care. He put an end to the Bush-era stop-loss policy that kept soldiers in Iraq/Afghanistan beyond their enlistment date. He supported and signed the Veterans Health Care Budget Reform and Transparency Act, which made more money available to enable better medical care for veterans. He ushered through the largest spending increase in 30 years for the Department of Veterans Affairs for improved medical facilities, and to assist states in acquiring or constructing state nursing homes and extended care facilities. He created the Green Vet Initiative, which provided special funding to the Labor Department to provide veterans with training in green jobs. He oversaw a $4.6 billion expansion of the Veterans Administration budget to pay for more mental health professionals.

Education

He has repeatedly increased funding for student financial aid, and at the same time cut the banks completely out of the process. He completely reformed the student loan program to make it possible for students to refinance at a lower rate. Through the American Recovery and Reinvestment Act, he invested heavily in elementary, secondary and post-secondary education. This includes a major expansion of broadband availability in K-12 schools nationwide as well as an expansion in school construction. Also, through the American Recovery and Reinvestment Act, he put $5 billion into early education, including Head Start. He signed the Post-9/11 GI Bill, also known as GI Bill 2.0 He oversaw expansion of the Pell Grants program to expand opportunity for low-income students to go to college. He passed the Individuals with Disabilities Education Act, which provided an extra $12.2 billion in funds.

Greater Transparency and Better Government

He signed an order banning gifts from lobbyists to anyone in the Executive Branch. He signed an order banning anyone from working in an agency they had lobbied in previous years. He also put strict limits on lobbyists’ access to the White House. He held the first-ever online town hall from the White House, and took questions from the public. The Obama White House became the first to stream every White House event, live. He established a central portal for Americans to find service opportunities. He provided the first voluntary disclosure of the White House Visitors Log in history.  He crafted an Executive Order on Presidential Records, which restored the 30-day time frame for former presidents to review records, and eliminated the right for the vice president or family members of former presidents to do the reviews. This will provide the public with greater access to historic White House documents, and severely curtails the ability to use executive privilege to shield them. He improved aspects of the Freedom of Information Act, and issued new guidelines to make FOIA more open and transparent in the processing of FOIA requests.

National Safety and Security

He’s restored federal agencies such as FEMA to the point that they have been able to manage a huge number of natural disasters successfully. He authorized Navy SEALS to successfully secure the release of a US captain held by Somali pirates and increased patrols off the Somali coast. Obama has repeatedly beefed up border security. He ordered and oversaw the Navy SEALS operation that killed Osama bin Laden.

Science, Technology and Health Care

He created a Presidential Memorandum to restore scientific integrity in government decision-making. Obama opened up the process for fast-tracking patent approval for green energy projects. He eliminated the Bush-era restrictions on embryonic stem cell research. He also provided increased federal support for biomedical and stem cell research. Through the American Recovery and Reinvestment Act, he committed more federal funding, about $18 billion, to support non-defense science and research labs. He signed the Christopher and Dana Reeve Paralysis Act, the first comprehensive attempt to improve the lives of Americans living with paralysis. He expanded the Nurse-Family Partnership program, which provides home visits by trained registered nurses to low-income expectant mothers and their families, to cover more first-time mothers.  His EPA reversed research ethics standards which allowed humans to be used as “guinea pigs” in tests of the effects of chemicals to comply with numerous codes of medical ethics. Obama conducted a cyberspace policy review. Obama provided financial support for private sector space programs. He oversaw enhanced earth mapping to provide valuable data for agricultural, educational, scientific, and government use. He ushered through a bill that authorized the Food and Drug Administration to regulate tobacco products.  As a result, the FDA has ordered tobacco companies to disclose cigarette ingredients and to ban sale of cigarettes falsely labeled as “light.” Through the American Recovery and Reinvestment Act, he provided $500 million for Health Professions Training Programs. He also increased funding for community-based prevention programs. He oversaw a 50% decrease in cost of prescription drugs for seniors. He eliminated the Bush-era practice of forbidding Medicare from negotiating with drug companies on price. Two weeks after taking office, he signed the Children’s Health Insurance Re-authorization Act, which increased the number of children covered by health insurance by 4 million. He held a quick press conference, and urged Congress to investigate Anthem Blue Cross for raising premiums 39% without explanation. Rep. Waxman responded by launching a probe, and Anthem Blue Cross put the increase on hold for two months. He ushered through and signed the Affordable Health Care Act, which expanded health insurance coverage to 30 million more people, and ended many common insurance company practices that are often detrimental to those with coverage. Through the Affordable Health Care Act, he allowed children to be covered under their parents’ policy until they turned 26. Through the Affordable Health Care Act, he provided tax breaks to allow 3.5 million small businesses to provide health insurance to their employees; thereby 29 million people will receive tax breaks to help them afford health insurance. Through the Affordable Health Care Act, he expanded Medicaid to those making up to 133% of the federal poverty level. Through the Affordable Health Care Act, health insurance companies now have to disclose how much of your premium actually goes to pay for patient care. Provisions in Obama’s Affordable Health Care Act have already resulted in Medicare costs actually declining slightly this fiscal year, for the first time in many years, according to the Congressional Budget Office. Last year’s increase was 4%. Compare that to the average 12% annual inflation rate during the previous 40 years. Strengthening the Middle Class and Families Obama worked to provide affordable, high-quality child care to working families. He cracked down on companies that were previously denying sick pay, vacation and health insurance, and Social Security and Medicare tax payments through abuse of the employee classification of independent contractor. Through the American Recovery and Reinvestment Act, he cut taxes for 95% of America’s working families. Under Obama, tax rates for average working families are the lowest they’ve been since 1950. He extended and fully funded the patch for the Alternative Minimum Tax for 10 years. He extended discounted COBRA health coverage for the unemployed from 9 months to 15 months, and he’s extended unemployment benefits several times.

Environment and Energy

Obama fast-tracked regulations to allow states to enact federal fuel efficiency standards that were above federal standards. His fast-tracked regulation increased fuel economy standards for vehicles beginning with the 2011 model year. It was the first time such standards had been increased in a decade. He oversaw the establishment of an Energy Partnership for the Americas, which creates more markets for American-made biofuels and green energy technologies. His EPA reversed a Bush-era decision to allow the largest mountaintop removal project in US history. He ordered the Department of Energy to implement more aggressive efficiency standards for common household appliances. He ordered energy plants to prepare to produce at least 15% of all energy through renewable resources like wind and solar, by 2021. (As you can see, Republicans are trying hard to kill it.) He oversaw the creation of an initiative that converts old factories and manufacturing centers into new clean technology centers. Obama bypassed Republican opposition in Congress, and ordered EPA to begin regulating and measuring carbon emissions. His EPA ruled that CO2 is a pollutant. He doubled federal spending on clean energy research. He pushed through a tax credit to help people buy plug-in hybrid cars. He created a program to develop renewable energy projects on the waters of our Outer Continental Shelf that will produce electricity from wind, wave, and ocean currents. Obama reengaged in the climate change and greenhouse gas emissions agreements talks, and even proposed one himself. He also addressed the U.N. Climate Change Conference, officially reversing the Bush-era stance that climate change was a “hoax.” He fully supported the initial phase of the creation of a legally binding treaty to reduce mercury emissions worldwide. He required states to provide incentives to utilities to reduce their energy consumption. Following Bush’s eight year reign, he reengaged in a number of treaties and agreements designed to protect the Antarctic. He created tax write-offs for purchases of hybrid automobiles, and later he and Democrats morphed that program into one that includes electric cars. Mandated that federal government fleet purchases be for fuel-efficient American vehicles, and encouraged that federal agencies support experimental, fuel-efficient vehicles. Obama oversaw and pushed through an amendment to the Oil Pollution Act of 1990 authorizing advances from Oil Spill Liability Trust Fund for the Deepwater Horizon oil spill.  He also actively tried to amend the Oil Pollution Act of 1990 to eliminate the liability limits for those companies responsible for large oil spills. He initiated Criminal and Civil inquiries into the Deepwater Horizon oil spill.  Through Obama’s EPA, he asserted federal legal supremacy, and barred Texas from authorizing new refinery permits on its own.  He strengthened the Endangered Species Act. His EPA improved boiler safety standards to improve air quality and save 6500 lives per year. Through the EPA, he took steps to severely limit the use of antibiotics in livestock feed, and to increase their efficacy in humans.  Obama increased funding for National Parks and Forests by 10%. He announced greatly improved commercial fuel efficiency standards. He announced the development of a huge increase in average fuel economy standards from 27.5mpg to 35.5mpg starting in 2016 and 54.5 starting in 2025.

Other Accomplishments

Obama has expanded trade agreements to include stricter labor and environmental agreements such as NAFTA. He oversaw funding of the design of a new Smithsonian National Museum of African-American History, which is scheduled to open on the National Mall in 2015.  He protected the funding during the recent budget negotiations. He oversaw and passed increased funding for the National Endowment for the Arts. Obama nominated Sonia Sotomayor and Elena Kagan to the Supreme Court. Sotomayor is the first Hispanic Justice in the Court’s history, and these women represent only the third and fourth women to serve on the court, out of a total of 112 justices. He appointed the most diverse Cabinet in history, including more women than any other incoming president.  He eliminated federal funding for abstinence-only education, and he rescinded the global gag rule. Obama loosened the rules, and allowed the 14 states that legalized medical marijuana to regulate themselves without federal interference.  His FDA banned the use of antibiotics in livestock production.  Obama ushered through and signed national service legislation, increasing funding for national service groups, including tripling the size of the AmeriCorps program.     The material used for the list of accomplishments was obtained from the article below. It has been altered somewhat due to many of the current events that have taken place globally in last few weeks and months. Read the original article at http://pleasecutthecrap.typepad.com/main/what-has-obama-done-since-january-20-2009.html     Post Script It is clear that President Obama is one of the most successful presidents of all time. Despite a much fractured Congress and a very disruptive Republican/Tea Party, President Barack Obama has exceeded all expectations as a president. Whoever the next president in 2016 is—one thing is for sure—she/he will definitely follow in the footstep of a presidential giant. As an aside, I hope the voting public will evaluate the Republican/Tea Party in a fair and balanced manner. It should be based on the number of their accomplishments for the American people since President Bush left office. That evaluation should be very easy based on the overwhelming number of their accomplishments. At the last count Republicans/Tea Party have ZERO ACCOMPLISHMENTS. If you really want to know which party to support in the upcoming mid-term elections this fall, just ask yourself one important question based on the following. Twenty years ago the Republicans swept into office with their promise in 1994 of a Contract with America. A November 13, 2000 article by Edward H. Crane, president of the libertarian Cato Institute, stated, “…the combined budgets of the 95 major programs that the Contract with America promised to eliminate have increased by 13%.” President Bill Clinton often remarked that the Republicans had actually put forth a “Contract on America.” The question you need to ask yourself and answer is—What part of Contract with America, if any, was ever accomplished by the Republican Party? If the answer is none of it, then you should clearly know which party or candidates to support in the upcoming mid-term elections. Why, you ask? — Because history, including political history, has a habit of repeating itself. The government shutdown, and economic harm that was subsequently felt by the American people a year ago, was caused by Republican/Tea Party members in Congress. I think it is fair to say that any Republican/Tea Party members running in the mid-term elections in 2014 (who supported the government shutdown) should have no subsequent role in that government since they tried to “deep six” it in 2013.

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Under the Microscope: Understanding Economics and the Unemployment Rate   

“She Sat like Patience on a Monument, Smiling at Grief.”

Twelfth Night, William Shakespeare

Introduction

     The unemployment rate is but one factor or variable in our economy. There are many others including:

  • Inflation
  •  consumer aggregate demand for goods and services
  •  governmental fiscal policy (spending and taxes)
  •  monetary policy (policies around the expansion or contraction of the money supply)
  •  private sector business practices including business contraction or expansion
  •  population expansion or contraction
  •  different industries
  •  technological development
  •  national and global politics
  •  Entrepreneurship
  •  skill sets and educational level of Americans today.

Then there is one important “juice of the economy” that affects everyone, and is known as Credit Availability. All these factors or variables affect each other to one degree or another.

A Sense of Bewilderment and Frustration

     Understanding the unemployment rate has never been a simple task. Complex interactive variables and a constantly changing economy sometimes seem to conspire to give the public a sense of bewilderment when trying to understand or figure out what is going on. It’s sad and disappointing when your close friends and/or family members just can’t seem to find a job. The Unemployment Rate is more than a statistic; it’s about real people, their lives, and their livelihood.

This bewilderment and frustration does cause anger creating a kind of collective social consciousness where everybody agrees on only one thing, namely: Let’s point a finger and play the “Blame Game.”

People want to blame the Congress, the President, or Democrats and Republicans in general, the Federal Reserve or its chairman, or the global economy when jobs are viewed as leaving the United States.

Economists aren’t too helpful sometimes because they cannot always agree on what is the best course of action for creating jobs or achieving full employment in the United States. Others prefer to blame labor unions, illegal immigration, Wall Street, or big business and/or small business.

As a blogger I can’t extricate the public from their frustrations, lack of knowledge, or prejudices.  However, one way I can help is to provide a more factual and theoretical basis for understanding what unemployment really is, and how it fits within the overall framework of what we call the economy. Under the microscope, here is some background which should help with understanding the economy.

Background

       Generally, astute observers might suggest that the problem of unemployment is somehow tied to the economy or business cycles such as (Expansion and Growth, Prosperity, Recession [or contraction], and finally Recovery). Other economists prefer the following descriptive terms: (Prosperity, Recession, Depression, and Recovery). The guy on the street might suggest that our economy simply involves only three cycles (The Good, The Bad, and the Ugly). All of this will become clearer later in this Blog.

Economic cycles, however described, do account for the lion’s share of the explanation of how the economy works, including how the Unemployment Rate fits in. Economic forces seem to have a life of their own. Nevertheless, other forces besides economic cycles are important.

The other explanation for the economy and unemployment rate relates to politics and government actions to deal with the economy and unemployment.

Current Economic Environment

     In the current economy the country does seem to be in a very long recovery cycle. Although business cycles always occur in the same order, the length of each cycle cannot easily be predicted.

Since much unemployment or underemployment occurs among the poor and the working poor, some people feel the replacement of lower skilled jobs with better technology and more jobs requiring higher skill sets has left the poor and working poor holding the bag. However, given that almost every profession experiences unemployment during a recession (engineers, scientists, teachers, highly skilled technicians, etc.) a reasonable person might conclude that unemployment affects everyone, not just the poor and the working poor.

Other targets for blame include: the rich and wealthy in society, poor planning of the job-seeker himself, and finally—the consumer for not spending enough money that would support and stimulate business. When business suffers as consumer demand ebbs, it creates the conditions that allows  a higher than normal unemployment rate.

How best can one unravel the various complexities of understanding the economy and begin to shed light on the unemployment rate? In an ideal world we all want full employment for our citizens. Unfortunately, no society ever lives in an ideal world.

     So what is the best course to understanding the complexities of the economy and the unemployment rate?

In a cosmic sense every variable affects every other variable to some degree. But in a down-to-earth way we have to remember the famous words of Jack Webb’s character Joe Friday in the hugely popular television series, Dragnet. “Just give me the facts, mame!”So, what are the facts?

     First we need to start with a few facts on the unemployment rate in America followed by an explanation of the various phases of the business cycle.

 

Unemployment Rate Data

 

The Unemployment Rate in the United States (January and December 2003-2013)

 

                               January                 December

2003                            5.8                            5.7

2004                            5.7                            5.4

2005                            5.3                            4.9

2006                            4.7                            4.4

2007                            4.6                            5.0

2008                            5.0                            7.3

2009                            7.8                            9.9

2010                            9.8                            9.3

2011                            9.1                            8.5

2012                            8.3                            7.8

2013                            7.9*

*As of August 2013 the unemployment rate in the United States was 7.3%, a level not seen since December, 2008. It went from a high of 9.9% in December 2009 to a low of 7.3% in August, 2013. This 2.6% drop in the unemployment rate occurred during the administration of President Barack Obama, who said “Yes We Can” while Republicans blamed him for the high unemployment. This was despite the fact they created the conditions that caused the unemployment rate to jump from 5.0% to 7.3% during the catastrophic economic collapse of 2008 which occurred during the last year of the Bush Administration.

Definitions and Concepts

    

 

Unemployment

 

There are four types of unemployment:

 

Structural Unemployment

     Structural unemployment is caused by the types of production and laws of an economy that govern whose skills are valuable in the marketplace.

Frictional Unemployment

     Frictional unemployment is associated with changing jobs, often because workers are searching for better opportunities or moving to new locations.

Cyclical Unemployment

     Cyclical unemployment is caused by changes in real GDP that are associated with the business cycle.

Seasonal Unemployment

     Lastly, seasonal unemployment is caused by changes in employment associated with changes in the seasons.

 

The Basic Business Cycle

The four phases of a business cycle are briefly explained as follows:

1. Prosperity Phase

When there is an expansion of output, income, employment, prices and profits, there is also a rise in the standard of living. This period is termed as Prosperity phase.

The features of prosperity are:

  1. High level of output and trade.
  2. High level of effective demand.
  3. High level of income and employment.
  4. Rising interest rates.
  5. Inflation.
  6. Large expansion of bank credit.
  7. Overall business optimism.
  8. A high level of MEC (Marginal efficiency of capital) and investment.

Due to full employment of resources, the level of production is Maximum and there is a rise in GNP (Gross National Product). Due to a high level of economic activity (buying and selling goods and services), it causes a rise in prices and profits. There is an upswing in the economic activity and economy reaches its Peak. This is also called as a Boom Period.

2. Recession Phase

The turning point from prosperity to depression is termed as the Recession Phase.

During a recession period, economic activities slow down. When demand starts falling, the overproduction and future investment plans are also given up. There is a steady decline in the output, income, employment, prices and profits.

The businessmen lose confidence and become pessimistic (Negative). It reduces investment. The banks and the people try to get greater liquidity, so credit also contracts. Expansion of business stops, stock market falls. Orders are cancelled and people start losing their jobs. An increase in unemployment occurs with or following a sharp decline in income and aggregate demand. Generally, recession lasts for a short period.

Many people talk about a “mild recession” and even “severe recession.” These are all matters of degree and economists can endlessly debate which is which. However, almost no one wants to consider or talk about the more devastating type of decline called a Depression.

3. Depression Phase

When there is a continuous decrease of output, income, employment, prices and profits, there is a fall in the standard of living and depression sets in.

The features of depression are:

  1. Fall in volume of output and trade.
  2. Fall in income and rise in unemployment.
  3. Decline in consumption and demand.
  4. Fall in interest rate.
  5. Deflation.
  6. Contraction of bank credit.
  7. Overall business pessimism.
  8. Fall in MEC (Marginal efficiency of capital) and investment.

In depression, there is under-utilization of resources and fall in GNP (Gross National Product). The aggregate economic activity is at the lowest, causing a decline in prices and profits until the economy reaches its Trough (low point).

4. Recovery Phase

The turning point from depression to expansion is termed as Recovery or Revival Phase.

During the period of revival or recovery, there are expansions and rise in economic activities. When demand starts rising (many economists assert that consumers are the driving force of any economy), production increases and this causes an increase in investment. There is a steady rise in output, income, employment, prices and profits. The businessmen gain confidence and become optimistic (Positive). This further increases investments.

The stimulation of investment brings about the revival or recovery of the economy. The banks expand credit, business expansion takes place and stock markets are activated. There is an increase in employment, production, income and aggregate demand, prices and profits start rising, and business expands. Revival slowly emerges into prosperity, and the business cycle is repeated.

Thus we see that, during the expansionary or prosperity phase, there is inflation and during the contraction or depression phase, there is deflation.

Economics and Employment in a Nutshell

     As our population increases there is more consumer demand. And, there are those that say that the driving force behind any economy is the consumer. This aggregate demand for goods and services causes businesses to have to keep up with consumer demand. Business does this by expanding or creating more products (inventory) and needed services.

This creates more money for businesses through profits and may require credit and acquiring loans to expand a business as well. In turn, business must hire more people.

Hiring people involves more money for salaries, insurance, office space, vehicles, etc. But here is the rub: In order for business to pay for all this expansion, they must raise the prices on goods and services. This, as everyone knows, is Inflation.

 As prices go higher consumer demand begins to lessen, and people get laid off when consumer demand begins to really tank. The sad truth is—as prices come down (deflation), the unemployment rate goes up. When the economy heats up again, then the expansionary business cycle causes businesses to once again hire more people. Near full employment (not real full employment) is achieved during the economic cycle known as “Prosperity.” The variability one finds in the unemployment rate is a direct result collectively of the four business cycles, and political factors as well.       

Political Influences on the Economy

     In the final analysis, a high unemployment rate is due to both political factors and the recessionary/depression economic business cycles. Economic business cycles are inevitable, but very difficult to predict how long each cycle will last. However, political factors make their own contribution to a high unemployment rate. And, everyone should be aware,  the order of economic cycles cannot be altered. Although timing of economic cycles can’t be predicted, they can be influenced by political factors. Such timing is heavily influenced by which political party dominates fiscal and monetary policies. These policies can be narrowed down to party-related tax policies, spending policies, monetary policies, and policies dealing with the availability of credit. All of these factors affect the unemployment rate.

Explanations for all these governmental actions can be found in a seven part series I blogged called, “Election Year Politics and the Economy,” back in 2012.

The Current Political Environment

     One question the public needs to think about is whether Republicans or democrats are better at tinkering with the economy and the unemployment problem?

At the present time that question is difficult to answer because the U.S. Government is in a state of crisis where efforts to help the unemployed or improve the economy have taken a back seat to politics and the shutting down of the government.

A hand full of Republican Tea Party members in Congress wanted and decided to hold the American people, and its government, hostage. It was a strategy created in lieu of the normal legislative process. As a result this caused a government shutdown. They did so primarily over just one issue—The Affordable Care Act. Until the government shutdown is really over, plans and resources to stimulate the economy and lower the unemployment rate—are evidently on hold.

So the public needs to start asking questions of Tea Party members now, long before the public goes to the polls in 2014. They might take this approach. Like Inspector Harry Callahan (played by Clint Eastwood) in the 1971 movie Dirty Harry, they might ask Tea Party members something like this: “So, you have to ask yourself this question. Do you feel lucky? Well, do you punk? The serial killer thought he was lucky. He reached for his gun and Inspector Harry Callahan blew him away.

Tea Party members, like Dirty Harry’s serial killer, may think they just might get lucky by holding the country hostage. Unfortunately, with recalcitrant Tea Party members controlling The House of Representative like domestic terrorists, they just might succeed. Polls indicate the Republican Party is going to get the most blame for the failed ill-conceived strategy to shut down the government and government services. The country is really pissed over the government shutdown!

Metaphorically speaking, the public after having been raped in 2013 by Tea Party members is going to get the last word, and perhaps poetic justice and revenge. It is my fondest hope that during the upcoming 2014 elections, the public, like the Terminator or Dirty Harry, is going to end the political careers of all Tea Party members who shouldn’t have been elected to Congress in the first place. However, the public has a very short memory. So, we’ll see what happens in 2014.

But a bigger question remains. How should sensible moderate Republicans or Democrats in general be viewed as to their ability to help improve the economy or help to lower the unemployment rate via job creation? In the upcoming congressional and senatorial elections in 2014 how should you vote if unemployment and a thriving economy is your uppermost concern?

To understand and answer the question, one needs only to look at past behavior of either political party. Again, who best can tinker effectively with the economy and the unemployment problem, Democrats or Republicans?

 

The Answer

     Since Democrat John F. Kennedy took office in January 1961, non-government payrolls in the U.S. swelled by almost 42 million jobs under Democrats, compared with 24 million for Republican presidents, according to Labor Department figures. Democrats hold the edge though they occupied the Oval Office for 23 years since Kennedy’s inauguration, compared with 28 for the Republicans. In addition, over the past 50 years, Republican administrations oversaw the largest decline in wages as measured as a percentage of the U.S. Gross Domestic Product (GDP).

If you really care about data and facts (not just value judgments), then it should be very clear to you who to vote for during the 2014 and 2016 elections.

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