The Road to U.S. Economic Suicide

Re-electing Obama Would Push U.S. Over Cliff

Mike Scruggs

Re-electing President Obama would push the United States over a political and economic cliff without a parachute. Bad economic policy sometimes takes several decades to ruin a country, but shackling the U.S. with four more years of Obama’s extremely misguided economic and social ideology would put America in the express line for political and economic suicide.

On June 1, the Bureau of Labor Statistics (BLS) released its employment report for the month of May. To those unfamiliar with the usual consequences of Jacobin-socialist economic ideology and practical incompetence, the continuing decline of the U.S. economy may have come as a surprise. Most of the mainstream media were looking for signs of recovery spurred by throwing billions of stimulus dollars into the laps of labor unions, mismanaged banks, and green-fraud enterprises like the now bankrupt solar panel manufacturing company, Solyndra—responsible for losing over $500 million in taxpayer money.

To the Obama-smitten mainstream press, loaning over $500 million to a “green” technology company managed by Obama’s financial backers and having a net worth of only $100 million was perhaps visionary. However, even adjusted for historical inflation in measuring the dollar impact of past corporate scandals, I believe it sets a new Ripley’s Believe-It-or-Not Record. Obama’s other visionary government investment records are also amassing an unenviable record of ill-fated favoritism and bad judgment.

May’s report showed a mere 69,000 new jobs, the lowest level of the calendar year. Unemployment, measured by the inadequate but standard U-3 definition most familiar to the public, increased to 12,720,000, bumping up the unemployment rate from 8.1 percent to 8.2 percent. Over 4,000,000 American workers have been out of work for 27 months or more.

But the standard U-3 rate is highly misleading, since it does not include millions of discouraged workers who want a job but have given up looking after many months of futility. It also does not include millions who have been forced from full-time to part-time work by economic circumstances.

The BLS U-6 rate is a more realistic and more painful to contemplate. The U-6 rate has moved from 14.6 percent to 14.8 percent. That moves the number of American workers impacted at nearly 23,000,000—a lingering tragedy, not recovery.

Just an aside, but with 23 million Americans unable to find full-time work and all the talk by Obama and other politicians about the importance of jobs, why do we still have 8.l million illegal immigrant workers in the country? According to Harvard Labor Economist George Borjas, a Cuban immigrant himself, the pressure of low-wage competition from massive levels of both legal and illegal immigration reduced real wages for American workers by 3.2 percent from 1980 to 2000 and is continuing. That is $2,700 per year per worker—a $302 billion dollar annual dent in the buying power of American workers.

Obama calls his solution to the immigration problem “Administrative Registration.” This amounts to getting illegal immigrants to register and rewarding their registration by giving them a Green Card. There are some outside the mainstream press who are beginning to realize that Administrative Registration and amnesty are the same thing. Moreover, Obama is already giving administrative amnesties by the tens and hundreds of thousands with little protest from Congress.

Unemployment is particularly prevalent among the young, unskilled, poorly educated, and several ethnic minorities. The U-3 unemployment rate is 7.4 percent for whites, 11.0 percent for Hispanics, and 13.6 percent for blacks. Unemployment is 22.0 percent for all those aged 16 to 19 and 36.8 percent for blacks. It is 8.9 percent for high school graduates and 23.9 percent for recent high school graduates.

The economic stress, however, is also impacting many skilled and college-educated workers, especially in the STEM (science, technology, engineering, and mathematics) category. While the unemployment rate is only 4.9 percent for college graduates overall, engineers and information systems graduates have unemployment rates of 8.6 percent and 11.7 percent respectively. In addition, more than half (53.6 percent in 2011) of recent college graduates under 25 are underemployed—for example, a mechanical engineer working as a waiter or waitress.

Much of the unemployment and underemployment in the STEM categories is due to incredibly sloppy and irresponsible Federal immigration policy. According to the Department of Labor, prior to 2008, the U.S. economy produced 82,000 STEM jobs annually. In 2007, the Department of Education estimated that U. S. colleges produced 203,000 STEM graduates annually. Many of them were among the 600,000 foreign students enrolled in U.S. colleges every year. An investigative report in September 2009 by Walt Gardener with the Atlanta Journal Constitution indicated that the U.S. often issues more STEM H-1B visas per year than the total annual growth in STEM jobs. In 2008, 137,000 foreign STEM workers and graduates were issued H-1B Work Visas as requested by U.S. companies. While U.S. STEM hires averaged salaries of $78,000, the H-1B visa hires were paid an average of only $60,000, an $18,000 per hire savings for the 21 percent of U.S. companies abusing the H-1B program. Contrary to popular myth and various sources of political and partisan economic distortion, there is no STEM graduate shortage in the United States. Real wages for U.S. STEM graduates have been flat since 2000.

America has serious economic problems. Not all were created by President Obama, but he is continuing them, making them worse, and adding more terrible problems like ObamaCare, runaway government spending, huge deficits, and an $18 trillion national debt. We are on the edge of a cliff, and re-electing Obama would be economic suicide.