Despite the extent to which the officials in the White House, and the talking heads in the media and on Wall Street deny that the economy is faltering, it is this very issue that is driving voter outrage in the direction of Trump and Bernie.
It’s the jobs, stupid!
And since Obama can’t fix it, he’s lying about it to maintain appearances.
Because so many have become so ill-adjusted to the unforgiving job market, there is great talk about why our national policy is directed towards destroying employment, income, savings and the American dream in general.
After 8 years, it is a problem that Obama may have inherited, but will now have to own.
Peter Schiff claims that:
In his seventh, and final, State of the Union address this January, President Obama, clearly looking to bolster his legacy as the president who vanquished the Great Recession, boldly asserted that “Anyone claiming that America’s economy is in decline is peddling fiction.” Unfortunately for the President, more and more Americans seem to believe (with an adequate basis for proof) that the fiction is emanating from the White House.
It’s hard to imagine how anyone can really assert with a straight face that the economy is currently “strong.”
Companies have been incentivized to cut their full-time work force… The view from the street looks quite different, as workers prefer one good job to several bad ones. This is why rallies for Donald Trump and Bernie Sanders are so well-attended. The underemployed are fed up with platitudes from the elites and they flock to these outsider candidates, who seem to understand their pain.
Never mind these two as individuals, but what they represent as symbols. Americans are completely fed up with establishment – and they aren’t ready to accept being pushed back in for another round.
I don’t expect that the President will ever officially acknowledge that the economy has weakened, let alone relapsed into recession. He has walked out too far on his rhetorical branch to walk it back. As a lame duck, he really has no incentive to do so.
The Obama White House has been hiding an economic holocaust during his two terms. Symbolically elected to dispose of the mess created by George W. Bush’s administration and the economic collapse that was engulfing people already drowning in debt.
Instead, he has cheered on the illusion that “recovery” is near, while the bankers have accumulated more wealth than ever, and are waiting for the next wave of the crash to come down on the population.
Meanwhile, critics have accused Yellen – publicly very silent about policy decisions – of timing the blow of the recession.
The recession itself is presumably inevitable, but the announcement and reaction to it could change the major issues of the election cycle, and potentially swing even more votes into those camps who are running as anti-establishment. Trump has previously accused the Fed of waiting to raise rates in order to avoid embarrassing Obama:
But Janet Yellen is in a very difficult spot. If she continues to ignore the growing signs of recession, she runs the risk of letting one develop prior to the election. This would favor the Republican challenger, whether that is Donald Trump or Ted Cruz, neither of whom would be inclined to reappoint her as Fed Chairwoman if elected. Allowing the Greenspan bubble to bust on Bush’s watch sealed John McCain’s fate, allowing Obama to ride a wave of voter outrage into the White House in 2008. Yellen does not want Trump to catch a similar wave in 2016.
As a result, I expect the Fed to soften its rhetoric in the very near future.
As Schiff himself has pointed out many times before, the entire situation is made worse by the prolonged and belabored attempt at cushioning the impact. For better times to be had by all, the Fed out to stop propping up a market of speculators driving a bubble in real estate and other over-priced assets.
Since that isn’t going to happen, pay attention to the handling of the “political football” as Obama & co. try to pretend that job growth is happening and stability is here to stay.