Charles Parker: It’s the Economy, Stupid…
By Charles Parker // February 10, 2015
Economy Will Be Major Discussion Point Over Next Two Years
It is certain that the economy will be a major discussion point over the next two years as President Barack Obama attempts to solidify a legacy and Democrat presidential candidate Hillary Clinton begins to make her case.
Both will tout a recovery from the recession of 2008 and will claim it happened in spite of Republican obstructionism and ill-fated attempts to revive the “trickle-down” economics of Ronald Reagan and George W. Bush.
So let’s take a look at four major economic indicators and actually see where the economy is, why it is there and where it is going.
The Stock Market has always been a bellweather in making analysis and predictions. And there is no question that the market has been bullish for much of Obama’s presidency.
Since 2008, the Dow Jones Industrial average has doubled and the Nasdaq has hit an 11-year high.
However, at the same time, the Federal Reserve has pumped about $85 billion per month into the economy, which it calls quantitative easing. It is like saying your salary is $35,000 per year, but we’ll actually give you $50,000 a year. You’ve got a lot of artificial income to spend!
Each time the Fed lowers QE, the stock market adjusts downward. It’s really impossible to tell what the true numbers of the market are, but common sense says it’s at least tainted by smoke and mirrors.
Manufacturing Activity is also a leading indicator for the economy. Economist Michael Montgomery of IHS Global Insight says that manufacturing, exports, and inventory building will all slow in 2015.
We are blessed that locally the space business is up and running and new businesses like Merritt Island Boat Works are going to build on the Space Coast.
But the reality is that POTUS cannot claim credit for our local stuff. Entrepreneurship and local tax incentives are providing the impetus there.
A look at the Gross Domestic Product is another way to take the temperature of an economy. Again, though, it is hard to measure the true numbers here.
While the GDP has increased 4% in the last few years, much of that can be attributed to the QE and the $800 billion stimulus package in 2009.
A rule-of-thumb that all agree on is that if the GDP drops for two consecutive quarters, a recession is likely. The Department of Commerce said that 2014 third quarter the GDP increased by 5.0%, but in the fourth quarter it increased by only 2.6%.
While there will be a probable upward adjustment later this month, it will certainly be lower than what was posted in September 2014. If so, the first quarter numbers for 2015 will be an important look at where our fiscal house is situated.
The Unemployment Rate can help gauge economic growth as well. And recent reports have noted that the picture is not as rosy as some in the Oval Office would like us think.
(This analysis must be prefaced by the statement that all presidents have claimed unemployment numbers in a skewed way. So, please don’t dispute my claims by saying they all do it. Yes, they do. That doesn’t make right – and doesn’t add value to the discussion.)
In January, there were 157 million participants in the labor force – either working (148 million) or actively seeking work (9 million).
That gives us the unemployment rate of 5.7%. However, there are 92.5 million people who are not actively looking for work.
If we factor them into the equation – the actual unemployment rate is an astounding 41%. That’s right – nearly half of America does not have a job.
So, though numbers can be manipulated by both sides, when looking at them realistically, our economy is not really one on which to build a legacy or a campaign on.
Republicans need to market these real numbers to the American people as they begin to stake their claims for 2016.
After all, it is the economy, stupid…
ABOUT THE AUTHOR
Charles Parker writes a weekly perspective/opinion column, Out on the Wire…Without a Net, on Space Coast Daily which appears every Tuesday.
He is a longtime resident of Brevard County and has been writing for various publications for the last 40 years – both print and digital. Parker covers space, politics, religion, and other news and special events for Space Coast Daily.
Currently, Parker is an aerospace engineering teacher at Merritt Island High School. He is also the director of both the da Vinci Academy of Aerospace Technology and the Academy of Hospitality, Entrepreneurship, and Tourism at MIHS. He is a professor of Humanities and World Religions at Eastern Florida State College and Valencia College.
Parker has worked extensively in the tourism and aerospace industries in Brevard. He has also been a United Methodist pastor and director of a non-profit to help young adults aging out of foster care. He was formerly a board member at Brevard Achievement Center and the Childcare Association of Brevard. He was appointed by Governor Jeb Bush to the Children’s Services Council from 1999-2003.
Parker earned a BA in Organizational Management from Warner University and a Master of Divinity from Asbury Theological Seminary. He is married, has four children and one grandchild.
You can reach him at firstname.lastname@example.org or follow him on Twitter @cpbrevard_scd
AUTHOR NOTE: These views are mine alone and do not necessarily reflect the views of Brevard Public Schools, Eastern Florida State College or Valencia College.