I don't know why you say "Goodbye", I say "Hello, hello, hello".
I don't know why you say goodbye, I say hello
(Since we started with the Beatles, an alternative song could have been “Help” and some people would have even gone with “Back In the U.S.S.R”!)
Well, Hello Mr. President
American has spoken and apparently we are satisfied with economic growth of less than 2% percent. The good news is that at some point we will exceed expectations, the bad news is the bar has been lowered.
This blog has gotten more political than I want it to be this year, but this was the result of having a presidential election during difficult economic times between two candidates with starkly different economic philosophies. With that said, here are my final economic/political observations for this cycle:
Economic Growth: Just because Mitt Romney had a five-step plan, it wasn’t guaranteed to work and would have taken some time to implement. In addition, his tax plan sounded like something designed to get votes instead of solid tax reform. If President Obama (it hurt some to type that) leaves the economy alone and does not clamp down on the domestic energy boom, there is hope for an eventual stronger recovery. The U.S. economy has a tremendous ability to heal itself. Once the “Fiscal Cliff” gets resolved I expect GDP to make it over 2% (woo, woo).
Job Growth: Romney planned to “create” 12 million jobs in four years. However presidents can’t actually create jobs, they can only create an environment that is conducive for job growth. Unfortunately President Obama (ouch again), had problems grasping this concept in his first term, let’s hope for a change in term two. Even if job growth remains at its current slow rate for the next four years, the economy would still add around 8 million jobs. This is “only” 4 million less than Romney’s plan, which is still significant if you are currently looking for work. However, job growth should start to increase (again through self-healing) soon and continue to grow over the next few years. I would not be surprised if the economy adds the 12 million jobs (without Mitt’s help) over the next four years.
Obamacare: This is a huge mess. The system was destined to fail because it costs too much and couldn’t be paid for (without huge additional tax increases). But now we learn that while many were crying over the Supreme Court ruling on the individual mandate, the court also ruled that states do not have to implement the expansion of Medicaid provision. The states also can opt out of creating the insurance exchanges. The federal government is then supposed to set up the exchanges, but there is no money allocated to do this.
In addition, the economic law of unintended consequences is starting to kick in big time. Restaurants, hotels and other industries that use many part-time workers plan to cut workers hours to avoid the added cost of Obamacare. It is also expected that small businesses will stop growing when they reach 49 workers to prevent paying higher healthcare costs. Businesses (and individuals) will continue to make decisions that circumvent provisions of the law to save money.
Unfortunately, this is a train wreck that we get to watch from inside the train.
Rejecting a Business Mogul as President: In June I wrote two posts advocating electing a business person as president. While I still believe we needed someone who understands business running the economy, a business mogul has liabilities as a candidate. Americans want their president to have core convictions, even if they don’t agree with all of them.
A business mogul only has one core conviction: What makes me money? It is what makes the tycoon successful and requires that he changes direction as conditions change. Romney tried to use this strategy for political success but in politics this is labeled “flip-flopping”.
President Obama displayed more core values than Romney and core convictions beat no convictions every time. Sometimes an election comes down to the question of “Who will screw me less?” and many voters decided they couldn’t trust the rich guy.
An Apology: I apologize to any of my readers who may have been offended by anything that I wrote over the last few months that they perceived as too politically biased. I promise that I will not write anything politically oriented ever again, unless of course somebody does something economically stupid.
Excuse me, I am now going to take a shower and wash off all this slime.