"Recent data suggests that the current economic recovery is both sluggish and slowing with unemployment stubbornly high," this from a page one story in Investor's Business Daily.
The Obama/ Bernanke partnership has been a bust.
The Fed is winding down Ben Bernanke's experiment in money printing called "QE2." He trumpets his success saying that QE2 has pointed the U.S. economy "in the right direction." But did it really? It turns out that QE2 has created maybe 700,000 full-time jobs, but at a cost of about $850,000 for each job.
All QE2 did was create a boom in the stock market. Wall Street bankers reaped millions while the average investors barely madeback some small amount of the money that they lost during the 2008 crash.
We believe this boom is an easy money mirage, as MarketWatch.com reports, "But even the stock market boom hasn't been what it appears. An analysis shows that most of the rise in the Standard & Poor's 500 Index under QE2 has simply been a result of the decline in the dollar in which shares are measured.Measured in hard currencies, the stock market boom has been much less impressive. In Swiss francs, the S&P has risen by just 8.4 percent since Aug. 27. In currencies like the Swedish krone and Australian dollars it's even less. Measured in gold, the S&P 500 is up just 4.5 percent."
QE2 has had little visible effect on the real economy. Over the same period, the number of part-time workers has gone down by 600,000. In other words, we've basically shifted 600,000 or 700,000 workers from part-time jobs to full-time jobs.
Marketwatch.com continues: "The percentage of the population in work is actually lower today - 58.4 percent, compared to 58.5 percent last August. The percentage of the work force in actual work, the so-called 'participation rate,' has fallen by half a percentage point."
Housing is no better because of QE2, April housing starts fell 11 percent. Marketwatch.com says, "Housing is double-dipping. According to the National Association of Realtors, the average price of an 'existing' home was $177,300 in August, just before QE2. Now it's $163,700 - or 8 percent less.Economic growth has slowed. It was 2.6 percent last summer. It's a miserable 1.8 percent now.Meanwhile inflation has risen, from 1.2 percent before QE2 to 3.1 percent now."
We all wish for better news, but Obama's policies are pointing us in the wrong direction. Regulation of business is growing. One CEO of a mining firm we talked with said he is looking for new projects abroad. "I have been fighting for nearly a decade to open a new mine in Montana, and at every turn the government places roadblocks in my way. How am I to create any jobs?"
If Obama's tax policies are enacted then we could see marginal income tax rates of 60 percent in some states. Obama clings to socialism and his new programs in healthcare and welfare. They all retard growth. Unemployment taxes are at record highs in most states and this further depresses hiring.
The Fed has invested nearly $2 trillion in Treasury debt since 2008. The investment hasn't paid off, but when the relentless buying of U.S. Treasury debt ends, we have no similar experience to guide us. One result could be even further collapse and a full blown depression.
Floyd and Mary Beth Brown are bestselling authors and speakers. To comment on this column, email email@example.com. Together they write a national weekly column distributed exclusively by Cagle Cartoons newspaper syndicate. Floyd is also president of the Western Center for Journalism. For more info call Cari Dawson Bartley at 800-696-7561 or email firstname.lastname@example.org.