By IPI President Tom Giovanetti
The Commerce Department reports that 1
st quarter 2016 economic growth was a lousy 0.5 percent which was even worse than the 1.4 percent of the 4
th quarter of 2015.
With only three quarters left in his term its now virtually assured that Barack Obama will be the only US president in history to never deliver a single year with 3 percent economic growth. The likelihood is that economic growth during the Obama years will have averaged around 1.55 percent. Engineer and entrepreneur
Louis Woodhill findsthat only Andrew Johnson Herbert Hoover and Theodore Roosevelt had worse records for economic growth.
For comparison purposes the George W. Bush administration averaged 2.10 percent economic growth with two years above 3 percent. Ronald Reagan averaged 3.5 percent over his eight years even including the 1982 recession. After the 1982 recession the Reagan economy averaged a whopping 4.9 percent.
Woodhill further reports that from 1790 through 2000 US economic growth averaged 3.79 percent. By contrast 2015 is the 10
th year in a row with sub-3 percent economic growth.
Prolonged periods of slow economic growth have a human cost. When economic growth is subpar workers dont get pay increases and even lose their jobs. In a growing economy people who lose their jobs are generally able to find equivalent or even superior employment redeploying their labor in more productive areas. But that doesnt happen when economic growth is subpar.
Its no wonder voters are angry. But their anger is somewhat misplaced.
A lot of anger is directed at trade and immigration with the accusation that free trade and immigration are killing American jobs. But the problem isnt the minor dislocation caused by trade and immigration. The real problem is that those dislocated dont have new better job options. In a growing economy they would. The problem isnt trade or immigration the problem is slow economic growth.
Similarly demands for higher minimum wages are also a symptom of slow economic growth. In a growing economy minimum wage jobs are temporary stops for workers as they climb the economic ladder. The problem isnt the minimum wage; the problem is slow economic growth.
Our elected officials have largely ignored the problem of slow economic growth or theyve wasted time and money on the wrong solutions like big-government spending programs. Theyve sown the wind and now they are reaping the whirlwind. The American people are blaming other countries and other people for a slow-growth wound that is self-inflicted. And if federal policymakers dont prioritize stimulating real long-term economic growth it is only going to get worse.
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Todays TaxByte was written by IPI President Tom Giovanetti.
