1/13/2016
By Charles Payne, CEO & Principal Analyst

Anyone claiming that America’s economy is in decline is peddling fiction. What is true — and the reason that a lot of Americans feel anxious — is that the economy has been changing in profound ways, changes that started long before the Great Recession hit and haven’t let up. 

President Barack Obama

SOTU

Last night President Obama attempted to take a victory lap and yet warn about dire economic circumstances for many Americans.  The antithesis of his points of view was laced throughout the speech, where only a few people are doing well, but the economy is rocking.  The notion the economy has changed in profound ways is spot on, but the reasons for these changes can be traced back to the White House.

The war on success has taken a massive toll that will linger for years unless the message is altered to morning in America for everyone willing to lace up their boots not look for jobs that conform to their leisure time schedule.  I suspect President Obama was alluding to the knowledge economy of the next 100 years that will be dominated by Asian countries.

The problem is watered down curriculums and complaints that excuse academic excellence have been a hallmark of this administration.   Of course Americans feel anxious, but it’s because they haven’t been made to feel confident.

Peddling Fiction

President Obama played fast and loose with numbers last night to put a smiling face on an economy that's clearly under duress and clearly not living up to its potential.  I agree with this statement:

"The United States of America is the most powerful nation on earth, Period. It's not even close."

That statement should, however, been followed by: "But, our preeminence is being challenged from within and without as my policies to level the playing field and redress the wrongs of yesteryear have gut the heart and soul of the nation, retarding the very things that lifted us to the most amazing nation to ever grace the face of the earth.  Mr. President America's economy is in decline and its ability to right the ship becoming more difficult as debt and doubt coupled with deleterious taxes and dubious regulations keep growth anchored.

• Wages are lower
• Millions have fled the workforce
• Home values aren't all the way back for everyone
• Manufacturing jobs are still not at level Jan 2009
• Home ownership, Marriage, Birth Rates and Business Start Ups at Record lows
• 93% of US Counties not fully recovered from recession

We should look at employment-pop ratio for a real pulse on the jobs picture as it takes into account growing population.

On that note, the employment boom, which began under Ronald Reagan and peaked with George Bush, is in deep trouble.

Ronald Reagan inherited an economy in rapid decline with an employment to population ratio in rapid retreat.   He turned it around big time without gimmicks and with a fair amount of initial pain.

• Jan 1981 59.1
• Jan 1989 62.9

The ratio peaked under George Bush at 64.7.  If that was the ratio today, there would be 163,000,000 employed Americans instead of 149.9 million.

President Obama hasn’t been able to move the needle.

• Jan 2009 60.9
• Dec 2015 59.5

Additional examples fiction:

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Charles Payne
Wall Street Strategies

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