Mr. Obama pivots to the Economy. Is that a good political strategy?

Mr. Obama used his weekend address to try and refocus attention away from disastrous foreign policy news and to something that can motivate his base.  Even Democrats are attacking his “hands  off” approach, with Senator Dianne Feinstein calling him “too cautious.”  So its only natural that Mr. Obama would like to change the subject.    And par for the course, Mr. Obama reiterated his calls for a higher minimum wage, an old stand by and favorite:

“Raising the minimum wage would be one of the best ways to give a boost to working families. It would help around 28 million Americans from all walks of life pay the bills, provide for their kids, and spend that money at local businesses. And that grows the economy for everyone,” the president said. “The bottom line is, America deserves a raise. But until we’ve got a Congress that cares about raising working folks’ wages, it’s up to the rest of us to make it happen.”

But just as Mr. Obama declaring that ISIS/ISIL was “JV” didn’t make it so, neither does his assertion that a minimum wage increase would help make it good economics.  We’ve talked before about the minimum wage here, so no need to rehash that–let’s just consider the pivot to the economy in general.  Is that wise? Perhaps, but a few charts may help us think about the economy under Mr. Obama.

First up, let’s look at Labor Force participation rate.  It is true that the unemployment rate has dropped to almost respectable levels–but are those leaving the unemployment roles getting jobs or are they leaving the work force because they are discouraged?

Civilian Labor Force Participation Rate

Our LF participation rate has steadily fallen during Mr. Obama’s tenure–not a sign of health in a growing population.  Let’s also consider what kind of jobs are being created?  If our criticisms of Mr. Obama’s policies are true that they discourage full time employment, we’ll see an increase in part time jobs…which we do.

Part time economy

Part of our concern over minimum wage hikes is that they hurt the least skilled workers the most…teenagers and minorities.  So what has happened to employment by young people in the Obama economy?  A picture tells a thousand words.youth employment

So what are we left with when thinking about Mr. Obama’s economy?  Well one thing is for sure left to us–an increase in the national debt of $7 trillion and still rising at a rapid rate.  This year’s budget deficit (after Mr. Obama’s tax increase) is still greater than any previous administration ever–expected to come in at $506B.  That’s right, we’re still spending at over a half a trillion dollars of red ink in year six of the administration.

fredgraph national debt

So does thinking about the economy make you feel better?  Only if it allows you to stop thinking about our foreign policy.

11 thoughts on “Mr. Obama pivots to the Economy. Is that a good political strategy?”

  1. It’s sad to see that while President Obama is diverting attention away from foreign policy, that attention is being shifted towards these domestic problems that he has had a part in making. If a significant raise to minimum wage did get passed, I bet these statistics would start to look even worse. It would be interesting to see how this outlook on the U.S. economy compares to previous presidents we have had. What would it take to start healing this problem rather than keep battling incoming calls for a higher minimum wage?

  2. President Obama’s shift from Foreign Policy might actually have been a wise move. Granted, it might not have been the best idea to switch to the Economy, but I don’t think President Obama wants any more press about Foreign Policy. Almost two years ago exactly, the President and his administration were placed (and still are) under scrutiny from the Benghazi attack. Now, Obama is taking fire for more of his foreign policy failures. However, it must be noticed that, while Benghazi caused outrage among Republicans for the most part, Democrats have been recently joining the outcry. Obama does not like criticism, especially from his own party, and that means that he will do whatever it takes to get his party back on his side. Choosing the economy was definitely not the best idea, but it was a better alternative for him than to relive Benghazi all over again.

    1. I agree that it was probably one of the better moves he’s made to move away from foreign policy, but what would be an alternative subject, besides said foreign policy and economics? It seems as though all “bad” in the world that the U.S. has a hand in can be placed in one of those two categories. Ferguson, as another issue that has the national spotlight, is an option, but is that any better? It seems as though it’s become a lose-lose situation. Or at the very least, a “which will cause us the least grief” situation.

  3. If you own stock, are part of the 1% or even the 20% you might feel pretty good about the economy. Otherwise not so much.

  4. I agree with what Andrew said above. It was a wise move for his political party to avoid the topic of foreign policy since that hasn’t been going so well. President Obama’s address to the nation gives the uneducated a false hope. By telling them that he will lower unemployment, he doesn’t explain that he will just be creating more five thousand a year jobs. The charts in this article prove this and show the negative affects of his health care reform as well. The number of full time jobs with benefits has decreased because employers do not want to pay health care. The fact that we have spent 500 billion is really exciting too. It was a wise choice to avoid the topic of foreign policy by President Obama, but the economy of the United States is looking just about as good as our foreign policy right now.

  5. Maybe Mr. Obama’s pivot had more to do with politics in general than it does with the politics of elections. Congress is coming back from its summer break, so by focusing on something else instead of the foreign policy he has take care of on his own for the past month, he might be telling Congress they need to act on ISIS and other foreign policy matters. With Congress back in the picture, Mr. Obama can now focus on more than one thing at time and get back to handling more issues.

  6. I think it was a smart move by him to try and switch topics, but I don’t think it really changes what is in the spotlight. The media is going to keep reporting on what is happening around the world whether he talks about it or not. But he did choose the right economic topic to talk about. While many economists and those who have studied it agree that raising minimum wage is hurtful, the average citizen does not. He is sure to find support from much of the population by calling for an increase.

  7. President Obama’s shift in focus is a beneficial move for him politically, but I don’t think it’s a smart move in general. Raising the minimum wage sounds great on the surface for those employed at fast food chains and other minimum-wage jobs because it would simply pay those employees more money for their work. However, most of these people who support the increase don’t consider the potential consequences that could result from a minimum wage increase. Businesses will have to make up that additional money that goes into a higher wage, and this could cause managers to lay off some of their workers or cut down on worker hours to balance out the funds (which kind of defeats the purpose of raising the minimum wage). Overall business prices may also go up, which hurts consumers and may dissuade them from shopping at that location, therefore hurting the business as well. Although it is a difficult economy for many American families, I don’t think that raising the minimum wage will relieve the problem; it might just make it worse.

  8. In order to kill the argument that raising the minimum wage will kill jobs, I would like to look at the effects on businesses. Rather than cutting jobs, businesses employing low-wage workers will offset wage increases in other ways. When wages are higher, employees will stay in their jobs longer, which will save employers the expense of hiring and training new employees . There isn’t any evidence showing that raising the minimum wage kills jobs, but there is evidence that shows that it kills job vacancies.

    1. “There isn’t any evidence showing that raising the minimum wage kills jobs, but there is evidence that shows that it kills job vacancies.”
      Can you point to any evidence that supports this assertion? It is, of course, exactly opposite the consensus of economists that the minimum generally harms those with the least skills. If you think it lowers expenses of employers for employee retraining, why would the employers not of their own choice raise wages? If raising the minimum wage is generally a good thing, can you give any economic arguments as to why we should not raise it to $50/hr, or better yet, $100/hr? Show me your skills as a Berean…

  9. I find it somewhat scary how the issue of minimum wage is being presented by the President as an entitlement issue. I know this was not the primary focus of the post but it is the reason behind the issue at hand. The US feels an undeserved entitlement, to get this entitlement it will drive inflation up and (as stated) hurt the lower class workers.

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