It was supposed to be a celebration. President Barack Obama visited an Ohio Chrysler factory Friday where he planned to tout the end of government ownership in the auto company and the success of his economic record generally. But facts got in the way of both.
Hours before Obama touched down in Toledo, the Department of Labor released its monthly jobs report showing that the economy created an anemic 54,000 jobs in May, sending the nation’s unemployment rate up to 9.1 percent.
Obama had nothing to say about the jobs report in his speech and when a reporter shouted a question at him about it later in the day the president ignored him.
Obama did tell the factory workers in Toledo that “Chrysler has repaid every dime and more of what it owes the American taxpayer.”
But that is just false. American taxpayers have sunk $14 billion into Chrysler since January 2009, and so far Chrysler has only paid $7.56 billion of it back.
If Obama thinks a $6.44 billion loss is a successful investment of taxpayer dollars, then no wonder real economic growth can’t get started under his administration.
“No American president since Franklin Delano Roosevelt has won a second term in office when the unemployment rate on Election Day topped 7.2 percent,” The New York Times reported this week.
President Ronald Reagan was elected in November 1984 with a 7.2 percent unemployment rate. That may seem high, but 24 months earlier, when the 1981 recession was just becoming the Reagan recovery, the unemployment rate was 10.8 percent.
Reagan didn’t crush Walter Mondale at the polls because the American people like 7.2 percent unemployment; he won because Americans felt hope from a 3.6 point rise in employment.
Will Americans be feeling as optimistic when Obama is judged next November? No two economic recessions are exactly alike, but as two-time Super Bowl champ Bill Parcels likes to say, “You are what your record says you are.”
And Obama’s record says now is the 23rd month of the Obama recovery from the 2008 recession. When the National Bureau of Economic Research announced the end of the recession in July 2009, the nation’s unemployment stood at 9.4 percent.
So while the Reagan recovery produced a 3.6-point drop in unemployment in its first two years, the Obama recovery has only managed a 0.3 point improvement.
What went wrong? The Chrysler bailout is a good place to start. It is illustrative of why Obama’s economic philosophy is failing.
Obama believes he can use the power and wealth of the federal government, deployed by government experts, to nimbly ease Americans’ economic pain and lay the groundwork for future economic growth.
It’s a noble goal, but government interference with market forces only deadens the economic signals that need to be communicated before an economy can truly recover.
A non-bailed-out Chrysler would not have fired all its workers or bankrupted all its suppliers. Sure, it probably would have had meant some more layoffs in the short term.
But assets could have been sold off, factories repurposed, labor contracts re-signed and suppliers could have found new customers. But instead of all that new economic activity, now Ford has to compete with another zombie car company.
Obama seems to have learned none of this. His advisors say he plans to make the auto bailout the centerpiece of his 2012 campaign.
Conn Carroll is associate editorial page editor of The Washington Examiner.