“The stock market may be near all-time highs, but those all-time highs were hit five years ago. So it’s hardly a great accomplishment.”
In any case, progress in the labor market can’t be measured by progress in the stock market, Morici says. “I’ll be convinced that the labor market is improving when the quality of jobs that people can get improves, when real wages start rising again and we start creating 300,000, 400,000 and 500,000 jobs a month.”
The economy also has to show more strength, he says. “The economy continues to grow quite slowly.” Gross domestic product gained 3.1 percent in the third quarter, and analysts forecast an expansion of about 2 percent this year.
We need growth in the range of 4 to 5 percent, Morici says. He sees former President Ronald Reagan as a good comparison for Obama on the economy, and the current president comes out lacking in Morici’s view.
“Ronald Reagan had very similar problems to Barack Obama,” he notes. “His unemployment rate peaked even higher. And at this point in his presidency, the economy was cracking along at better than 6 percent instead of 2 percent.”
So clearly Obama is the problem, Morici argues.
“The morning after he got his tax increase on the wealthy [the fiscal cliff agreement], which basically raises the cost of capital because it hits so many small businesses, he started talking about getting even more taxes.”
Moody’s Investors Services will downgrade the government’s credit rating, Morici predicts.
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