There is Barack Obama’s State of the Union and there is the state of the union anyone else can see.
The new year began with an underground nuclear-bomb test in North Korea, the worst first week for the Dow since 1897, and Iran forcing 10 U.S. sailors to their knees.
But the man delivering the State of the Union is “optimistic” because “unconditional love” will win.
Let’s get just one SotU venting out of the way before considering what Mr. Obama has wrought for his country and its politics as he turns into his final year.
It is beyond any conceivable pale that Mr. Obama would fail at least to note the 14 Americans gunned down in San Bernardino by committed Islamic terrorists, even as he stood there lecturing the country, at least three times, about not turning against others’ religion. In the past, he said, we have “turned toward God.” Ugh.
In fact, seven years of the Obama presidency have left the United States with a historically weak economy and a degraded national politics. The causal legacy of those two realities are— Donald Trump and Bernie Sanders.
Mr. Obama said in his speech that the economy is producing jobs, which is true, and that it is “peddling fiction” to say the U.S. economy “is in decline.” Really?
The U.S. economy’s average annual growth rate since World War II has been about 3%. In Mr. Obama’s seven years it has been about 2%. Some 65% of people think the U.S. is on the wrong track. You can discover a lot about the wrong track in that missing 1% of economic growth, Mr. Obama’s “new normal.”
The president is correct that the economy is creating jobs, but an alternative view would be that he has proven it is not possible to kill an economy with a GDP of $16 trillion.
Here’s what the new normal looks like. The gold standard of new job creation is business starts. Indeed, Mr. Obama said his new online tools “give an entrepreneur everything he or she needs to start a business in a single day.” Perhaps not everything.
According to the U.S. Bureau of Labor Statistics, the number of business establishments less than one year old rose steadily from 550,000 in 1997, peaked at about 650,000 in 2006, and then has gone straight down. The Kauffman Foundation’s 2015 entrepreneurship report puts startups in 2012 at just over 400,000.
The Brookings Institution in a 2014 report noted that since 2008 businesses closing annually have exceeded startups for the first time. Their yearly analysis dates to 1978.
That relative decline has a price. More businesses being born than dying is where real jobs come from, not the government tooth fairy. This data is a portrait of an economy losing its innate dynamism. That’s the real cause of “anger” in the U.S. electorate.
We’re supposed to believe that long-term “structural” factors are causing these shifts. Maybe. And if you want to wail about income disparity, go ahead. But if so, it is the president’s job to get impediments out of the way. Instead, this presidency has created them.
For example, Kauffman’s report also notes that the rate of entrepreneurship among people age 20-34—who hire employees like themselves, new breadwinners—began dropping fast in 2011. The president said Tuesday that ObamaCare would help new-business formation. It is doing the opposite. Millennials, assumed to be the Obama base, have entered adulthood to endure a decade of slow growth.
The leaders of Communist China lie awake at night worrying about creating 10 million new jobs every year to prevent a revolution. The elected leader of the U.S. lies awake every night thinking about jobs making . . . windmills and solar panels.
And we’ve got a revolution.
People wonder what accounts for the rise of Donald Trump and Bernie Sanders. Maybe the better question is how the Obama years could not have produced a Trump and Sanders.
Both the Republican and, to a lesser extent, Democratic parties have elements now who want to pull down the temple. But for all the politicized agitation, both these movements, in power, would produce stasis—no change at all.
Donald Trump would preside over a divided government or, as he has promised and un-promised, a trade war with China. Hillary or Bernie will enlarge the Obama economic regime. Either outcome guarantees four more years of at best 2% economic growth. That means more of the above. That means 18-year-olds voting for the first time this year will face historically weak job opportunities through 2020 at least.
Under any of these three, an Americanized European social-welfare state will evolve because Washington—and this will include many “conservatives”—will answer still-rising popular anger with new income redistributions.
And for years afterward, Barack Obama will stroll off the 18th green, smiling. Mission, finally, accomplished.