Freedom Line Blog

Regardless of one’s political preference, no patriotic American welcomes economic misfortune.  With this week’s news, however, one wonders whether we’re witnessing the onset of “Obama Malaise.”

Yesterday, the Commerce Department revised its already-sluggish initial 3.2% first quarter gross domestic product (GDP) estimate downward to 3.0%.  Additionally, the Commerce Department reported that corporate profits slowed to 5.5% in the first quarter of 2010, down from the 8% growth rate of the 2009 fourth quarter.

These numbers are disturbing because our economic recovery should be much stronger at this point, and gaining steam rather than slowing.  Coming out of the 1981-1982 recession, the last downturn comparable to the 2008-2009 recession, the U.S. logged remarkable GDP quarterly growth rates of 5.1%, 9.3%, 8.1% and 8.5% for 1983.  America’s torrid Reagan Recovery continued into 1984, with 8.0% and 7.1% growth rates in the first two quarters.  That constituted impressive growth, on the heels of Reagan’s tax-cutting and deregulatory platform.

In contrast, we’ve now witnessed GDP growth rates of 2.2%, 5.6% and now a deceleration to 3.0%.  Obama and Democrats take joy in claiming credit for our natural cyclical recovery, but what they should instead be doing is explaining why their policies are tossing a wet blanket over what should be stronger growth.