Since the Democrats' debacle in Massachusetts, President Obama has been campaigning.
In the State of the Union address, his new budget and other staged events for the faithful gather for hope, the president has the audacity to double down on class warfare and crowd-frenzying envy, and tout as success an economic recovery about as thin as the Chicago Cubs' World Series record book.
The economy is growing again, but the president, instead of divining new tax-the-rich-and-spend policies should recognize the economic recovery simply won't create enough jobs to drive down unemployment because his administration has not addressed the trade deficit.
Instead of blaming George Bush and indulging in sparkling oratory, our constitutional law professor and now president should seek a brief tutorial from White House economic adviser Lawrence Summers on GDP, employment and international trade.
Fourth-quarter GDP growth was 5.7%, but 60% of that was a slower pace in depletion in business inventories. Businesses continued to sell more goods off their shelves than they produced, but the reduction in inventories fell from $157 billion in the third quarter to $40 billion in the fourth.
In the arcane world of GDP accounting, that increased GDP by 3.4 percentage points -- another example of why most folks view economists as sorceresses dressed in academic robes in lieu of the customary pointy hats and magic wands.
Domestic consumption and investment, which most define the sustainable pace of GDP growth, contributed a paltry 1.8 to those 5.7 percentage points, and despite all the bravado from the White House, government spending contributed zero, zilch, nada!
With nearly $800 billion in stimulus spending and tax cuts, all Secretary Geithner's Treasury can manage is to take pails of water from the deep end of the swimming pool to the shallow end.
American businesses need customers to create jobs, and the statistic indicates domestic demand for what those enterprises make is growing at no more than a 2% annual pace. That anemic showing was in the second quarter of economic recovery. Ouch!
Exports did grow faster than imports in the fourth quarter, contributing 0.5% to growth, but that was likely a temporary jolt made possible by the dollar's dip against the euro. Transatlantic markets are not likely to drive U.S. demand up much more -- they are simply not growing very fast.
As the U.S. economy expands, the trade deficit will again drag the economy down, as the price of oil and purchases of Asian consumer goods and electronics rise. Unless Obama finally finds the courage to confront China about its mercantilist currency policies and protectionist tariffs and regulations against competitive U.S. exports, the U.S. recovery will just not accomplish the growth necessary to bring down unemployment.
An iron law of economics -- if there such a thing beyond the comfortable confines of college colloquiums -- is that GDP growth must exceed the sum of potential labor force growth and productivity growth to bring down unemployment.
In the U.S. that is between 3% and 4%. Labor force growth is determined by the expansion of the adult population, and productivity growth by technology advances.
To recoup jobs lost during the Great Recession, growth must be in the range of 5% to 6% over the next three years. That sounds ambitious, but remember, Chinese growth has been pushing 10% by exporting more to the U.S. than importing.
Unless the president addresses the trade deficit with China, he simply won't accomplish 4% growth on a sustained basis, never mind 5% to 6%.
Campaigning in Ohio or Baltimore or Timbuktu won't do that for him, taxing the wealthy won't help, another bogus jobs package and more loans for small businesses won't accomplish much, and his constant cursing the shortcomings of Republican governments past is getting tiresome.
Only coming back to Washington and getting to work on a trade policy toward China will save the economy and his presidency from disaster.
Professor Peter Morici, of the Robert H. Smith School of Business at the University of Maryland, is a recognized expert on economic policy and international economics. Prior to joining the university, he served as director of the Office of Economics at the U.S. International Trade Commission. He is the author of 18 books and monographs and has published widely in leading public policy and business journals, including the Harvard Business Review and Foreign Policy. Morici has lectured and offered executive programs at more than 100 institutions, including Columbia University, the Harvard Business School and Oxford University. His views are frequently featured on CNN, CBS, BBC, FOX, ABC, CNBC, NPR, NPB and national broadcast networks around the world.