Now there’s a word not often heard: Iatrogenic (ahy-a-truh–jen-ik). It’s a medical term that generally refers to very adverse and unintended consequences caused by mistakes made by physicians or staff at hospitals. Sometimes patients die or, more often, simply languish without improving because of iatrogenic treatment. That sums up Washington’s approach to our seriously languishing economy. It is a victim of iatrogenicity. Dr. Obama and his team of economy docs in Washington are making things worse.
Let’s examine the symptoms the economy (our patient) is presenting. Clearly, the patient was ill as a result of the economic virus (the recession that began in December of 2007) that quickly spread throughout the United States and much of the world. Fortunately, that economic viral attack was determined to be over in June of 2009, but it left the patient weakened. The prognosis for recovery was pretty good, however, as nearly all past history shows that the more acute the economic virus, the more rapid and robust the recovery. But not this time.
Here’s what we see looking at the patient’s chart: While the virus was officially over 16 weeks after Drs. Obama and Bernanke jointly took responsibility for the patient’s care, the number of unemployed Americans has increased during the time they have been co-managing the case from 12.05 million to 12.54 million. The unemployment rate jumped from 7.3% to 10.1% and is now reported to be back to 7.8%, which seems to contradict virtually all of the patient’s other symptoms. The number of long-term unemployed has risen from 2.7 million to 5 million. On their watch, middle-class annual income has deteriorated from $54,962 to $51,002, and the number of people in the work forces is diminishing rather than increasing.
The Kaiser Medical Foundation has determined that employer based health insurance premiums have jumped over $2,500 a year even though Dr. Obama assured all his patients just before he took over the case that their premiums would actually diminish by the same amount during his first term. College tuition costs have jumped from $6591 to $8,244 during Dr. Obama’s watch, and the number of Americans in poverty has increased from 39.8 million to 46.2 million. Concurrently, the number of Americans requiring food stamps has jumped from 32 million to 47 million. The consumer price index since Dr. Obama has been on the case has also increased 9.1%, which means the cost of living has steadily increased while incomes have steadily decreased.
The standard treatment for our economic patient should be to dramatically increase economic growth, but since Dr. Obama has been on the case, U. S. global competitiveness has, according to the Global Competitiveness Index, dropped from 1st to 7th in the world.
So, what’s the prognosis? Sadly, there is a growing consensus among the experts, including a report by the Congressional Budget Office, that the patient is in danger of relapsing into recession and unemployment may spike up to 9% during 2013. Now, it is true that the patient was quite ill when Dr. Obama took charge, but that was nearly four years ago, and none of the treatments he has administered, or is currently prescribing, have improved, or will improve, the patient’s health very much. Dr. Obama, meanwhile, continues to blame the prior practitioner for the patient’s poor progress, and warns that changing practitioners will set the patient back even more.
Perhaps it’s time to review the treatments that have, thus far, been administered by Dr. Obama and his colleagues. Drs. Dodd and Frank, who have changed professions and are no longer on the case, wrote a voluminous 849 page iatrogenic prescription before they left (called Dodd-Frank, which enshrines Too-Big-To-Fail into federal law), and which, so far, has resulted in over 9,000 pages of instructions to the patient (called new federal regulations). Unfortunately, their prescription never addressed what many experts consider to be the leading cause of the patient’s distress; the mal practices of Drs. Mae and Mac.
Dr. Bernanke has administered three courses of shock therapy known as QE 1, 2 and 3, which attempts to flood the patient’s system with a monetary nutrient (cash) even though the patient’s system is loaded with the stuff. It’s there. It’s just locked in the bowels of the system and not moving where it’s needed. It does, however, cause a temporary iatrogenic glow called the wealth effect even though the patient is no wealthier (and certainly no healthier). It’s sort of like trying a little blow (if we may borrow from Dr. Obama’s earlier writing).
Upon assuming responsibility for the case, Dr. Obama prescribed an emergency stimulant highly priced at just under a trillion dollars. He advised the patient that the stimulant would be directed at the economy’s muscular sinews known as shovel-ready jobs, but nearly all of the funds were siphoned off to pay for already over-burdened personnel budgets, and, two-years later, Dr. Obama admitted that not very many of the so-called shovel-ready jobs were really shovel ready. The patient has incurred vast debt for this largely failed treatment.
Then a supplemental arterial system known as the Keystone Pipeline, which really was shovel ready, was offered from Canada with job creation estimates running from a low of 5,000 from Dr. Obama’s staff to a high of around 100,000 from Utah’s John Huntsman who was also competing to treat the patient. Dr. Obama nixed the treatment and the last we heard the Keystone Pipeline is being directed to serve a major Chinese patient, who is now showing signs of the same affliction from which Dr. Obama’s patient is suffering here in America.
Dr. Obama did bring in the well respected Drs. Simpson and Bowles for consultation, but rejected their advice, which was to focus primarily on treatments to encourage muscular systemic economic growth. Dr. Obama instead decided on an iatrogenic treatment protocol to redistribute existing muscle rather than to encourage the development of new muscle.
Regrettably, Dr. Obama largely ignored his patient’s malady, as he was preoccupied with a pet project to revamp medical care in the United States. He succeeded in creating the Affordable Care Act (aka Obamacare) but, it seems, weakened his patient in the process. Obamacare discourages the very job creation and economic growth his patient needs by forcing employers to either provide health insurance or pay a fine. When hiring is made harder and costlier, there will be less of it and the patient will continue to languish.
Many colleagues who are big fans of Dr. Obama concede, generally in whispers, that this distraction from his patient’s care was poorly timed and poorly executed. Nearly all of his colleagues who supported his plan admit they never read it. In fact, his biggest supporter told all of her colleagues they would have to approve the Obama plan so they could see what was in it.
One impartial observer, Mark Zandi of Moody’s Analytics lamented, “It distracted us from the economy (the patient).” Another uniformly respected authority, Douglas Holtz-Eakin, former Director of the Congressional Budget Office, advises, “the president subordinated job creation to other goals, (and) when economic growth is so important, you have to be ruthless in focusing on it. You have to err on the side of growth, and they haven’t done that.”
An equally harsh judgment was rendered by Dr. Nariman Behravesh Chief Economist of the international consulting firm, IHS and author of “Spin-Free Economics: A No-Nonsense, Nonpartisan Guide to Today’s Global Economic Debates” published by McGraw-Hill. Dr. Behravesh leads 400 professionals located in North America, Europe, Asia, Latin America, the Middle East and Africa who cover economic, financial and political developments in over 200 countries. Dr. Behravesh writes, “The recovery is subpar. After the economy hit bottom in mid-2009, it has grown at a feeble 2.2 percent annual rate (and declining). By contrast, growth in the nine other recoveries since 1950 has averaged 4.2 percent for their first three years. During the slump, the economy lost 8.8 million jobs (and barely 50 percent have returned). The grim job figures explain why a great many people don’t believe there’s a recovery.”
Iatrogenic treatment is recognized as one of the biggest problems in medicine. Now, under Obama, it plagues our economy as well.