On December 16, the Wall Street Journal published a story by its chief economics commentator about why the economists got the decade all wrong. In it, economists have various theories that really do not dig deep into the macro or “main street” causes and conditions of GDP failures over the past 10 years. People forget the global impact of the financial crisis of 2008-9. There was a huge stock market sell off in late 2008, but more importantly, global markets and economies were hit hard from Dubai to Hong Kong and from Moscow to Frankfurt.

In another WSJ article called "Why the ‘Obama Recovery’ Took So Long," the economics luminary Peter J. Ferrara explains that "Mr. Obama carefully, studiously pursued the opposite of every pro-growth policy Reagan had followed."

To analyze the problems of why Obama had a weak economy for eight years straight, I developed a model that is based on psychology, tax policy, regulatory policy, global demographics, elective spending, and common sense.

Here are 13 key reasons why the economy was so poor during the Obama years

1. Added Taxes on Working Families — New higher taxes on homes, services, utilities, fuel, heating oil, cellphones, internet, home security, flights, cable TV, alcohol, tobacco, tanning, and more. These taxes can add up to 7-20% of middle class, working family income.
2. State, County, and city sales taxes are up from 4-5% to 6-7% in many cities over last 10 years. Local taxes have reduced and negatively impacted GDP in recent years. State and Local Taxes (SALT) are the only taxes that many lower-income families are paying, as lower-income workers pay little or no federal taxes..
3. Reduction in Global Buying of U.S. Products and Services — China and other countries may have instituted a “buy local first” policy many years before the U.S. began trying to lure manufacturing back to the United States.
4. The U.S. Corporate Tax Rates were the worst in the world under Obama. Record high corporate tax rates and a higher number of regulations under Obama pushed U.S. money out of the country and deterred the repatriation of profits. Companies such as Google, Microsoft, Facebook, Apple, and others are inclined to leave money offshore when U.S. taxes are too punitive. The new Trump tax law has brought billions back to the U.S. and even stock buybacks have put tax dollars back into the U.S.
5. Obama’s New Debt — Obama created $10 trillion in new debt during a zero interest rate time frame. Rates did not inch up from zero until 2015, during the last months of Obama’s presidency. The economy under Obama should have been booming with the massive stimulus. As such, this new Obama debt represents a large facet of our annual deficits. According to CNBC, Obama started with $10.6 trillion in total debt and left his job with a whopping $19.9 trillion in debt, plus another $17 trillion in unfunded liabilities of Obamacare.
6. Global Demographics — The global growth of Arabia, Africa, India, China, and Asia forced companies to focus on demographics — to ask, where are the consumers? The USA is only 4% of the global population, and it would be silly for any company not to refocus on selling products and services where the future consumers will exist in order to build a global brand and distribution. There are over 5 billion people in Eurasia in over 100 countries. Thus, U.S companies must compete globally.
7. War and Lack of Diplomacy — For many years, the U.S. has had major military activities and expenditures in places like Afghanistan, Iraq, as well as Syria and South Korea. With a lack of diplomacy, the costs of conflict and supporting offshore operations has debilitated U.S. GDP for a generation. With Obama’s military interventions in Syria, Yemen, and Libya, the costs continued to suck money out of the U.S.
8. New Artificial Inflation Created by the Federal Reserve —At the end of the Bush years, we discovered that when the Federal Reserve raises interest rates to normalize rates, it can hit middle class disposable income hard by increasing debt payments for families with credit card debt, student loans (40 million families now compared to few 30 years ago), mortgages, small business loans, and auto loans. In May of 2004, the federal funds rate was 1% and the Federal Reserve had jacked up rates to 5.25% by Dec of 2006. Thus, the Bush economy was in shambles within two years of the Federal Reserve hiking lending costs on credit cards, auto loans, home loans, and student loans. This new theory of artificial inflation is called the M-SIT or “Mentz Stealth Inflation Theory”.
9. Higher Taxes on the Middle Class and Business Owners — Obama hit workers with 21 new taxes. These taxes took money from states and main street and brought it to Washington.
10. Healthcare Spending — Obama took money from workers from all 50 states for healthcare, but analysts say that 37-40% of that tax from working families was sent to only four states that stridently supported Obama’s reelection: New York, Massachusetts, California, and Maryland.
11. Currency — The U.S. currency has remained strong. If the dollar had been less artificially strong in the last 10 years, there may have been a much larger volume of exports and therefore an increase in GDP.
12. Urban taxes are up dramatically from 20 years ago. Urban taxes are considered unfair by many due to their disproportionate effect on the working poor’s disposable income. Over the last 40 years, populations and workers have been more concentrated in urban areas.
13. Sovereign Risk and “Skeptic Ambiguity” — Psychologically, there was a sovereign risk impact when Obama was elected. With all major overseas players wondering how bad taxes and regulations could get in the U.S., the global players invested elsewhere. I refer to this problem as the SSA: Supposition of Skeptic Ambiguity, where countries and sovereign funds pulled money out of the U.S. due to their distrust of a new leadership team prediction in 2008. In the same vein, the U.S. stock markets took off as soon as Trump won election

Then comes the Mentz "SITT or Secular Investing and Taxation Theory." This theory relies on the fact that water flows where there is the least resistance. Thus, after Bush’s Federal Reserve rates blew up the economy and created a housing collapse, Obama won the election and presented an unpredictability problem. Global investors decided to tactically avoid the new Obama leadership with all its new regulations, new red tape, and new taxes, and instead put money where it would provide the most yield with the least tax.

While I am not a pure economist, I am a tax and financial planning economist who has consulted with all types of clients in the past and even provided free tax-preparation assistance in the inner city. If you work and consult with real families in the inner city, you can learn something about people, disposable income, and psychology

Fortunately, I was also able to work for a Wall Street firm and help some of our wealthiest families, providing financial guidance and suggestions in several states from DC/Maryland down to Texas. This Wall Street firm experience also revealed how the rich and successful are focused on wealth preservation. With the new Trump tax code, the compound effect of lower corporate rates, lower regulations, a focus on peace and diplomacy, and an enthusiastic spotlight on American citizens, this country is viewed by outsiders as a winning team for the first time in 30 years.

George Mentz JD MBA CWM Chartered Wealth Manager ® is a licensed attorney and CEO of GAFM ® global education, which is an ISO 29990 Certified professional development company operating in over 50 nations. Mentz is an award-winning author and advisory board member to several companies around the world in education, charities, and crypto currency.