"Ignore the Haters: Obama Helped Save the U.S. Economy"

"Ignore the Haters: Obama Helped Save the U.S. Economy"

The truth is that, given the severity of the Great Recession and unprecedented Republican obstruction, Obama’s economic policies have been a success.

The most consequential economic policy of Obama’s presidency was the American Recovery and Reinvestment Act—a.k.a., the stimulus. Right-wingers deride it, but economists widely agree—92 percent of them, according to a Chicago Booth poll—that the unemployment rate was lower in 2010 than it would have been absent the stimulus. ... When the financial crisis hit, Americans cut back on their spending, forcing businesses to fire employees, who then cut back on their own spending. As this process repeated itself, it created a “hole” in demand. The stimulus was designed to fill that hole. It wasn’t big enough, but that really wasn’t Obama’s fault. As Mike Grunwald, the man who wrote the book on the stimulus, has written, Obama faced political opposition in Congress to pass any stimulus larger than $800 billion. He did the best he could.

For many Americans, it’s hard to imagine that the stimulus worked. The unemployment rate peaked at 10 percent and real wages have been stagnant even as unemployment came back down. When Obama touts the current 5.9 percent jobless rate, many financial analysts roll their eyes. Yes, the unemployment rate has fallen, they note, but labor force participation is also at its lowest point since the late 1970s. A falling unemployment rate is not good if it’s the result of workers dropping out of the labor market. But not everybody who’s decied to stop looking for work has done so for the same reason. Some of them are baby boomers who are retiring, some are millennials who have gone back to school, while others really are prime-aged workers too discouraged to search for work. Meanwhile, millions of Americans have found work. When Obama says “our businesses have created 10 million new jobs,” it’s a legitimate testament to how far we’ve come.

To judge Obama’s economic policies based on the economy’s actual performance ignores the limitations of the presidency. He cannot pass laws. And when he does want to pass legislation, he has to work with Republicans to do so. This brings us to the most damaging economic policy of Obama’s presidency: the sequester. This was the ransom Republicans earned for taking the debt-ceiling hostage in 2011. ...

Even so, Obama never wanted the sequester and consistently sought a deal to eliminate it. He predicted that the sequester would damage the economy—and he was right. By one estimate, the sequester cost Americans 1.2 million jobs in 2013 alone. The Murray-Ryan budget relaxed some of those spending cuts, but the majority are still intact and will continue to hurt economic growth. Is it fair to blame Obama for the economic damage of the sequester? Maybe a little bit, but most of the fault lies with the GOP.

...

But it’s also true that the U.S. economy is in far better shape than the rest of the developed world. Growth is stronger and unemployment is lower. As Krugman explains in the current issue of Rolling Stone, the U.S. recovery has even slightly outpaced the historical average for a recovery after a severe financial crisis. And this is despite the reckless, destructive behavior of the Republicans.

The recovery still has a long way to go, of course. And given Congressional gridlock, Obama has little control over the economy right now. Whether or not American workers finally feel like the recession is over and see their wages rise is in the (capable) hands of the Federal Reserve. But given what Obama can control, his economic policies have done a pretty good job in the aftermath of the Great Recession, even if it’s impossible to convey that in a speech.

http://www.newrepublic.com/article/...-record-strong-even-though-wages-are-stagnant

One thing I criticize Obama for is he is not a "great communicator" a la Reagan or Clinton, and has failed to effectively sell the accomplishments made under his administration. As a result, public perception has been sway by RW media. As a result, even many Democratic candidates are distancing themselves from Obama when they could be embracing the accomplishments.

Part of being a good leader is effective communication. Despite Republican obstructionism and austerity (which also has not been communicated effectively) there are many accomplishments that could be trumpeted but are not. In this regard I do not give Obama high marks.

 

This was one of the slowest recoveries since the Great Depression. The unemployment rate is bogus because it is based on members of the actual work force. It has shrunken so therefore the percentage measures a smaller number. Some estimates place the actual unemployment rate as high as 14%. Obama himself joked that the shovel ready jobs were harder to find than expected. The number of people on welfare and the number of people on disability is also very high. Many of the new jobs are part time. Other countries such as Canada have recovered faster than the US. Other nations such as Lativa and Estonia while poor opted to suffer austerity rather than borrow their way out of an economic hole. Their economies were growing much faster than ours. Some countries which recovered more slowly than ours practiced more socialism than we.

Obama could have negotiated us out of the sequester, but he told Republicans it was his way or nothing. Republicans were ready to negotiate one budget agreement they had worked on with Democrats, but Obama suddenly raised the stakes, and Republicans backed off.

Polls show most Americans know the economy is still sluggish and is improving in part in spite of Obama's policies. Obama can make all of the speeches he wants. People know what they are living, and it is different from the speeches.

 

I get it.But it's just hunky-dory for Obama to go out on fundraisers literally
Hating on groups like the Tea Party,the NRA and anyone associating with the
Koch bros. { who have also donated to democrats }.
It is so magnificently hypocritical.That Obama runs around literally hating on
America { You Didn't Build that Business } and americans and is never called
on the carpet by the lapdog MSM.

 

Yes, and in both cases brought on by Republicans and their policies. However, this time it's almost worse because the so-called "loyal opposition" is doing everything in their power to retard or even derail the recovery, all the while using the megaphones of the right wing noise machine to blame the president. His biggest problem is not so much that he wasn't an effective communicator, but that he really didn't believe any American, regardless of party, could put their party first and the country last.

Yeah, I heard that story and it's as ridiculous today as the first time I heard it. The only negotiation the Republicans wanted was total capitulation and not even the Speaker of the House dared to cross them.

 

True...he is not a "great communicator". Ever time he tries to communicate he ends up lying.

 

There's NO recovery.Yes the uber wealthy are getting MORE rich {ungrammatical }
Especially those Bureaucrats that Voted for Obama and got Obama graft.
Obama has built a virtual Political Aristocracy { Boom Town } right in and
around Washington D.C. THE Two wealthiest county in America are right outside
Washington D.C.

 

Like the stimulus the article attributes to Obama, and the core of economic recovery?

I always hated the stimulus. I derided Bush for the fleecing. Obama's handling of it was downright criminal. I don't know it's impact on the overall economy 10 years down the road.

I know our economic numbers are based on smoke and mirrors. We have been printing empty money for a long time, and a lot of it.

 

Yeah but take away Obama's lies { bullcrappin' } and he'd virtually have nothing to
blather on about.It'd be like Al Sharpton talking about Race and saying something
nice about our Founders. It ain't gonna happen.

 

LOL. Thanks for the laugh.

 

Now we have reports that the Uber wealthy { Billionaires } are now hoarding Cash.
Kinda like the way Homeland Security bought up all the new ammo that was being
made { 1.6 billion rounds in the last 4 years }. In order to keep ammo out of the hands of
gun owners.The Government created a shortage.

 

If that's truly the Case how come No reporting on Inflation { Former fed Alan Greensberg
was obsessed over controlling Inflation } or the CPI.
Because the commies in this Gov.'t can't bullcrap the public when it comes
to their pocketbook or kitchen table talk.Average yearly paychecks are down 8%
since Obama took office,and that's every pne of his 6 years.
Electricity is rising with no end in sight.Obama flatly warned he was on course to
Bankrupt coal.Obama is secretly shutting down in record number Coal burning
power plants.Then rewarding his buddy Jeffrey Immelt of G.E. with power turbines
being sold for power plants all the while Exempting General Electric form all domestic
taxation.

 

He's the "Great Prevaricator"!



Less than 2% mean GDP growth after 6 years? That's about .8% above a recession the whole time. That's supposed to be an accomplishment? I can't tell if the OP is being facieous, making a joke or not.



Reagan's first 6 years after the Carter fiasco. Above 4% mean growth over the same time frame. That's a recovery.

 

All true, but like with any truth the right shuns it. The right wing America haters wanted GM to die at a time when it would have crippled the country. Thankfully we actually had smart people in charge at that time.

 

I agree this recovery, like the one before it and the one before it, have been more sluggish than ones in the past.

It is not just this recovery that has been slow and weak. Compare the recoveries in 1990, 2001, and the current one, with earlier recoveries:



As the (now somewhat outdated) chart shows, all the recoveries before the mid 1980s were sharper and faster.

IMO, this is not simply some gigantic coincidence. Consumer spending drives the economy and recoveries, but has been anemic. The great engine of spending, the middle class, is tapped out and overridden in debt. As a result, we are not seeing growth in personal consumption like we did in earlier recoveries:

A big reason why we aren't seeing spending from the middle classes is that since the early 1980s is because we've taken almost all the growth in income and wealth of this country over the past 30 years and diverted it to the richest 10%, and mostly to the richest 1%:

Today the 1% has double the share of the nation's income (20%) and nation's wealth (40%) than it did 30 years ago:



And the top 10% are getting about 65% of the nation's income, versus about 50% 30 years ago. That means that the bottom 90% are today only getting about 50% of the nation's income, compared to about 65% 30 years ago:



That is 15 percentage points of $14 trillion in gross national income now going to the top 10% instead of the bottom 90%. Which equates to, proportionately, $2.1 trillion dollars going to the richest 10% instead of the middle classes, every single year.

If the richest 10% spends even 75% of its income, that equates to about $500 billion less spending in the economy, every single year. That is about the equivalent of 2 Stimulus packages every single year!

As a result of this huge transfer or income and wealth, the middle class, the great engine of spending (and thus demand) doesn't have the additional resources to spend. So when we have a recession, is it any surprise that recovery is slower? We've taken the assets and purchasing power away from the middle class, who spend it, and transferred them to the richest, who (proportionately) do not spend it, and thus have gutted the engine of growth and recovery for our economy.

The problem isn't an overall lack of money to spend. There are trillions and of trillions of dollars sitting in offshore bank accounts and in corporations and banks not being spent. The problem is that our "trickle down" policies over the past 30 years have not "trickled down" but instead have transferred those assets to people who don't spend them, and away from people who do.

As a result, the growth of real personal expenditures in the past four years has been roughly half what it was 30 years ago:

Year - % chng real personal expenditures
1982 1.4
1983 5.7
1984 5.3
1985 5.3
Average: 4.4

1992 3.7
1993 3.5
1994 3.9
1995 3.0
Average 3.5

2002 2.5
2003 3.1
2004 3.8
2005 3.5
Average 3.2

2010 2.0
2011 2.5
2012 2.2
2013 2.0
Average 2.2

Source data: http://bea.gov/iTable/iTable.cfm?ReqID=9&step=1#reqid=9&step=1&isuri=1
Table 2.3.1. Percent Change From Preceding Period in Real Personal Consumption Expenditures by Major Type of Product

So should it be any surprise that when we look at the recoveries since the Reagan "trickle down" revolution took effect, including the current one, we see shallower, flatter recoveries than we did before?

Also, consider the following:

Reagan
Federal Spending increase, 1981-1985: +39.5%.
Total government employment, 1981-1985: +607,0000

Bush
Federal Spending increase, 2001-2005: +32.7%
Total government employment, 2001-2005: +603,000

Obama
Federal Spending increase, 2009-2013: -1.89%
Total government employment, 2009-2013: -667,000

We've aggregated the problem of a decimated middle class with Govt austerity and layoffs that have acerbated the problem.

What would be the situation if we'd seen spending increases over the past four years, and the Republican dominated states had not added over 600,000 people to the unemployment rolls, but had added 600,000 more paid jobs?

What would the situation be like if the middle classes had another $2 trillion in income to spend in the economy?

If we want a return to stronger economic growth, we need a return to the policies that built up the middle classes, and to turn away from the policies that help bring it down. We don't need to pander to the richest any more. We need to stop austerity and create jobs for the middle class. We need to reverse "trickle down" policies, not extend them.

So yes, growing wealth inequality and austerity have resulted in a more sluggish recovery -- neither of which are Obama's fault.

 

Good point. We should be doing things more like when Reagan was president.

Reagan
Federal Spending increase, 1981-1985: +39.5%.
Total government employment, 1981-1985: +607,0000


Obama
Federal Spending increase, 2009-2013: -1.89%
Total government employment, 2009-2013: -667,000

Write your Republican Tea Party reps and tell them to stop the austerity, increase spending, and start hiring more government workers.

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Write Republican Tea Party reps, tell them to stop the austerity, start spending, stop eliminating government jobs, and start hiring more workers.

 

Stimulus spending, $450 billion over a couple years, amounted to about 1.5% of the economy. It helped, but wasn't big enough to really charge the economy.

But even with the Stimulus, since 2011 we've been under Republican austerity. You can reach your own conclusions why they'd want to slow down the economic recovery.

 

I love the deceptive percentages. Give us the actual number totals instead, I'm sure they tell a different story.



The difference is easy to see.

 

The haters? Oh, right. Barack Obama, Eric Holder, Al Sharpton, Chris Mathews, Bill Maher, Gov. Howard Dean, and the multitude of liberals he cheered when Reagan died and rage that Cheney hasn't been killed.

Got it, Iremon. The haters.

 

He has a lot he and other Dems could talk about.

o Economy that was tanking at a -9% rate and shedding 700,000+ jobs a month turned around
o 54 straight months of private sector employment growth.
o 115% increase in the stock markets since taking office
o Halved the deficit in 4 years.
o Got Osama bin Laden.
o Saved 2-3 million jobs with stimulus package
o First decrease in spending in a year in decades - 3 times.
o Stock markets up 160% since bottom of the recession in 2009
o Over 10 million additional private sector jobs created since Jan 2010
o Oil production increasing for the first time in decades.
o Ousted Muamar Kadaffi at 1/1000 the cost of the Iraq war
o Deficit reduced by a then record $212 billion, down 16%, in 2012.
o Deficit reduced by a new record $408 billion, down 37%, in 2013
o Record corporate profits
o Passed health care reform that will provide coverage to tens of millions of Americans
o 4 straight years of GDP growth
o Unemployment rate dropped from 10% to 5.9%
o U.S. becomes world's top petroleum and energy producer
o Passed financial regulation reform to prevent another housing bubble fiasco.
o Diplomatically coerced Syria to give up WMD without war or loss of single American life.
o Recovered all jobs lost in the worst recession in 80 years
o Lowest rate of spending increases of any president in modern history
o On-budget deficit has decreased every full fiscal year he's been in office.
o US domestic oil use decreasing
o Net creation of millions of people employed despite inheriting a economy losing 700,000+ jobs a month.

If Obama had been a white Republican, conservatives would be hailing him as savior.

 

It's "Iriemon" with an "i" in it. Thanks.

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Thanks for the chart! It makes it easy to see and reinforces my data perfectly. We can see in your chart spending growing dramatically under Republican presidents, while it has actually decreased during the last 5 years, unprecedented in modern history, austerity at the time the economy was trying to recover from the worst recession since the GD.

Why would the Republicans want the recovery to be weak?

 

Based on what they said they would have done if in power, we would be in the stone ages right now if Conservatives were in charge.

 

Two i's... and still can't see.

 

Unfortunately it appears that the president
is relying on the American people to understand what is going on
But unfortunately there are too many idiots among us

Look how many people do not understand how government works
And become easy prey to right wing propaganda

 

There is NO recovery.This Government now run by Obama-style czar just tinkered
with the way Unemployment was defined { unless one had unemployment benefits they
weren't counted as Unemployed }. Plus the calculation { instead of a full year in the
Total Labor Force or Participation rate } they used as little as 4 weeks.
That is why the Labor Participation Rate is at a near 40 year low.Because the real
Unemployed aren't counted.There is arguably OVER 100 million workers
out of work who are looking for full time work.That's the entire population of
Texas,California,New York,Florida,Illinois and Pennsylavania ... the 6 most populated
states here in the U.S. Combined.
What does that add up to.That 87 Million Americans are supporting in the labor
force the entire population or 317 million.Therefore the average American worker
has to carry 4 people on his back.Plus the commies in this Government are out
Stalinizing a 1.5% Inflation rate.If that were true we would be as stable as Switzerland
and Germany.Medical costs would also be steady as would food prices.

You are being LIED to as if in the old Soviet Union ... Folks.

 

Look at the total numbers! If Bush wrecked the economy by spending more tax dollars, why would it work any better now? That makes no sense at all. You will notice that Clinton's spending went up in a linear fashion to Reagan and Bush SR.