Obama’s Description of His Legacy is Excessively Charitable to Himself
US President Barack Hussein Obama recently celebrated the 7th anni of the passage of the American Reinvestment and Recovery Act, or as most Americans likely remember it, the $830-M stimulus package.
The benefits of the stimulus are up for debate, but Mr. Obama is absolutely certain of its virtues.
“Anybody who says we are not absolutely better off today than we were just seven years ago — they’re not leveling with you,” he told an assembly in Florida. “By almost every economic measure, we are significantly better off.”
The President has been making these claims for some time now.
You will remember just a year after the stimulus was passed he was touting the “Recovery Summer.” But with his Presidency concluding, now is a fair time to criticize his boasting aka Suck’in and Jiving.
The record as judged by accepetable economic measures
Gross Domestic Product (GDP) growth.
The GDP, the cumulative value of goods and services over a stretch of time, is the primary way analysts gauge the economy. When Mr. Obama was Inaugurated in Y 2009 the GDP was -2.9%. Thus far for Y 2016, it’s +0.95%. But compare that to the average GDP growth between 1790-2000 of +3.78. So though Mr. Obama is correct that in this sense that GDP is “better” than it was when he took office, nearly 8 years of GDP growth under 3% isn’t much to brag about. C is the Grade
The unemployment rate is the number of unemployed Americans divided by the number of those in the work force. This figure was 7.8% in January 2009 and was 4.9% percent in August of this year. Statistically, it’s hard to argue that this is notan improvement, especially given that unemployment was over 10% in October 2009. But caveats apply here. The decrease in unemployment is distorted by a low labor force participation rate that is hovering around 60%. And, it is important to note, most of the employment growth is driven by part time and low wage service jobs, while high paying manufacturing positions are continuing to disappear. C is the Grade.
The inflation rate measures the level at which the prices of goods and services incline while the value of the USD’s declines. This number was 0.0% in January 2009. As of August 2016, it was 1.1%. A demonstrable improvement, given that inflation was -2.1% in August 2009. But the Fed’s targets 2% as the number most conducive to employment growth and price stability. Here Mr. Obama’s economic policies come up a bit short. D+ is the Grade
The growth of the average hourly wage of the American worker was 3.58% in January 2009. In August it was 2.43%, a number that is clearly not improvement, though it is better than the 1.51% from earlier in the Obama’s presidency. D- is the Grade.
Workforce participation rate.
The percentage of the population currently employed. This number was 66% in January 2009. It was 62.8% in August 2016, that is the lowest number in 38 years. This statistic that shows no sign of improvement. A record 94,610,000 working age Americans have vanished from the workforce. OK, some of this is due to demographics and early retirements, but many, many individuals have simply abandoned hopes of finding work. F is the Grade.
The GINI coefficient, or ratio, measures the distribution of income throughout a nation. According to this metric, income inequality between the nation’s richest and poorest citizen has grown considerably worse and even accelerated under Mr. Obama, in spite of redistributionist policies intended to ameliorate the inequality. F is the Grade
The percentage of Americans owning homes was 67.8% in January 2009. It was 63.5% in August 2016. That number has not fallen to such a level since Y 1967. There are fewer American homeowners now than during the Presidency of Jimmy Carter. And the number is likely to continue to fall. F is the Grade.
The US Government’s total spending was -10% of GDP in Jan 2009. It was -2.3% in August 2016. The aggregate number is roughly the same as under Mr. Obama’s predecessor, Bush 41. C+ is the Grade.
The amount of money owed by the US Government was 65% of the nation’s GDP in Jan 2009. It was 104% in August 2016. Mr. Obama has almost 2X’s the federal debt from $10-T in Jan 2009 to $19.5-T in August 2016. F is the Grade.
Mr. Obama argues that it is impossible to argue that the nation is not better off than when he assumed the Presidency.
Yes, some economic indicators have shown improvement, though in many cases it’s marginal and certainly not significantly by almost all measures.
Contrary to the Mr. Obama’s claims, a number of Key economic numbers are worse than when he took office, and those that are not could be better.
The hard data suggest that Mr. Obama’s opinion of his economic legacy is “excessively charitable” compared to the results.
Have a terrific weekend.