Economy Worse Under Obama?

It’s been said before, many times in fact, but Senator Chuck Grassley’s recent reassertion that, “It [the economy] has gotten worse under Obama” continues to be a head scratcher for those with memories that span beyond the latest cable news cycle. The repetitious Republican talking point has indeed become fact for many who loyally follow the conservative platform yet for many others the drumbeat message eventually makes them ask themselves, “Has the economy really gotten worse under President Obama.”

The short answer is, “Yes,” but the the more insightful, pragmatic answer is, “No.” It’s confusing, I know, but bear with me while I hash out an explanation.

When President Obama was inaugurated on January 15, 2009 unemployment was at 7.8% . Later, reported at 8.3% for the month. The national debt was at $10.6 trillion. Budget deficits were at $485.2 billion, up from $161 billion the previous year. The American public, along with virtually every other nation in the western world, were in a panic. By mid-year unemployment hit 10% and debt was building up at a rapid pace. Fast forward to the present, national debt has hit $15.9 trillion. There is a budget deficit of $974 billion and unemployment is stubbornly high. Has the economy become worse since inauguration day 2009? Technically, yes it did.

It’s very difficult to look at those figures and not feel distraught. The masses who voted for the President have long since wondered where all that “Hope and Change” ended up. Don’t give up quite yet, though. Remember, the second answer to the question? But how could the economy have improved given all those negatives. Well let’s look a bit closer at the real situation.

Yes, after January 2009, the economy did in fact worsen. If we only looked at that the Republican Party’s criticism is wholly true. However, the first term of the Obama presidency did not exist in an isolated stretch lasting a single year. Taking a page from Ronald Reagan’s 1984 Republican National Convention speech,

Our opponents began this campaign hoping that America has a poor memory. Well, let’s take them on a little stroll down memory lane.

Unemployment bottomed out at 10% in the summer of 2009 but it has trended downward ever since reaching 8.2% in 2012, less than Obama’s first year in office. Yes, it did increase slightly, back to 8.3%. The private sector has grown, adding jobs every month for more than two years. Much of that growth has been blunted by losses in the public sector as a result of government cuts. It’s quite possible the unemployment picture would be better if stimulative efforts had continued as they did in past downturns.

Roughly 8.4 million jobs were lost during the recession, most between September 2008 and April 2009. (This despite the supposed 23 million unemployed individuals Mitt Romney has attempted to place on his opponent’s shoulders.) By inauguration day 2009, the economy was hemorrhaging 600,000 plus jobs each month. By the end of it all, the numbers were essentially split down the middle for Bush and Obama. Both presidents had to accept that during the worst part of the recession ~4.2 million jobs were lost under each of their administrations. Since then, we’ve seen 4 million jobs added to the economy over the last 3 years. Given the depths of the recession, gaining back almost half of those lost in a relatively short amount of time hardly speaks to the failed policy the Republican Party seeks to illustrate. Those claims become more erroneous when one considers those 4 million created jobs represent virtually all those lost under President Obama.

Debt has risen under this presidency but while many would like to leave that statement closed right there, “We have the highest debt ever under Obama”, the factors behind that high debt are more consequential than just having that “big government spender” in the White House. First, the current debt we have now is an accumulation of numerous administrations reaching back to Ronald Reagan. Each president’s administration contributed to the current national debt we have, from Reagan to George H.W. Bush to Clinton to George W. Bush to Barrack Obama. Of the total current debt, which sits at $15.9 trillion, almost half (42.7%) was accrued under George W Bush. Debt under President Obama comes in a distant 2nd place at 16.8%. Reagan is third (13.2%) with Clinton, the first President Bush and all administrations prior to Reagan accounting for the remaining 27.3%.

The primary contributors to the debt under the Obama administration include the three largest contributors to Bush’s debt load, the Bush tax cuts, the Afghanistan and Iraq Wars and the Medicare prescription drug plan,  most of which remained as bills-to-be-paid through the last 4 years. However savings have been achieved through ending of the Iraq War and Medicare provisions included in the Affordable Care Act. Also, as noted previously, 8.4 million jobs were lost during the Great Recession. That in of itself represented a significant reduction in government revenue for state and local governments up through to the federal levels. And last but not least, the Stimulus Bill’s contribution was significant, yet many economists deem the benefits will outweigh the costs in the coming years, as it was credited with placing the US on the path to recovery.

National Republicans point to Gross Domestic Product (GDP) as an indicator of the president’s failings. They point to the last two fiscal quarters of 2012 as proof. However, when we look back at GDP’s overall performance during Obama’s first term, the current status of GDP is hardly a critique of this president’s broader fiscal policy. From its depths in the first quarter of 2009, a -8.9% growth rate, GDP has increased under Obama breaking out of the negative zone by late 2009 never to drop out of positive growth rates again. It has experienced ups and downs over that time. A prime example is how it dropped to 0.4% in March of 2011 yet by the end of that year and on into Q1 2012 it rose back to 3%, even amidst double-dip recession predictions which ran rampant across the media landscape 2 months before.

With the 2012 Republican Convention behind us the GOP campaign begins anew. Perhaps feeling the etch-a-sketch has finally been thoroughly shaken out, their candidates and their surrogates are spreading out in force to counter the upcoming Democratic Convention. They will continue to press into voters’ collective consciousnesses that the economy is worse now more than ever. They will latch onto the fine line Democrats are walking when asked, “Is the country better off now”. Paul Ryan has grown fond of saying, this is the worst recovery since the Great Depression. A proper, contextual response  may be, “Well, yes, yes it is. But isn’t that because we are, in fact, recovering from the worst recession since the Great Depression.” As yet, it does not appear anyone has confronted Mr. Ryan pointing this out to him.

This may go a long way to explaining why this particular recovery is not progressing as quickly as many would like. The country, and the world, took a tremendous hit with many countries still clamoring to pull themselves out onto stable ground. However, it is worth noting, with Europe taking the austerity route – the same one Republicans promote – the US is just about the only western world nation that is not in a double-dip recession or on the verge of falling into one.

In of itself, is that not proof that the policies of this administration are far from a failure? Amidst all the economic turmoil of the Great Recession, the continued economic battles we’ve seen our world partners struggle to overcome along with the ongoing gridlock of a dysfunctional Congress it is truly astonishing this country was able to recover at all, let alone come out ahead of where we were just 3 short years ago.

Has the economy truly gotten worse under President Obama? After taking that trip down memory lane, the only accurate answer is, “No. No, it hasn’t.

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9 Comments to “Economy Worse Under Obama?”

  1. Nothing like facts to refute sound bites. Unfortunately, too many voters attention span ends at the end of a sound bite. Thanks for a great post.

  2. Well done, but the Republicans are apparently allergic to facts. Their convention’s theme “We Can Change That” seems like the rule they apply to all facts coming near them.

    Keep up the good work.

    • Thanks Stephen… you’re, unfortunately, all too correct, the GOP and the Right have become allergic to the facts. Sometimes you wonder why you write all this stuff, why you do all the research. Those who are truly in need of reading what we write won’t bother.

  3. Reblogged this on sarahjanelives and commented:
    Loved it. Nice to hear a clear, cogent rebuttal to the hurricane of well-financed propaganda being copy/pasted all over the social media landscape.

  4. Reblogged this on Ye Olde Soapbox.

  5. Thanks for taking the time to write an honest, organized presentation of the facts and well-supported with the numbers. I’d add that folks that I talk to sometimes don’t undersand or forget how much the housing bubble artificially inflated and then dropped the entire economy. I recall going into a SoCal car dealership in 2004 and being told that 95% of the customers were buying cars with “cash” (i.e., home equity extraction). I recall friends and colleagues snatching up homes in Nevada, Arizona, and Florida with interest-only loans and no money down. I saw the same friends loading up on gadgets, boats, lavish furniture, etc with no advancement in real income. I saw my own properties going up $30K a month based on nothing. So I laugh when I hear the term recession to describe the final, inevitable result of Bush’s ridiculous economic folly. This was something totally different that has never happened to this extent before. The economy imploded way back in line with true fundamentals, which Bush neglected his entire presidency. I predicted the devastation would be worse than it turned out as far back as 2004. I changed my mind when I saw the details of Obama’s stimulus. So I began dumping cash into index tracking stocks in early 2009. I’ve read and seen for myself how the stimulus and auto bail out stopped the downward sprial in its tracks. Restaurants and malls being built to support brand new workers in new industries. I sold all my shares in the index tracking stocks at the end of 2009. Yes, I missed the extended ride, but I reached my price goal. But I am truly amazed, with absolutely no help from the Republican side, how Obama was able to halt a downfall I predicted 5 years earlier would be much deeper and longer.

  6. Thanks for sharing. I hope people think through these facts, and come to a reasoned conclusion. Things are BETTER under Obama.

    However, on another matter, I am concerned that so many people are so fickle that one debate can wildly swing polls so much??? Hmmm… odd!! I hope folks remember the Republican attacks on the polls when it showed Romney was losing. I only refer to it because historically, we have seen that Republicans ALWAYS accuse Democrats of engaging in improper conduct, when it is the Republicans THEMSELVES that are engaging in such acts. A case in point is the voter fraud claims from the Right. Turns out, it was the Republicans that had a well oiled machine of a KNOWN FRAUDSTER committing EXTENSIVE VOTER REGISTRATION fraud. And the extent to which these frauds were committed in Florida and elsewhere, remains unclear to date. I think it was extensive.

    Likewise, the complaints about the polls have suddenly deliquesced into Romney’s overnight extremely unusual bounce in the polls. Yes, 70 million folks watched the debate however, 240 million Americans did not. Yet the polls are swinging in Romney’s favor, despite the fact that Romney’s debate method of Lying and co-opting the positions of his LIBERAL or MODERATE opponents is well documented on U-Tube and elsewhere. His dubious debate antics are well etched in the minds of those who watched him subject O’Brien in MA, during the gubernatorial elections, to the same treatment he gave to President Obama. Emm….Romney SUDDENLY became a “Democrat” in the O’Brien debates, and during that DEBATE, he adopted very MODERATE and LIBERAL positions. She was astonished and did not mount a strong rebuttal, neither did she tie Romney to his well documented more conservative positions, as Kennedy did.

    O’Brien’s responses to Romney’s changed positions were not vigorous at all, in all three debates. She lost because it appeared that Romney was the SAME as she was, only a stronger more energized LIBERAL version. Of course it was vintage Romney, all fake. He was power hungry and desperate. Yes, Romney won, and took us in MA, to hell and back.

    I hope no one is expecting Romney, in the next debate with Obama, to be any different from what he was in the first debate. In MA, we watched him attack, lie, discombobulate and stun his opponents with his changing positions and aggression in the Town hall and other debate formats. Romney becomes someone else in debates, steals the best and most preferred well polled positions, shocks and attacks his opponents, and lies against them with impunity. In the next debate, as usual, he will probably “reincarnate” as a Democrat. I hope Obama is ready for him, and mounts an immediate attack while refuting Romney’s BOGUS CENTRIST claims”, just as Kennedy did!!

    • Excellent points! Thanks for sharing your first hand experiences.

      “I am concerned that so many people are so fickle that one debate can wildly swing polls so much???”

      That’s the whole problem, the public is too fickle, with short-term memories.

      Having said that though, I was sorely disappointed with Obama’s performance during that first debate. If in any of the 3 he had to shine, it was that one to defend his record. But hopefully, and we all have to keep our fingers crossed, that he learned his lesson and like you say learn from Kennedy. I think if Obama does call him out on his flipping and hammers him with zingers Obama will come out ahead ’cause Romney just cannot handle being called out on his games. You could see that when Obama did deliver a couple of good ones on him there towards the end. It’s also apparent in the video in this post

      If Obama can hit him right from the start and continue with body blows Romney will not be able to stay on his feet. Obama just needs to take the first debate seriously and play like it’s the major leagues in the next two.

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