Are Obama’s policies failing, or are Republicans strangling the recovery?
Update: This post has been updated since the initial September 2nd posting to include a link to the statement by S&P and a more precise mark for the Dow on January 20th, 2009.
Even the most staunch Obama critics won’t deny, he was handed a crap sandwich in 2009. And no one thinks we have come back nearly far enough. But the narrative that Obama is making things worse simply does not align with the facts.
Now, I understand that producing charts and indexes isn’t going to pull the crowd in around you at the water cooler, so here is an easy tool for remembering where we were, economically, when the President was inaugurated. The number 7. GDP was in a free fall at an annual rate of negative 7%. We were hemorrhaging jobs at a rate of minus 770,000 a month. The Dow had crashed to 7949 (okay, a 949 snuck in there, but you get the picture). And unemployment was at 7.7%. To compare those numbers to where we are now, just peruse the business section of any local newspaper. Most of those indicators are referenced on a daily or weekly basis.
So, for instance, today’s big number, zero. Zero jobs added in August. A big fat goose egg. Sounds terrible, and it’s not great, but remember the 7’s. Zero jobs added is far better than 700,000 jobs lost. Next, look at the stock market. Remember 7949? Even after a rocky August following the debt ceiling hostage taking by House Republicans, it still closed over 11,000. That’s a nearly 50% increase in 30 months. Oh President, please stop with your horrible policies. You’re killing my 401k (???). Let’s look at GDP. It’s limping along at 1%. But it was dropping at negative 7% when Obama took office. Turning a train that big around that fast is no small task.
And last, the big number. A number so big, it gets its own paragraph. A number so big, it will make or break the President in the next election. Unemployment. It stood at 7.7% in January 2009. It now stands at 9.1%. Unemployment is a lag indicator. In fact, the unemployment rate peaked at over 10% in early 2009. And it was starting to come down, ever so slowly, but at least it was headed in the right direction.
Enter the tea party in January 2011. When the new Republican majority took office, they said the focus would be jobs. Instead, they read the constitution into the record, passed a budget that would end medicare but not deficits and brought us to the brink of default, causing a first-ever downgrading of the U.S. bond rating. The following are two excerpts from the S&P downgrade statement:
The political brinksmanship of recent months highlights what we see as America’s governance and policymaking becoming less stable, less effective, and less predictable than what we previously believed. The statutory debt ceiling and the threat of default have become political bargaining chips in the debate over fiscal policy.
Compared with previous projections, our revised base case scenario now assumes that the 2001 and 2003 tax cuts, due to expire by the end of 2012, remain in place. We have changed our assumption on this because the majority of Republicans in Congress continue to resist any measure that would raise revenues,
But enough about the freshmens’ glorious job-creating, freedom imploring, liberty impregnating policies. Let’s look at those pesky little numbers since THEY took office. In January 2011, when the Tea Party was sworn in, we were gaining jobs at a rate of 200,000 a month. Today, as we said, zero. GDP was growing at 2.5%, now it’s at 1%. The Dow was at 11,700, now it has dropped to 11,400. Unemployment has gone from 9.0% to 9.1%. And they’re criticizing the President’s record?
It is obvious, they both have a great deal of work to do. But you don’t. It’s easy. Just remember the sevens and you can master any Obama basher. Of course, when they say, “No way, that’s not what Sarah and Michele say”, just refer them to those pesky numbers .