The Summary

Josh Zumbrun of the Wall Street Journal provides a fair summary of how economic indicators have fared during the Obama presidency. Here’s the Reader’s Digest version.

The stock market, home prices, GDP, the total number of jobs, and industrial production are up.

Real median household incomes and the labor force participation rate are down. Real average incomes are down, too, which means that even the continuingly increasing share of income by the wealthy doesn’t make up for the loss of income.

Food stamp use is up. Job growth has been phlegmatic by comparison with post-war presidents other than George W. Bush with whom it’s pretty comparable.

Whether you think it’s a good record or a bad one largely depends on your point-of-view. As usual where you sit is where you stand. President Obama clearly thinks it’s a good record.

My view is that it’s not good enough.

36 comments… add one

  • jan

    The stock market has been encouraged by the fed money pumping (QE) and low interest rates. Home prices have been propped up by low interest rates, various mortgage programs, and foreign buyers flooding the market with cash. The job participation rate is still not what it was before the last crash. When you take into account part time work and those too discouraged to be a part of the job market, the real UE number is much higher — in the double digits. US debt continues to go up — now almost $18 trillion. Unfunded debt is incredibly high. There’s more poverty, especially among youth and minorities. There is more dependence on social programs such as food stamps. Disability is going broke, because of the surge in people that have been applying for it.

    Consequently, IMO, while the economy’s surface seems smoother, the guts are still floundering and in decline.

  • steve

    Link goes to Calculated Risk numbers comparing Obama’s record with other presidents. His job numbers are actually much better than Bush II and Bush 1. You can decide the importance of where the numbers started for yourself. One of the biggest differences is the large number of govt workers added under other presidents while that has decreased under Obama.

    http://www.calculatedriskblog.com/2014/08/public-and-private-sector-payroll-jobs.html

    Steve

  • When you set out to take Vienna, take Vienna.

  • Jimbino

    And what about the loss of freedom characterized by Obamacare? Fortunately, Coloradans and Washingtonians have gained some freedom when it comes to recreational drugs, and gays have gained a lot of freedom.

  • Guarneri
  • Andy

    Let’s list the various factors that affect the stock market, home prices, GDP, jobs, etc. in order from the most to least influential. Where, in that priority list, would the Presidency fall and how much influence would it have?

    Or let’s look at a counter-factual. How much better/worse would the economy be if Bill Clinton were President rather than Barack Obama? Timing matters.

    Personally I don’t think the President has as much influence as is commonly believed and that these Presidential “comparisons” are mostly worthless short of making a political arguments.

  • Keep in mind the context of the post that this post used as its point of departure. It was in response to these statements of President Obama’s:

    “I think you’d have to say that we’ve managed the economy pretty well and business has done okay.” He said: “Since I have come into office, there’s almost no economic metric by which you couldn’t say that the U.S. economy is better and that corporate bottom lines are better. None.”

    In other words, I agree. President Obama should stop marking his scorecard and pay more attention to the circumstances in which ordinary people find themselves. I don’t really care how he compares with past presidents.

    The real question is how we’re doing and, frankly, more Americans don’t think we’re doing too well than think we are. Arguing that we’re all poor, deluded fools who are being mislead by Republican propaganda only goes so far.

  • michael reynolds

    Jimbino:

    Obamacare represents a great advance in freedom.

    1) The freedom to change jobs without losing health care.

    2) The freedom to leave a state and yet have health care.

    3) The freedom that comes of knowing you won’t be cut as soon as you start actually needing care.

    4) The freedom to keep your kids on your plan all through college and grad school.

    5) The freedom to know that your plan is real, not a hollow fraud, that it won’t top out after your first procedure.

    6) The freedom to get insurance even if you aren’t in the most profitable demographic.

    Exactly one “freedom” has been lost:

    1) The freedom to be a free rider, paying nothing in and then have your emergency bills paid by better and more responsible people than yourself.

  • michael reynolds

    Dave:

    When it comes to unemployment and jobs Mr. Obama has repeatedly said it’s not good enough. You’re taking one remark and ignoring dozens of others.

    As to the quote, business has done pretty well, obviously. And it’s true that by every metric things are better than when he took office.

    Now, you don’t like the jobs picture, I don’t like the jobs picture, Mr. Obama doesn’t like the jobs picture, we all agree, and we have all three said so many, many times.

  • michael reynolds

    Had we added massive jobs programs as Mr. Reagan did with his defense build-up, or raised government payrolls as every preceding president has done, we’d have better unemployment numbers. It’s not Mr. Obama’s initiatives that have cut government jobs, that’s the GOP. And that is the inflection point where government clearly does play a direct role. Everything else is only tangentially related to the POTUS.

    This constant wheeze of why has Mr. Obama gotten everyone a job is just silly. Why hasn’t big business gotten everyone a job? Why is big business off-shoring jobs? Why is big business prioritizing stock prices over job creation? Why do we make apps rather than hire people?

    These are choices, they are not dictated by the laws of nature. Big Business chooses to conduct business in such a way as to cut American jobs. Actual human beings make actual human choices to lay people off so as to buy themselves a bigger yacht.

    But that’s the president’s fault.

  • Had we added massive jobs programs as Mr. Reagan did with his defense build-up, or raised government payrolls as every preceding president has done, we’d have better unemployment numbers. It’s not Mr. Obama’s initiatives that have cut government jobs, that’s the GOP.

    Let me offer an alternative explanation, Michael. In 2009 the president and Congressional Democrats believed that the recession would be a V-shaped one and the economy would bounce back the way it had in the last several recessions. They decided to use the opportunity the recession provided to pass a large stimulus bill that was largely used to shore up political constituencies.

    They could have passed a larger bill; they could have passed a bill that spent more in the first year rather than dribbling it out over several years; they could have structured the expenditures differently. Those were choices made by Democrats. To whatever extent the phlegmatic recovery is a partisan issue the Democrats own it.

  • Zachriel

    Dave Schuler: They could have passed a larger bill;

    “Not a single House Republican voted for the bill… In the Senate, the vote, 60 to 38, was similarly partisan… Under a procedural deal between the parties, the bill needed 60 votes to pass.”
    http://www.nytimes.com/2009/02/14/us/politics/14web-stim.html

    The bill needed Republican votes to reach the 60-vote threshold in the Senate. Democrats could not pass the stimulus alone. Republicans were the deciding votes, and a larger bill was very unlikely. The situation was already highly partisan, and soon the Right would be calling for impeachment.

  • I don’t know where the idea that when you can’t get your caucus to vote for something it’s the other party’s fault came from.

  • TastyBits

    @Zachriel

    The Democrats had the votes. In the real world, you do not lolligag. You get your ass moving while you have the opportunity.

    Whining that the competition would not wait for your product to be ready is not how you get to the top. If you want to run with the big dogs, stop whining. Otherwise, get back on the porch with the pups.

  • michael reynolds

    Dave:

    That’s unrealistic nonsense. There is a filibuster, and there is the fact that no party can be relied upon to give 100% support for anything (other than more aid to Israel or Republican opposition to anything and everything that flows from the Black man in the White House.)

    When the country is in crisis, and one party simply refuses absolutely to offer any support, the government is paralyzed. And you continuing to pretend otherwise is ridiculous. The idea that Obama could have passed some much bigger stimulus is without foundation in reality. It is a fantasy.

    But let’s pretend, anyway. Let’s say you’re right and they misjudged, and they should have had a bigger stimulus. What were the chances of correcting that error with a second stimulus? Would you prefer to describe the odds as zero or as non-existent? Either will be accurate.

    So, even if you’re correct and somehow it is Obama’s fault that he wasn’t able to pass a bigger stimulus (and you’re not) you’d still be wrong because into any crisis management must come the possibility for a course correction, which even you, I think, would have to admit wasn’t on the table given GOP rejectionism.

  • Guarneri

    In the trailing twelve months approximately half of GDP has been inventory build.

    Consumer spending appears somewhat decent, but really financed through debt incursion, and in a major category, through auto leasing, also a form of (subprime) debt incursion. And the of course the Target buyer has become the Wal-Mart buyer; the Wal-Mart buyer has become the Dollar General buyer. Make of that what you will.

    The corporate birth/death ratio has a historical bias that puts a false job creation figure out. And of course we have part time jobs. No wonder incomes are stagnant. The Democrats solution? Increase the minimum wage. Right.

    Corporations are “doing well” because they are being milked for cash and earnings. They are not employing and reinvestment rates are nowhere. Add in Fed pumping and there you have the stock market.

    I could go on but you get the point. These should not be controversial observations. They are simply scratching just below the surface of the gross statistics to see what makes those statistics tick. Is it any wonder that there is a “total disconnect” between what the Average Joe is experiencing and what Obama and his devotees tout?

    The Democrats and their biased media followers have done a good job in laying things at the feet of a “do nothing” (read: Republicans) Congress. Almost never reported are the 300+ bills waiting to be taken up by the Senate but blocked by Harry Reid. Good political gamesmanship, but bad governance and bad for the Average Joe.

  • That’s unrealistic nonsense.

    You don’t understand the power of the Congressional leadership.

  • Zachriel

    michael reynolds: any crisis management must come the possibility for a course correction

    Any rational process allows for course corrections. Even simple technical clarifications to the Affordable Care Act are impossible in today’s political climate.

  • Andy

    Well, Democrats never asked for or tried for a larger stimulus. The President-elect (at the time) asked for about $800 billion and that’s about what the Democratic committees wrote into their bills and that’s ultimately about what the Democrats passed in each house. And, the one GoP stimulus proposal I remember was a bit less in terms of total dollars but in that same ballpark. IMO, just like with the arbitrary $900 billion cost of the PPACA, I think politicians (not just Democrats) are afraid of the “T” word (trillion) and purposely choose to limit the costs bills to the “billions.” I think there’s probably something to the T word being a psychological and political hurdle that would make public support more difficult, so I think passage of any bill greater than $1 trillion would have been problematic unless it was broken up into multiple bills over time. However, there’s no evidence a trillion-plus bill, or a series of bills, was ever seriously considered outside of a few people like Krugman.

    As for Republican support Democrats didn’t need it and so they weren’t willing to make the compromises necessary to get it. That’s a simple fact that comes with the advantage of being in the majority (And was an advantage the GoP used to get the Bush Tax Cuts passed with practically no Democratic support). I point that out not to blame Democrats or Republicans but to describe the reality of how far apart the parties are in terms of policy. In the case of the stimulus, the GoP wanted a stimulus composed primarily of tax cuts followed by infrastructure spending. That’s not something the Democrats were remotely interested in considering they had just run on how bad the Bush Tax cuts were. It was politically impossible for them to accept. So, neither side was willing/able to accept an “in the middle” compromise probably because there wasn’t one – especially considering the leadership on both sides were ideologically even further apart than the party mainstream.

  • TastyBits

    I realize that I am going to be “the turd in the punchbowl”, but I must retrieve history from the memory hole.

    The stimulus number was determined by the economists, Christina Romer and Larry Summers got out their handy-dandy Keynesian calculator and determined the amount of money needed to get the economy moving.

    The stimulus was a failure. Christina Romer is the only one with any integrity. She admitted the numbers should have worked, but she did not know why they did not.

    As to Paul Krugman, he is an idiot. He throws shit at the wall to see what will stick. I am sure he gets something right, and when space aliens invade, he will have urged preparations for the invasion.

    If you did not know how bad things were going to get, you were not qualified to be making economic decisions.

    If you could not get your bill passed while you have a filibuster proof majority, you are not qualified to be making political decisions.

    If you are making excuses about your failures, you need to get back on the porch with the pups.

  • Zachriel

    TastyBits: If you could not get your bill passed while you have a filibuster proof majority, you are not qualified to be making political decisions.

    Democrats only had 58 Senate votes in February 2009. Spector didn’t switch until April. Franken wasn’t seated until July. Even then, Democrats rarely had a working supermajority. Kennedy died in August, while Byrd was often unavailable for votes due to failing health.

    TastyBits: The stimulus was a failure.

    The stimulus was certainly insufficient. A substantial portion of the stimulus was misdirected tax cuts. Also, the depth of the problem was still not clear in early 2009. In any case, a process that is not capable of course correction is inherently flawed.

    The U.S. really needs to get its act together. Political dysfunction could mean that an unaddressed technical problem with the PPACA could lead to the collapse of the health insurance markets.

  • TastyBits

    @Zachriel

    Democrats had 58 +2:
    July 7 – Aug. 24, 2009 and
    Sept. 25, 2009 – Feb. 3, 2010

    I cannot help it if they are too incompetent to execute within their window of opportunity. In the real world, nobody has time for whiners. If Apple would stop improving the iPhone, someday Microsoft would produce a Windows Phone as good.

    The stimulus was certainly insufficient. …

    Or, the stimulus was a failure. People do not make excuses for success.

    I could have told you the depth of the problem in late 2007, and I can tell you how to determine the depth of the problem today. Determine the market value of the assets being leveraged into credit. Bada, bing, bada, boom.

    As to the PPACA, I have little knowledge of this area, and therefore, I limit my comments to a few areas. I do know that the insurance companies helped write the bill, and they are not incompetent. They are getting paid one way or the other.

  • Zachriel

    TastyBits: I cannot help it if they are too incompetent to execute within their window of opportunity.

    The stimulus was passed in Feb 2009.

    TastyBits: Or, the stimulus was a failure.

    Saying it was insufficient is a different claim than saying it was no help at all. It certainly helped the economy.

    TastyBits: I could have told you the depth of the problem in late 2007

    We’d be happy to review your quantitative analysis from 2007.

  • TastyBits

    @Zachriel

    Not using your window of opportunity is not my problem. Plan better.

    Rephrasing something does not change the substance. It was a failure. It did not help. Today is proof.

    By late 2007, the MBS’s, CDS’s, and CDO’s were all over highly over leveraged, and they were being leveraged off one another. It was a house of cards waiting to collapse.

    When the collapse came, it was going to take down the financial sector because nobody had anywhere near the actual funds to backup their obligations. There would be a cascading failure.

    The same problem exists today. I do not follow it anymore, and therefore, I do not know how far it has been unwound or if it has been unwound.

    If you understand how the financial system works, it was not difficult to understand what was going to happen.

  • Not using your window of opportunity is not my problem. Plan better.

    I honestly don’t think a failure to plan is the key problem. I think that bad priorities are the problem.

    The top priorities of the Congressional leadership are maintaining their own power and retaining or expanding their majority (which leads to maintaining their own power). Every other consideration takes a back seat.

    What I believe about both the ARRA and the PPACA is that they are exactly what the Congressional leadership wanted. To believe otherwise is to misunderstand the power of the leadership.

  • TastyBits

    @Dave Schuler

    I agree, but if one disagrees with you, the other option is incompetence. I am tired of whining.

  • Zachriel

    TastyBits: It was a house of cards waiting to collapse.

    Sure, but you haven’t quantified the resulting economic hole, which you need to know in order to the size of the stimulus. As much of the bubble was in the shadow markets, there was no easy way to determine the depth of the problem. Indeed, even in conventional banking, the system is hardly transparent.

    TastyBits: It did not help. Today is proof.

    Of course it helped. The markets were in free fall. The bailouts and stimulus helped stabilize the economy.
    http://edge2.politicususa.netdna-cdn.com/wp-content/uploads/2014/02/gdpgrowth.jpg

  • TastyBits

    @Zachriel

    The last time I was in a discussion with one of you I gave you a number. If you all are going to collaborate, you need to share notes. I would also suggest you designate each person a subject and do extensive research in that area.

    This is just my somewhat informed guestimate. (I gave the basis for my numbers the last time. Look it up.) In 2008, there was probably about $60 trillion leveraged off of housing assets, and at least, $30 trillion was at risk. The remaining $30 trillion was somewhere between no risk and at risk.

    Until those assets are paid off, written off, or re-inflated, the economy will be stuck. I do not follow it anymore, and I do not know how big the hole is. I do know it is a whole lot bigger than anybody calling for more government spending can imagine.

    The only people who were helped by the bailouts and stimulus are the ones who get first access to the money. The rich get to skim off the top, and therefore, they are doing well. I suspect one of you is working hard on the income inequality bullshit.

    I find it interesting that all the studies and charts proving how much the stimulus helped the economy are from people that were helped by the stimulus.

  • Zachriel

    TastyBits: In 2008, there was probably about $60 trillion leveraged off of housing assets, and at least, $30 trillion was at risk.

    Yes, today we have a much better idea than we did then. You had claimed quantitative foreknowledge.

    TastyBits: The only people who were helped by the bailouts and stimulus are the ones who get first access to the money.

    Many people were hurt by the financial meltdown and economic recession, mostly ordinary people who played by the rules. However, the bailouts and stimulus prevented a much broader collapse, which would have hurt even more people even more deeply.

    TastyBits: I find it interesting that all the studies and charts proving how much the stimulus helped the economy are from people that were helped by the stimulus.

    Economic analysis shows that the stimulus had a significant impact on GDP growth.

  • Zachriel

    TastyBits: The rich get to skim off the top, and therefore, they are doing well.

    Yes, many people who didn’t deserve to get rich got rich, both during the run-up and after the meltdown. However, these people had their hands on the financial levers that controlled the world economy, and they would have taken it down otherwise. The structure of the tax cuts in the stimulus bill were particularly egregious, but there was no way to pass the stimulus otherwise.

  • TastyBits

    @Zachriel

    Sorry. You did not know what the impact was going to be in 2007. My guess is that none of you had any idea that there was a housing bubble or how it was connected to the financial industry.

    I did before the collapse, and I detailed the basis for the numbers in a previous thread. It was not that difficult. All you needed to do was to look in the right places. Actually, that is how you stay ahead of things. The conventional wisdom is usually wrong.

    Short version: 2007 – 2008 ATM resets were going to be bad. This was based upon the data. This would be combined with the coming recession, and it would be much worse. Determine the MBS number, estimate the leverage amount, multiply, adjust. Compare that with the actual assets backing the leveraged amount.

    I could explain this to any street hustler in about ten minutes. They could tell you the extent of the problem and how to fix it, but the people with years of schooling cannot grasp a simple concept.

    Many people were hurt by the financial meltdown and economic recession, mostly ordinary people who played by the rules.

    And all good dogs go to heaven. Trite nonsense

    However, the bailouts and stimulus prevented a much broader collapse, which would have hurt even more people even more deeply.

    The stimulus did not fill a $30 trillion hole. It did nothing, and it more than likely made things worse by digging a deeper hole. Japan tried the same crap. As to hurting people, the poor and middle class are paying to keep the rich from getting hurt.

    Economic analysis shows that the stimulus had a significant impact on GDP growth.

    I do not have time for pink ponies and fairy dust. I operate in the real world. The same people who are telling you are the stimulus was great and wonderful are the same ones who could not find a housing bubble in 2007.

    See, this is how you stay ahead. Open your eyes.

    … tax cuts …

    You sound like a broken record. (I realize I am showing my age.) My comment was actually about fiat money and fractional reserve lending, but I do not feel like a long drawn out debate. You win. The world is a horrible place because of Republicans and tax cuts.

    Pssst. Fractional reserve banking does not work like your economics professor taught you, and there is a good chance he does not have a clue about how it actually works.

  • Zachriel

    TastyBits: The same people who are telling you are the stimulus was great and wonderful …

    Don’t know any of those people.

    TastyBits: I did before the collapse

    Your postdiction is quite good.

  • TastyBits

    @Zachriel

    Apparently, you know how to find the great and wonderful economic reports when you want. Do you think you and your side are the only people smart enough to be able to produce favorable economic reports?

    I was there, and I heard the crap being sold. They had great and wonderful economic reports about how there was no housing bubble and there was no way the financial industry could collapse.

    Anybody who actually knew how the financial system worked could have figured it out.

    The problem was that the people who were doing studies and creating graphs did not know how the system actually worked.

    The other problem was that most of the people who did understand how the system worked were making too much money to believe the mathematical models could be wrong. (sound familiar?)

    I could go back over the decades with the same story.

    I am getting old, and you will be living in this world far longer than I will. You may think you are know everything today, but you may learn different tomorrow.

  • Zachriel

    TastyBits: I was there, and I heard the crap being sold.

    Sure. It was quite obvious housing was experiencing a bubble, which was a reflection of the bubble in the shadow market in mortgage-backed securities. However, the claim concerned the size of the stimulus, which required a quantitative understanding of the problem, or at least the ability to make course corrections as the problem unfolded. In early 2009, much of the problem was still hidden. Banks were sitting on questionable securities, and they weren’t divulging the extent of their exposure.

  • TastyBits

    @Zachriel

    The conventional wisdom was that there was no housing bubble, and there was no problem. The only people who were making such claims were cranks and Bush haters.

    The financial industry was not at risk because the MBS’s were engineered to withstand mortgage foreclosures. Mathematical formula were developed from data sets, and computer models were created. These proved that there was no problem. (It was more technical.)

    Those who claimed otherwise were the cranks and Bush haters. We were also the people who were claiming that a recession was on the way, and guess what we were called?

    Again, the size of the problem was known in 2007, 2008, 2009, … today. Mortgages were being leveraged between 10 and 30 to 1. There was about $12 trillion in mortgages. The worst case would be $360 trillion, but not everything is at risk or leveraged at 30 to 1. I came out with about $30 trillion at risk of immediate collapse.

    You make educated guesstimates, and come up with the scope of the problem. If you have access to more accurate numbers, you will be more accurate.

    Unless you have an extra $30 trillion in real money laying around, you cannot fill the hole. Creating $30 trillion will only double the problem. Any number picked for a stimulus package was never going to work.

    There are two types of people claiming that nobody knew or could have known the financial collapse was about to happen. The people making money are one, and the smartest people in the whole wide world are the other. If it could have been known, people like me were right, but if people like me were right, the smartest people in the whole wide world were wrong. If people like me were right, the hustlers could have been stopped.

    The hustlers use the eggheads to negate people like me, and people like you buy it. Meanwhile, things continue to turnout the way people like I predict. You want to be one of the smartest people in the whole wide world, and therefore, you pretend I am wrong.

    One day you may wise up and realize that the hustlers are using people like you. The hustlers will never accept people like you, and people like you will never outsmart the hustlers.

  • Zachriel

    TastyBits: There was about $12 trillion in mortgages. The worst case would be $360 trillion

    Somewhere between $12 trillion and $360 trillion.

Leave a Comment