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January 23, 2017

The Obama Economy: Three Shocking Numbers From Obama's Economic Legacy

IPI expert referenced: Tom Giovanetti | In The News | Media Hit
  Lombardi Letter

What the Media Won’t Tell You About the Obama Economy

The elitist liberal media loves to fawn over the accomplishments that the Obama economy made during president Barack Obama’s two terms in office, but was it really true?

In one of many examples of such exaltation, Chris Matthews recently penned an article boldly stating: “[Trump] looks to be rolling onto the presidency on the smoothest economic path of any president in a long time.” (Source: “Donald Trump Is Inheriting the Best Economy in a Generation,” Fortune, December 5, 2016.)

That’s quite the claim.

While it’s true that Obama can take credit for presiding over an economic rebound (as measured by traditional economic indicators), as always, context reveals the wider truth. At the time of Obama’s inauguration, the average gross domestic product (GDP) growth rate in the preceding four quarters was -2.7%, owing to the raging U.S. housing market crisis. (Source: Ibid.)

Despite Obama’s inopportune timing, I would argue that favorable year-over-year comparisons of most economic measures were inevitable, no matter what Obama did or who was in office during this period. That is, unless you believe that the U.S. economy would have stayed mired in perpetual recession with a different president.

Skeptical as I’ve become over Obama’s incessant victory laps touting his economic record, I aim to counter some of the false narratives that the mainstream media keeps beating us over the head with. After all, Obama’s legacy is at stake; if he can’t inculcate his claim as America’s savior in a time of deep economic turmoil, he has little else to hang his hat on. His crown jewel, Obamacare, and most of his executive orders, are about to be discarded into the dustbin of history.

So, with Obama hours away from leaving the Oval Office, let’s set the record straight on three specific economic facts.

Discrepancy #1: Strong Job Growth

This is a perfect example of how statistics can be manipulated to conform to a pre-determined narrative. While official unemployment figures indicate fantastic job growth during Obama’s presidency—dropping from 10% in 2009 to a low of 4.6% in 2016—the substance behind the figures is hollow.

Jim Clifton, CEO of pollster titan Gallup, Inc., called into question the Obama economy’s false narrative and positive spin on recent unemployment numbers, calling them a “big lie.” Clifton criticized the U.S. Department of Labor for omitting Americans who quit their job searches after four weeks due to a lack of hope, as well as counting any part-time work, no matter how shabby, as employment. (Source: “Jim Clifton, Gallup CEO on job numbers: It’s all a “big lie” by the White House,” Washington Times, February 5, 2015.)

These counting omissions and additions undoubtedly helped deflate the labor force participation rate from 65.7% to a low of 62.5%, the lowest figure since 1978. On a net basis, more people were unemployed than in any time in America’s great history.

Discrepancy #2: Strong Economic Growth

While it’s universally acknowledged that Obama inherited a bad U.S. economy entering office, growth has nonetheless been tepid at best. In his first full year following the U.S. housing crisis until the end of Obama’s presidency, real GDP growth rose between 1.24% and 2.71%. Thus, Obama just became the only U.S. president in history not to have presided over one year of three-percent GDP growth.

Worse still, average annual growth during that time span averaged around 1.55%. Only Andrew Johnson, Herbert Hoover, and Theodore Roosevelt had worse records of economic growth. (Source: “The Social and Political Cost of Slow Economic Growth,” The Institute for Policy Innovation, May 4, 2016.)

And here’s the clincher: anemic growth rules the day, despite $7.917 trillion added to the national debt, or a 68% increase from the levels inherited from George W. Bush. (Source: “U.S. Debt by President: By Dollar and Percent,” the balance, November 21, 2016.)

That kind of money should have bought an economic bazooka, not a water gun.

Discrepancy #3: Rising Economic Tide Raised All Boats

While the White House boasts about the 15.6 million jobs created over 81 months, has it really helped the lift the bottom rungs of society out of poverty? The evidence does not appear to show that.

Income inequity has risen under the Obama economy. Figures show that a greater portion of the nation’s wealth has become more concentrated in the hands of the rich, or the top one percent. From 1989 to 2010, the concentration of wealth at the top increased from 30.1% to 34.5% and, under another methodology, to 36.6% in 2013. (Source: “During Obama’s Presidency Wealth Inequality has Increased and Poverty Levels are Higher,” Counterpunch, February 26, 2016.)

Furthermore, extreme poverty levels, defined as having an income at 50% or lower than the poverty level, have expanded at a rapid pace. Every year in the Obama economy, this percentage has been above the six percent mark, or greater than 20 million people. The last time this figure was over six percent was in 1992, during Bill Clinton’s first term as president. (Source: Ibid.)

Some progress.

So, while perspective of Obama’s economic achievements can be skewed alongside ideological viewpoints, count me among the cynical. While Obama promised America “hope and change” from a progressive left-of-center dogma, it was more of the “same ol’, same ‘ol” from an economic standpoint.


 

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