In a recent interview with the Economist, President Barack Obama made the following statement: “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.”
The president made similar remarks in an interview last month with CNBC’s Steve Liesman: “If you think about where we were, Steve, when I came into office and where we are now, it’s pretty hard to find an economic measure where we’re not significantly better off.”
Here’s a look at how the indicators have fared:
First, if the performance of stock markets since the day the president took office are a referendum on his economic policies, then stocks have remained enthusiastic. Some might argue, however, that stocks are more driven by Federal Reserve interest rate policy, and may be disconnected from the health of the real economy.
Mr. Obama in his CNBC interview also mentioned unemployment, which is lower than it was when he took office, and said that “we’ve seen the housing market recover, although not as fast as we would like.” By many of the most closely-watched overall measures of the economy, the U.S. has, indeed, improved over the past 6 years. Home prices, the economy’s gross domestic product, the total number of jobs and industrial production have all risen from when he took office.
Yet it’s also not that hard to find indicators that do not show the U.S. significantly better off. In the CNBC interview, Mr. Liesman rattled one off the top of his head to Mr. Obama.
“Median family incomes, that’s one that is not doing better,” he said.
Indeed, adjusted for inflation, incomes declined around the turn of the century and never quite regained their previous peak under President George W. Bush. Since Mr. Obama took office, the median income rate has continued to decline, according to Census Bureau data through 2012. The president agreed with Mr. Liesman that incomes have fallen and touted proposals to raise the minimum wage and invest in American infrastructure as policies that could reverse the decline.
Another measure that hasn’t improved under Mr. Obama’s presidency is the share of the population that participates in the labor force. Much of this decline may be the result of the aging population. The enormous Baby Boom generation is, indeed, reaching retirement age. Yet aging is not the whole story. Workers far too young to retire are also sitting out the labor force.
Labor force participation rose through the 1990s as women became increasingly likely to join the labor force. But participation of prime-age workers peaked in the 1990s and declined slightly in the 2000s and at an accelerating pace since Mr. Obama assumed office.
Another measure that does not point to an improving economy is enrollment in the Supplemental Nutrition Assistance Program, commonly known as food stamps. Even though the recession officially ended in mid-2009, the number of people collecting food stamps continued to climb until recent months, and participation in the program remains far higher than any other point over the past 30 years.
One challenge with judging the economic records of presidents, however, is that much of the economy is outside the control of the Commander in Chief. Congress can thwart good legislation or pass bad legislation. The Federal Reserve, many members of which were appointed by the previous guy, may make policy errors or set great policy. Demographics and international economic conditions can drive much of the economy too.
Evaluating economic indicators over the course of Mr. Obama’s presidency is especially perilous because he took office in the middle of a deep recession, amid the collapse of a massive housing bubble, that left many measures of the nation’s economic health at their worst level in decades. Does Mr. Obama or natural economic forces deserve credit for the rebound? Did Mr. Obama’s policies make the economy rebound too slowly, or do bursting financial bubbles always leave economies that take years to recover?
Two Princeton University professors recently waded into this debate. Alan Blinder, a former Fed vice chairman appointed by Bill Clinton and Mark Watson, a career academic, studied the economy across presidencies and found that economic growth was stronger during Democratic presidencies. They cautioned, however, against attributing this to successful policy.
“Democrats would no doubt like to attribute the large D-R growth gap to macroeconomic policy choices, but the data do not support such a claim,” they wrote.
“It seems we must look instead to several variables that are mostly `good luck,’ with perhaps a touch of `good policy.’ Specifically, Democratic presidents have experienced, on average, better oil shocks than Republicans (some of which may have been induced by foreign policy), a better legacy of productivity shocks, more favorable international conditions, and perhaps more
optimistic consumer expectations,” they concluded.
As noted in an earlier post studying presidents by their records on poverty, the poverty rate has climbed since Mr. Obama took office. Through 2012, the most recent year available, the number of people in poverty had risen by 2.9 million.
Studying presidents by their job creation record, also places Mr. Obama near the bottom of the pack. Since the presidency of Harry Truman, only three presidents have seen the level of employment grow by a smaller percent than Mr. Obama: the brief presidency of Gerald Ford, the one-term presidency of George H.W. Bush, and that of his son, George W. Bush which ended in the recession.
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