9/12/2012 8:08 PM ET|
Are we better off under Obama?
Republicans will ask voters if things have improved over the past 4 years, and most of the economic numbers have. But with a slow recovery leaving millions out, are the gains enough?
The 2012 election has entered the final stage in a dead heat. As the Republicans look to take down President Barack Obama, they're focusing on the piddling economic recovery as proof his policies have failed. It can be summed up in a singular question, oft repeated at the GOP convention in Tampa: Are you better off now than you were four years ago?
Clearly, Mitt Romney's supporters are looking to capitalize on a negative view of the pace of recovery, an unemployment rate still north of 8%, a housing market only beginning to stabilize and households still struggling to reduce accumulated debts at a time of stagnant wage growth.
Fair or not, it's a message that resonates.
According to a CBS News poll last month, 62% believe the country is on the wrong track -- up from 48% in the early days of the Obama administration. Some 42% believe the U.S. economy is headed for a new recession in the next few months. And 39% think their families are worse off today than they were four years ago -- about the same as what we saw in November 2008, when the country voted for hope and change in the midst of the subprime meltdown.
Obama's task, never easy, has been made more difficult by the political gridlock we've seen since Republicans won control of the House in 2010, gumming up any chance of additional fiscal stimulus or meaningful progress on the debt/deficit issue, and resulting in the credit downgrade of the U.S. Treasury last August that shocked market and business confidence.
Instead of taking action on Obama's jobs plan or looking at issues with bipartisan support (such as tax reform), Washington has descended into political blood sport where everyone plays for keeps and no one crosses the aisle. Things are likely to get worse as we barrel toward a "fiscal cliff" of tax hikes and spending cuts worth nearly 5% of the gross domestic product as the calendar flips to 2013. (Read "Countdown to the fiscal cliff.")
But before then, we've got an election to decide. And that means voters need to answer the critical question: Are we better off since Obama took office? Here's a look, by the numbers, at the past four years in the four areas that matter most: economic growth, jobs, income and wealth.
The overall takeaway: The economy has improved, but it's far from great for many Americans. Voters will have to decide whether that's good enough to elect Obama to a second term.
When Obama took office, the economy was shrinking at roughly 8% annually. For most of Obama's term, it's been growing, as the chart below shows. In absolute terms, the economy is now $853 billion larger than it was before Obama was inaugurated. So, yes, we're better off.
But if you're a little disappointed, you're not alone.
Coming out of the worst financial crisis since the Great Depression, ending a 20-year dependence on credit-fueled growth and in the wake of a delayed response to the crisis by the administration of then-President George W. Bush, the recovery was always going to be fitful. So it's no surprise that, 18 quarters after the pre-recession peak in GDP activity, the economy has managed to grow only 1.8% over the pre-recession high.
According to Credit Suisse economists, that's far from where we should be if this had been a normal recession -- the kind people have experienced before. On average, 18 months into a mild recession, GDP should be 10.4% larger than it is now. For a severe recession, it should be nearly 14% larger. That's almost $2 trillion in lost output, lost wages and lost prosperity.
When Obama took office, the economy was losing nearly 820,000 jobs a month. The losses stopped in December 2009, and since then, the economy has created more than 4.1 million jobs.
But we haven't fully recovered. Philippa Dunne of The Liscio Report notes that we're still 4.7 million jobs below the pre-recession peak, as the chart below shows. At the rate we're creating jobs right now, it would take four years to regain those levels -- not even accounting for population growth.
Source: Federal Reseve
What's worse is that the job-growth rate has stalled. Nonfarm payrolls added 96,000 jobs in August, the fifth sub-100,000 gain in the past six months and an average gain of 205,000 per month for the previous six months. The unemployment rate fell to 8.1%, thanks to an estimated 386,000 workers who gave up and left the labor force. As a result, the labor force participation rate is at its lowest level since 1981.
Not a good sign.
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In his first election Obama said he was going to change things. Now he is saying we are the change.
In fact we are changed No jobs , homeless in some cases, bank accts have dwindled , retirement
almost impossible etc etc. He did some changes put in a micro brewery in the white house ,changed
his agenda to party mode concerts, golf vacations, his casual attire, ( dude you are the president of
the united states dress for sucess). He feels his wife should be paid for worthless crap she does.
Your Right Obam time for change and you don.t need to be part of it. Go MItt and Paul
No matter what may the lord help us to pick the best person, we are in trouble.
what is even more amazing, tom, is your elevated writing abilities combined with a total inability to read the article with any minimal level of comprehension due to "obama-fogging" of whatever areas of your brain are involved in that process. simply amazing.
"emphatically?" oh really? just what dictionary are you using - the Webster's Anti-Obama Pants-On-Fire edition?
"Let's hope that, no matter who wins this November, our elected officials immediately get to work to protect the slim gains that Obama has managed in a difficult environment."
yeeeesh .... blinders off and reality on please ....
The answer to the recession lies in the statement about CEO's holding back on hiring. Companies are profitable. They are sitting on cash as they extract every ounce of sweat out of their remaining workers that they can. The recession will end when companies care about their workers as much as their executives and shareholders. Did someone say something about hell freezing over? The government cutting taxes won't fix anything and will only add to the deficit.
An interesting issue from this article is that the numbers look much better when you don't seperate out the top 1% or 10%. They are the ones doing well. Average Americans are hurting. For Republicans, the figures would look much better if you take out the wealthy, but they can't do that because that would be divisive - class warfare. Of course we've already had the class war and the Middle Class got their clocks cleaned - the wealthy took it all.
I voted Obama the first time, not because he is part Black, not because he is a Democrat, but because McCain voted with Bush more than any other member of Congress (adding a bimbo VP didn't help his case either). I'll vote Obama this time because Romney is a clown. He is the ultimate flip-flopper. He walked away from his job as Mass governor after 3 years - kept the title, just didn't do the job. And he didn't become a millionaire by caring about people. Make no mistake, he got his money by screwing people. That's business. Great businessman. Not a man I want for president.
the Bush boys did alot of damage when they had control, its going to take more than 4 years to undo their cr**.
When an employee (Obama) is hired based on his glowing promises that he knows how to fix the major existing problems of the job as well as his declared assurances that he is fully aware of the complexities of these existing and critical problems, we simply have to fire him after he has had 3+ years of poor overall performance and results.
After 3+ years, this employee (Obama) simply can no longer blame his predecessor (Bush) or others (Republicans in the House or Democrats in the Senate) for his poor results and job performance.
When this employee's position (President of the USA) is a crucial one that affects almost everything and everyone, we must face the facts and "Make No Mistake" to stop this madness. We have to fire this employee (Obama), even if he seems like a decent sort of rich guy as his poor performances will bring down everything around us.
An old Chinese proverb teaches "Insanity is doing the same thing over and over again hoping to obtain a different result." Obama has promised MORE of the same policies and actions AND different results if given more time. This is INSANE! This is INSANITY!
We (and our future generations) absolutely cannot afford to waste anymore time on Obama's failures and failed policies. We cannot afford to give him anymore time to try his experiments on us, families, and our neighbors. It is time for rational people to fire Obama. We owe it to ourselves, our families, and the future generations of Americans to come.
All I see is some good so far, but I know this election is the lesser of two not so good choices. I vote for Obama and the gridlock continues, or I vote Romney and we go to some one who has clearly said little about his plans to fixt this problen, except he going to appeal Obamacare.
Now with that being said unless Romney starts speaking as to the problemand what he intends to do without balancing the budget on the middle class or the poor, I guess I be voting for Obama.
All the government spending need to be on the table to budget, but taxes cuts need to be as well. The real problem here is the Congress and since I have a few of those folks on the ballot I'm more interested in what they have to say.
Maybe you posters who think the President is all to blame shold look at your Congress members too. Remmeber this Congress can overide the President with a 2/3 vote is both houses, so who really has to power?
More research will get you facts, like the Democrats took over the House and Senate at the start of the 110th Congress on Jan.3 2007 not Jan 22, 2009. Problems we're blaming on Bush, can be directly attributed to the Democratic Congress and the then Senator Obama. Thi current fiasco cannot all be Bush's fault as much as you lib's want it to. Unemployment was 4.6% when Obama took office. He has since become an embarrassment. He shows no respect to the American people. He shows no respect for our country. He won't salute the flag unless you consider his crotch salute to be one. He puts his feet on the Resolute Desk in the Oval office and spends time playing golf, or riding around in a gas guzzler or flying off somewhere in the family jet.(Airforce One) instead of working. In the words of Michal Masie: a true black American" The American people have been sacrificing; it is he and his family who are behaving as if they've never had two nickels to rub together and now, having hit the mother lode, they're going to spend away their feelings of inadequacy at the taxpayers' expense." I say, it’s time this inept man was gone!
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