Thursday, October 23, 2014
There’s no sugar-coating Obama’s economy
During his 60 Minutes interview late last month, President Obama put an old and familiar rhetorical question to the voters: “Ronald Reagan used to ask the question, ‘Are you better off than you were four years ago?’…And the answer is, the country is definitely better off than we were when I came into office.”
Most members of the public do not share this view, according to this week’s Washington Post/ABC News poll. Only 22 percent surveyed agreed that they are “better off financially” than they were when Obama was inaugurated in January 2009 — including only 37 percent of Democratic partisans. This says a lot about how people feel, because six years ago, the nation was embroiled in the very financial crisis that Obama still cites to absolve himself from blame for America’s continued economic doldrums.
When pressed in the same interview, Obama had to concede that most Americans aren’t feeling the recovery he has been touting ever since the so-called “Recovery Summer” of 2010. That’s because for workers, there hasn’t been much of a recovery.
The U.S. economy did experience robust economic growth in the second quarter, but on Wednesday, the Commerce Department reported a drop in retail sales in September — a potentially worrying sign as the holiday shopping season approaches. Furthermore, fears are growing that the weak global economy could weigh down the U.S.
The stock market boom had been a sign of growing confidence among investors, but even that has been recently cast into doubt by repeated triple-digit bear-raids on the Dow that have wiped out all of the market’s gains for 2014.
Another bright spot has been the standard unemployment rate, which at just 5.9 percent last month has fallen off significantly since Oct. 2009. But that statistic doesn’t reflect the reality faced by many Americans.
For one thing, the rate fails to capture a strong current trend toward the substitution of part-time for full-time work. Even as the overall number of jobs in the United States recently surpassed the pre-recession highs of late 2007, the number of full-time employees in America last month was still about 2 million less than it was in September 2007. Part-time work, which jumped as the recession began, has remained at historically high levels, 2.4 million higher than it had been seven years earlier.
Nor does the unemployment rate capture the pessimism of Millennials and members of Generation X — those currently in their prime working years. According to the Bureau of Labor Statistics, there are about 5 million fewer people aged 25 to 54 with jobs today than there were when the recession began.
Third, the unemployment rate also doesn’t reflect the lower wages workers are making today. As the Washington Examiner’s Joseph Lawler has observed, median household income is still down 8 percent from 2007, and wages are currently just keeping up with inflation.
Finally, the unemployment rate can be deceptive because it goes down as people stop looking for work. Labor participation remains mired near a 30-year low.
Full article: http://www.washingto … nomy/article/2554897
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