One common theme among the GOP presidential candidates has become a universal constant across the entire field. According to each of them, from Mitt Romney to Rick Perry to Michelle Bachmann to Jon Huntsman to Herman Cain, President Obama has apparently “ruined the economy” or “failed America”.
But has he?
The first 2 ½ years of Barack Obama's presidency experienced numerous challenges and has been presented with a copious amount of, shall we say exuberant, criticisms. From Newt Gingrich to Dick Cheney to many a conservative pundit, the most pointed attacks questioned his approach to fighting Al Qaeda. Obama's policies were deemed, “too soft on terrorism” or characterized as “recklessness cloaked in righteousness”. Yet during those years we saw numerous members of the Al Qaeda and Taliban leadership captured or killed. Then on May 1, 2011, in a critical test of his leadership, President Obama gave the order for the mission which resulted in the killing of the most wanted man in the world, the mastermind of the 9/11 attacks, Osama bin Laden. This one event quite effectively called into question the credibility of the president's critics.
Given previous inaccuracies how unwarranted would it be to question the veracity of the criticism leveled against his economic leadership?
When Obama took office in January 2009, we were in the midst of the worst financial crisis since the Great Depression, a crisis which began in December 2007. The U.S. economy had already lost 2.6 million jobs, the highest total loss in more than 60 years. The GDP registered a -6.8% growth rate. By early 2009 the markets (Dow, S&P 500, LEI) were at their lowest level of the recession. From January to April 2009 job losses averaged 650,000 per month, giving many a feeling the economy was quite literally in free-fall.
Since the low point in 2009's 1st quarter and early 2nd, the recovery has moved forward, slow for many but forward nonetheless. GDP recovered from its negative levels to a high of 5% in January 2010 with its current growth rate standing at 1.3%, averaging 2.4% growth since 2009's 4th quarter. The markets have improved on a positive trend reaching some of their highest levels since the beginning of 2008. The Congressional Budget Office Director stated in congressional testimony in January 2010 that, “... aggressive action by the Federal Reserve and the fiscal stimulus package helped moderate the severity of the recession and shorten its duration...” but went on to say this support was expected to wane, as it has. Ben Bernanke reported in June 2011 that the Fed's 12 districts are growing at a solid pace and as of October are continuing to grow albeit at a slower rate. And, according to recent Commerce Department figures, foreign investment increased 49% in 2010 over the year before contributing to manufacturing job growth.
Stubborn job creation is prime fodder for criticism of the president's policies. According to conservative politicians and punditry every piece of economic legislation, including the Stimulus Bill, was a failure.
Yes, job creation is growing at an arduous pace for many. It is, however, progressing - or was until this past summer - at a more positive rate than either the public or the president's critics perceive. The Stimulus, despite the repetitive claims to the contrary, did create jobs. Two CBO reports, three independent reports and repeated Politifact analyses all conclude it created or saved a minimum of 1.3 million jobs averaing 2.4 million across all the findings. As of June 2011 the economy experienced 15 consecutive months of private sector job growth. Recent updated job growth figures for July and August of this year indicated there were 127,000 and 57,000 jobs added each month respectively. In addition, Gallup's Job Creation Index currently indicates a 44.4% increase in job creation from the year before and is higher than the long-term average. Despite the slow growth the economy has added 1.34 million private sector jobs this year.
How does this compare to previous recessions?
Referencing Calculated Risk's Post-WWII Recessions assessment we can examine past downturns. Compared to the 2000-2001 recession when job loss percentage reached -2.0%, the 2007-2009 Great Recession bottomed out at approximately -6.4%. The previous one took 21 months to reach pre-recession levels. Currently, we are 26 months into our recovery, pulling ourselves out of a much deeper hole.
Furthermore, the last two recessions endured longer recovery times related to the aforementioned measure of job loss percentage. Of the seven recessions from 1948 to 1981 the average recovery time was 9 months. However, recovery time for the 1991 recession increased to 16 months and to 21 months for the 2000-2001 recession. There's no reason to believe our current situation will not follow this apparent trend given its depth and the present rate of recovery.
The economic indicators illustrating definite improvement may not be the eye catchers many news organizations would like to report, they do nonetheless illustrate the strides we have made. While criticisms of the President prevail and his handling of the economy slips in public opinion polling, is it possible the debate is too narrow given the complexity of the US economy, the breadth of the recession's impacts and an ever increasingly interrelated global economy? With an apparent emerging trend of slower recoveries are the criticisms in line with the realities of the situation or even the basic practicality of repairing such an immense economic collapse?
We like to hold our presidents accountable for virtually everything that happens during their tenure. With that being the case let's give credit where credit is due as well. Instead of demanding a full recovery in the same amount of time as significantly less severe recessions, we should temper our “instant gratification” mentality in favor of a more realistic perspective. The achievements so far hardly speak to presidential failure, illustrating rather positive growth, investment and job creation which serves as a foundation for an ongoing recovery that can only continue if current congressional gridlock is overcome.