September 5, 2012

Obama's Economy

Marc Comtois

Better off?

Under President Obama…Jan-09Today
Gasoline$1.84 $3.84
National Debt$10.6 Trillion$16 Trillion
# Unemployed11.98 million12.8 million
Median Income$53,410 $50,964
# Food Stamp Users31.98 million46.7 million
Poverty Rate13.20%15.70%
Oil (Europe), barrel$41.22 $113
Oil (Texas), barrel$38.57 $95
Gold, oz$853 $1,690
Corn, bushel$3.67 $8.45
Sugar (raw), lb$13.09 $19.34
Hamburger, lb$1.99 $3.45

Everything is higher....except median income.

(Sources after the jump)


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While all are undoubtedly true facts, can you really say with a straight face that ANY president can truly significantly impact the price of: gasoline, oil, gold, corn, sugar or hamburger.

re: almost everything else on the list, Congress is at least as much to blame as any president would be on these issues.

I haven't seen any real proposals from anyone that stands a chance of passage that effectively deals with the tough economic issues that policy can impact.

A pox on everyone's house here - I just don't see how all of the blame for where we are can be placed on just one person.

Posted by: Ken Block at September 5, 2012 1:15 PM

^ Agreed.

Let's be honest: When people save 0% and leverage themselves out 200-500% the way they were during the last boom, then a few trillion disappears under their feet, there -is- no fast recovery. There never was going to be a fast recovery, but saying so would have only made it worse.

And me? Yeah, I actually AM better off, because I have significant investments in retirement, and I chose to live small and close to my work instead of burning a bazillion gallons of fuel every month.

I think the divisiveness and partisanship in policy has caused more damage than anything, markets HATE uncertainty more than anything else. Every solvent business should be able to afford Obamacare, but no business can afford to NOT KNOW if Obamacare will exist in two years.

Posted by: mangeek at September 5, 2012 1:23 PM

"Every solvent business should be able to afford Obamacare, but no business can afford to NOT KNOW if Obamacare will exist in two years."

I think you're making an assumption without merit in the first instance. I will also add that I just had a conversation with a very good friend this weekend who owns a very large landscaping company. He's waiting to see if it survives. If it does, he'll cut his crews down just to get below the requirement. He's not even choosing to pay the fine instead. How many other 'solvent' businesses are waiting to do the same? Not only will there be more people getting their coverage from the government, they'll be lining up at DLT too. It served as a reminder of what opponents have been saying all along.

Posted by: Max D at September 5, 2012 1:54 PM

I think the most interesting thing is to observe the two people who jumped in to comment right away and minimize the point.

It's difficult to know where (or whether) to begin a response.

Billions squandered on stimulus, much of it going to green cronyism. Oil pipeline killed (by one person, Ken). Prioritization of controversial policies, rather than willingness to work with the other side on critical issues.

Meanwhile, mangeek blames the people... after all the mainstream talk during stimulus days about getting money into people's hands because they'll spend it. And of course, the implicit blame that mangeek places on Republicans for not capitulating to the president's radical agenda.

Posted by: Justin Katz at September 5, 2012 1:56 PM

Ah, you guys beat me to it. Anyone claiming the price of oil is controlled by U.S. presidents is clearly playing politics. The failure of the administration and Congress to deal with unemployment is valid imho.

Justin, you're fiscal conservatism would be more believable if you ever talked about programs other than social welfare and environmentalism (woohoo, war is free!).

Posted by: Russ at September 5, 2012 2:13 PM

Remember the 1988 Dukakis campaign theme?

"It's not about ideology, it's about competence."

Can Pres. Obama's supporters honestly claim that he has been a competent Chief Executive?

If I were a Democrat (I'm not any more), and if I had read Robert Caro's recent volume of the LBJ biography (I just did) I'd be struck by President Johnson's ability to turn the liberal proposals of the Kennedy Administration into legislative reality.

Whatever the merits of those policies, LBJ knew how to get them through Congress. He was not, leading up to the 1964 election, groaning about the divisions in Congress, the intransigence of the Southern-Dem dominated Senate, etc., etc. Instead, he was able to run on real legislative successes.

Whining about Republican obstructionism is not leadership.

(Another interesting side note in the LBJ bio: The centerpiece of JFK's economic program was a proposed tax cut, which JFK could not pass but LBJ did. It's interesting to read the sale that JFK tried to make and that LBJ closed; lower taxes meant economic expansion and greater employment. How would that message go over among delegates in Charlotte today, d'you think?)

Posted by: brassband at September 5, 2012 2:15 PM

Justin -

I have seen you write repeatedly that the RI General Assembly is largely to blame for a whole host of bad things (and I agree with you on that).

I do not understand how you can apply one set of metrics to the RI executive and legislative branches of government and a completely different set to the same federal branches.

IMHO, the same dynamics and assessments apply to both.

Posted by: Ken Block at September 5, 2012 2:31 PM

"I do not understand how you can apply one set of metrics to the RI executive and legislative branches of government and a completely different set to the same federal branches."

Not sure I agree that the one party dominated GA in Rhode Island is comparable to Congress.

Posted by: Max D. at September 5, 2012 2:51 PM

Funny that some argue that we can't attribute all the negative things listed to one man. Yet this one man can claim he (I, I, I...) got OBL? That he "saved" GM? It's like listening to my young son--bad things aren't my fault; but I'll take full credit for anything that goes well...

Both claims are false. As for the negatives, it's not one man--it's one man's philosophy and actions backed by an army of like-minded sycophants and a compliant, obstructionist Senate. Budget, anyone? Nov can't come fast enough....

Posted by: Mike678 at September 5, 2012 4:00 PM

Mike 678 -

"Budget, anyone?"

What about the debt growth between 2000-2008 or the debt growth between 1980 -1992? Budget anyone?? Lets face it, it's not the budget, you just don't care for who is in office right now. And that is ok but don't lecture about budgets.

Posted by: Tom Nichols at September 5, 2012 4:12 PM

The title of this thread should be

"John Boehner and Mitch NcConnell's economy"
better off ?
You're Welcome

Sammy the "Title Repair Man" in AZ

Posted by: Sammy in Arizona at September 5, 2012 4:31 PM


I'm not sure I follow your objection. In RI, the General Assembly's one-sidedness and constitutional power make the governor into a sort of advisor (although Chafee is proving, with executive orders and such, that he can issue edicts when legislators will let him). On the national scale, Obama set a tone nationally when he ignored the deficit commission, rammed through ObamaCare, and so on. (If you want to give party to his Democrat allies in the legislature, then fine, we'll expand the analysis to include them, while acknowledging that he didn't exactly buck them.)

On the larger issue, though, I used to agree that the government had little to do with economic health, but since I've been spending all day every day researching, I'm having to reevaluate. Micromanagement of the economy isn't possible from the Oval Office, but the litany of stats that Marc cites shows something much more significant, and I'm afraid I'm coming to the conclusion that government has much more influence than I'd previously thought.

Posted by: Justin Katz at September 5, 2012 4:42 PM

"...obstructionist Senate. Budget, anyone? "

The Senate didn't pass a budget from the House that they didn't like? Then they couldn't come to agreement on it? That sounds like the house isn't working well, either. If the upper house finds the budget objectionable, they're not obliged to pass it. That's how it's -supposed- to work.

All the House-proposed plans had cuts. While I share the belief that the federal government should take a smaller role and states should step up, economists generally agree that shrinking the federal budget through cuts would be detrimental to the economy right now. Remember that the federal budget can 'create' money through spending on debt, so it's possible to have years where there's more economic activity than money to back it, states have no such facility. During a slow economy, you probably don't want to cut 'the free money' and force the use of 'real money'.

"I just had a conversation with a very good friend this weekend who owns a very large landscaping company. He's waiting to see if it survives. If it does, he'll cut his crews down just to get below the requirement."

I know several small businessmen doing the same. It's idiotic to put your businesses' growth on hold to skirt a regulation like this, though. It really is.

"Billions squandered on stimulus, much of it going to green cronyism."

Yeah, but the 'green' stuff was a tiny sliver of the pie. It really is of virtually no consequence to the big picture. I think it was cronyism, too, but that doesn't mean that it substantially affected things one way or another. Remember that the Obama Stimulus had $288B in payroll tax cuts compared to $0.5B for Solyndra. So much of the current Republican mantra is pointing and screaming at spilled cups of water during a hurricane.

"Mangeek blames the people..."

Damn right I blame the people. That's what makes me unwelcome in liberal circles. I'm the one feeding paycheck after paycheck into the void created by a nation of house-flippers and mortgage-deserters.

"...after all the mainstream talk during stimulus days about getting money into people's hands because they'll spend it"

I never said that. I think George W. Bush was the one who 'redistributed' $600 to each person, wasn't he? I could have told you that no tax cut or stimulus spending in the world would have made up for the trillions of value lost in the bubble bursting, and that we were heading into our own 'lost decade'.

"blame... on Republicans for not capitulating to the president's radical agenda."

I think it's pretty clear that Obama is just slightly left-of-center. The only 'radical agenda' I see is the real one from the Tea Party end of the Right, and the imaginary Socialist Obama that only exists in half the nation's mind. From an actual policy perspective, Obama's policies have been quite tame, except that he's been particularly 'carrot and stick' with respect to immigration and anti-terrorism.

Posted by: mangeek at September 5, 2012 5:02 PM

"Every solvent business should be able to afford Obamacare"

What? Mangeek, sorry to be offensive but how is it your place - or, more specifically, President Obama's - 1.) to make that determination? and 2.) to dictate what a corporation or an individual should spend its money on?

Posted by: Monique at September 5, 2012 5:04 PM


I'm not surprised that you find Obama "slightly left-of-center," and I'm sure you won't be surprised that I find that statement delusional. "Left-of-center" doesn't mean "compassionate" and "all things nice."

Be that as it may, your economic argument, at least within these comments, is confused... at least it's confusing me. Cutting government spending might be detrimental for the reason that it might take money out of the active economy, but for the opposite approach to be effective, people have to spend it. That is, the economic view you're relying on also relies on people to behave in ways that you lament.

You cite payroll tax cuts and then divert attention to Bush's handouts.

But the larger picture is this: The economic policies of this president and his allies, ultimately accepted by the Left (which often encouraged a stronger lunge in the same direction) would up shuffling the trillions of new debt borrowed from the future to fill the gap in investors' accounts after they'd lost money on the phony gamble of the housing bubble.

Policies (of a more Reaganesque character) that made the people who risked the money to eat more of the trillions of lost value might have avoided our current stagnation. Instead, all monetary growth has gone right back into the stock market, but to fill gaps, not to expand investment.

Posted by: Justin Katz at September 5, 2012 5:20 PM

Why does everything have to be an all or nothing in politics? The comparison of the statistics between 2009 (when President Obama first assumed office) and now is ridiculous, especially the prices of gas. In January 2009, we were in the early stages of the Great Depression II (Intelligent scholars can argue it was a Recession but to those of us in the trenches of everyday life, it was a Depression) so gas prices and other statistics were low due to deflation. (BTW, if you catch CNBC, higher oil/gas prices are signs that economic activity is getting better.) Also, you can attribute the low unemployment rate in 2009 to the simple fact that this country was in the early stages of the economic crises. Shortly, thereafter, unemployment soared because the economic situation which had begun to unravel before President Obama was even elected deteroriated quickly and would rebound, unfortunately, not fast enough. We can debate about President Obama's policies, thereafter, i.e. the food stamps, the debt, the stimulus all day long but to compare all these statistics and to blame it all on President Obama is disingenious. I realize everyone likes to believe one man has all that power because you disagree with his governing philosophy but it is not based in reality. There is a U.S. Congress that makes laws; surely we can't deny the cupability of that governing body. I believe the problem with the economy at this juncture is the President and US Congress BOTH have failed to set forth policies and legislation to provide certainty in the next decade for businesses to prepare and plan. (BTW, Representative Paul Ryan, the Republican Vice Presidential nominee, also voted against the Bowles-Simpson Plan as well, effectively destroying it's chances of moving on to the US Senate for consideration). And why did both Rep. Ryan vote against the BSP and President Obama ignore it, because they both knew at the time, it contained provisions deeply unpopular to the American people and neither wanted to own it in the 2012 election because it is about power first, country second with all our "fearless" leaders. Let's face it both parties and their respective leaders have done nothing to advance the country forward or face -- let alone -- tackle the daunting challenges. The three biggest drivers of our federal deficit: Medicare/Medicaid, Social Security and Defense. Neither side wants to tackle all three in a fair and reasonable solution because it will involve pain for everyone; American people do not like pain, particulary economic pain.

Posted by: Kerry at September 5, 2012 5:33 PM

"I'm coming to the conclusion that government has much more influence than I'd previously thought."

There has been a major shift in the U.S. economy over the past several decades from a non-zero-sum game to a zero-sum game. As the administrative state has grown exponentially, businesses have learned that it is now often cheaper and less risky to invest their time and money into capturing a regulatory process rather than investing in their products and advertising to compete with other companies on an equal basis. In other words, companies used to have to better themselves to make profits and "the pie" grew bigger. Now, many companies instead use government to drive their competitors out of business or mandate their products in order to get a bigger piece of a same-size or smaller pie. This is not a healthy trend for an economy and it is ultimately at the expense of the consumers and middle class. The White House does have a significant influence over the administrative state and its regulatory policies, if little else with a hostile Congress.

Posted by: Dan at September 5, 2012 5:55 PM

"Billions squandered on stimulus, much of it going to green cronyism."

For the green cronyism you can blame that on the Republicans not Obama as the “Energy Policy Act of 2005” (Pub.L. 109-58) is a bill passed by the United States Congress on July 29, 2005 (introduced in the House as H.R.6 by Rep. Joe Barton (R-TX) on April 18, 2005), and signed into law by President George W. Bush on August 8, 2005, at Sandia National Laboratories in Albuquerque, New Mexico. The act, described by proponents as an attempt to combat growing energy problems, changed US energy policy by providing tax incentives and loan guarantees for energy production of various types.

As for Obamacare, there are only two states in the nation that tackled healthcare reform in its entirety; Hawaii and Massachusetts.

All I can say is my Blue Cross Blue Shield and Delta Dental coverage dropped approximately $100 a month moving from Rhode Island to Hawaii for same level coverage.

Over 40 years ago Hawaii debated, drafted and then created the “Hawaii Prepaid Health Care (PHC) Act” (PHCA) is a state law (Hawaii Revised Statutes Chapter 393) enacted June 12, 1974 in the State of Hawaii to improve health care coverage by employer mandate. Under the law, businesses are required to offer health insurance to employees who work more than 20 hours per week for four or more consecutive weeks in the State of Hawaii. After the law was enacted Hawaii had the highest state population rate covered by healthcare insurance at 98% population. Since the 2009 recession insured rate has dropped to 91.8%. Hawaii does have a state run “Quest” Medicaid type of insurance plan covering population that does not have employer based healthcare insurance which is a sliding fee based on ability to pay.

The Massachusetts health care insurance reform law, St. 2006, c.58, informally referred to as "Romneycare", enacted in 2006, mandates that nearly every resident of Massachusetts obtain a state-government-regulated minimum level of healthcare insurance coverage and provides free health care insurance for residents earning less than 150% of the federal poverty level (FPL). The bill aimed to cover 95% of the state's 500,000 uninsured within a three year period. The law was amended significantly in 2008 and twice in 2010 and major revisions related to health care industry price controls were introduced in the Massachusetts legislature in May 2012 that passed in August 2012.

Among its many effects, the law and its amendments established an independent public authority, the Commonwealth Health Insurance Connector Authority, also known as the Health Connector. Among other roles, the Connector acts as an insurance broker to offer private insurance plans to residents. The reform legislation also included tax penalties on residents for failing to obtain an insurance plan and tax penalties on employers for failing to offer an insurance plan to employees. In 2007, Massachusetts tax filers who failed to enroll in a health insurance plan which was deemed affordable for them lost the $219 personal exemption on their income tax. Beginning in 2008, the penalty became pegged to 50% of the lowest monthly premium for insurance available from the Connector Authority.

Mitt Romney indicates if elected he will rescind Obamacare and I guess replace it with his landmark Massachusetts "Romneycare".

Posted by: KenW at September 5, 2012 6:34 PM


You asked; “Better off?”

My answer to you is I’m a lot better off since I left Rhode Island!!

My retirement income is exempt from state income tax; my social security is not taxed like it would be if I stayed in RI. My property tax is $300 per year verses over 10 times that amount back in RI. There is no property tax on my vehicle verses over $300 back in RI. My sales tax is 4% versus 7% back in RI.

My healthcare insurance costs dropped approximately $100 per month moving out of RI and my car insurance dropped $1,000 a year moving out of RI. I no longer have fall, winter and spring heating bills as my median 365 day temperature is 78 F degrees which also means I no longer need fall, winter and spring wardrobes.

I own a large condominium over-looking a large white sand beach with all luxury amenities in a gated/guarded community in between 2 professional 18-hole golf courses walking distance to 19th holes and walking distance to the beach. Unlike RI all beaches here are free with free parking, bathhouses, showers, lifeguards, cleaning/maintenance staff and picnic grounds. I have 20 miles of the most pristine and unspoiled beaches and parks in my community.

People in this state respect seniors (anyone age 50 and up is considered senior citizen) and seniors are afforded up to 50% discount by business and government. My cost of living is now about 1/3 of what it cost to live in RI meaning I have more money in the bank and to invest plus fly back and forth first class on airlines.

Oh by the way, a lot of other people must be better off too because tourism in this state is about to break all records as first 6 months visitors dumped $7.1 billion into our economy and are on track to dump over $14 billion by December 2012. Highest record was 2007 when visitors spent $12.7 billion.

Posted by: KenW at September 5, 2012 10:07 PM

The government will not be able to "save the people" and provide subsidies if prices for everything do not rise.

It is not a coincidence that gas prices rose so far and so fast since January '08.

Posted by: dave at September 6, 2012 7:37 AM

Say what was the DOW in 2009? Let's try that one out...

January 2009 -> 8000
Today -> 13000

Up 60% in four years! My 401k is certainly better off than it was 4 years ago. If that was a Republican feat you'd be doing back flips (funny all of a sudden Republicans care more about food stamps than the DOW)!

Posted by: Russ at September 6, 2012 8:47 AM

"Policies (of a more Reaganesque character) that made the people who risked the money to eat more of the trillions of lost value..."

Reaganesque like when he let Continental Illinois National Bank and Trust Co. go under. What's that? Oh. "Reaganesque character" as in ignore what Reagan actually did, we're talking fringe-right mythology here.

Not to mention the even more massive S&L bailout unde Bush the Greater in '89, which had nothing at all to do with Reagan or with Rebulicans... of course Justin was like 5 years old then, right? Who remembers that?

Posted by: Russ at September 6, 2012 11:45 AM

Some more from Juan Cole...

1. In January 2009 we lost 600,000 jobs. In 2008 over-all, we lost 2.6 million jobs, the most in 6 decades! We’re now adding over 100,000 jobs a month.

2. Home mortgage foreclosures had spiked 80% in 2008!

3. We were at war in Iraq in January, 2009, with 314 American troops killed in 2008 in what had become a fruitless quagmire launched on false pretexts in contravention of international law. The US military is out of Iraq, despite the lobbying of the Republican Party and elements in the Pentagon to try to stay there in the teeth of Iraqi opposition.

4. Usama Bin Laden, despite having killed over 3000 Americans on US soil, was still at large and actively plotting further attacks in the US. The Bush administration had closed down the CIA Bin Laden desk.

5. In January 2009, US new auto sales fell 37%, the most in decades, and for the first time China sold more cars than America. The major automobile companies were heading for bankruptcy. Obama turned all that around, in the teeth of opposition from people like Mitt Romney.

6. Non-hydro renewable energy only supplied 3% of American electricity; now it is nearly 6%, in large part because of Obama incentives. Green energy reduces carbon dioxide emissions and so helps decrease the worst effects of global warming, and its increases US energy inedependence.

7. Some 30 million Americans lacked basic health care insurance, who will now be covered, including large numbers of children.

8. Our country had betrayed its most basic values by torturing prisoners. Obama called a halt to water-boarding.

9. George W. Bush was president.

10. Dick Cheney was vice president!

Posted by: Russ at September 6, 2012 4:12 PM

"Lets face it, it's not the budget, you just don't care for who is in office right now. And that is ok but don't lecture about budgets.

Posted by Tom Nichols at September 5, 2012 4:12 PM

Tom--Chill. It's the budget. True--I don't like the spendthrift policies of the current administration, enabled by the lack of a budget.

"The lack of a budget plan for the past three years has exacerbated America's fiscal problems because, for three years, Congress has not passed a roadmap to bring spiraling deficits under control."

So, please explain why Congress hasn't passed a budget in three years? BTW, please don't infer an obstructionist house as others have--Republicans have controlled the house for only the last two years... Could it be that the current administration has no plan except business as usual until it all falls apart?

Posted by: Mike678 at September 6, 2012 4:13 PM
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