June 18, 2012 by econsforromney
Americans’ patience is running thin. Unemployment has been above 8 percent for 40 months. Since the recovery started, over 7.2 million Americans have given up looking for work and left the labor force. It is during recessions, not recoveries, that people are supposed to give up looking for work.
But it is obviously all Bush’s fault. At least, that is President Obama’s new take. During his big economic address on Thursday, Obama repeatedly said that the economic problems we face today were “a decade in the making.”
But there is a problem with Obama’s logic. Over the last three-and-a-half years, the president and his administration have continually claimed that the stimulus was working and that a robust recovery was starting. If the legacy of the Bush administration policies was going to hinder the recovery so badly, why did Obama keep on predicting that things were going to get better soon?
Recall that Obama told the Today show’s Matt Lauer in February 2009: “We’re starting to make some progress. But there’s still gonna be some pain out there. If I don’t have this done in three years, then there’s gonna be a one-term proposition.”
What about his economic predictions concerning the stimulus? On January 9, 2009, the incoming Obama administration predicted that the unemployment rate was going to peak at 7.9 percent during July, August, and September of 2009 and then gradually fall to 5.8 percent in May of this year. Not even close to 8.2 percent, last month’s actual number.
After the stimulus was signed into law in February 2009, following the fourth quarter of 2008’s 6.2 percent drop in GDP, the administration put out new predictions claiming that unemployment would peak at 8.1 percent in 2009 and drop to 6.3 percent by now. Again, that is not even close to what has happened.
In March 2009, when some economists, such as Harvard’s Greg Mankiw, questioned whether the stimulus would produce the promised benefits, Obama supporter Paul Krugman attacked their honesty. In one blog post at the New York Times entitled “Roots of evil,” Krugman accused Mankiw of “more than a bit of deliberate obtuseness” and claimed that “we can expect fast growth.”
Claims that the economy was on the verge of improving go back to the very beginning of the administration. Larry Summers, who then served as Obama’s chief economic adviser, promised on January 25, 2009, that the economy would start improving “within weeks” of the stimulus plan’s being passed. Indeed, Summers touted the “shovel ready” nature of the jobs program as being “timely, targeted, and temporary.” It was supposedly targeted at hiring unemployed workers quickly, within 90 days, and lasting until the private sector was able to get back on its feet.
In March 2009, just five weeks after passing the stimulus, President Obama perceived an upswing and started off a press conference by announcing: “We’re beginning to see signs of progress. . . . This plan’s already saved the jobs of teachers and police officers. It’s creating construction jobs to rebuild roads and bridges.”
Obama declared later, in May, that the massive spending program was “already seeing results” and had created or saved almost 150,000 jobs.
By September 2009, Vice President Biden was gushing: “In my wildest dreams, I never thought [the stimulus] would work this well.”
In April of the following year, the unemployment rate was still at 9.8 percent, but Biden thought that now, for sure, the economy was just about to boom: “Some time in the next couple of months we’re going to be creating between 250,000 jobs a month and 500,000 jobs a month.” The administration touted the summer of 2010 as the “Summer of Recovery.”
But by the end of the next summer, in August 2011, the unemployment rate was still at 9.1 percent. It was no longer possible to claim the stimulus had worked well, so the Obama administration began its strategy of blaming the slow growth and high unemployment on everything but its own policies.
The earthquake in Japan, the debt crisis in Europe, the Arab Spring, and the rise in oil prices have all been blamed for the unprecedentedly slow recovery. But economic growth had already ground to a halt before those events transpired, during the first three months of 2011 — when GDP grew by just 0.1 percent.
If Obama’s economic predictions had come true, he surely would have claimed the stimulus was a success. But with a bad economy, he acts as if he knew that Bush’s policies would keep the economy from growing. Why should anyone trust Obama when he can’t even admit that all these predictions were wrong?