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Obama sputters on the economy, despite his rosy claims
President Obama will take to the road to justify his new economic plans Wednesday based on what aides call the "significant" progress of the past five years, but economic benchmarks during his presidency show a mixed bag of gains and setbacks on pocketbook issues.
Few economists would dispute that the worst is over from the Great Recession, which began in December 2007 and ended in June 2009, six months into Mr. Obama's first term. The unemployment rate, which peaked at 10 percent in October 2009, was 7.6 percent last month. When Mr. Obama was first inaugurated, the jobless rate was 7.8 percent.
But the "U-6" unemployment rate — a measure of discouraged workers who have settled for part-time jobs or given up looking altogether — is slightly worse than when Mr. Obama became president. The U-6 rate in January 2009 was 14.2 percent, and last month it climbed 0.5 percentage points to 14.3 percent. Critics say Mr. Obama's policies bear some of the blame for a sluggish pace compared with other U.S. economic recoveries.
With a clash with congressional Republicans over a threatened government shutdown this fall as a backdrop, Mr. Obama will deliver his major speech on the economy at Knox College in Galesburg, Ill., in an effort to set his terms for battles this fall.
A spokesman for House Speaker John A. Boehner, Ohio Republican, said Tuesday that it was Mr. Obama who appeared to be the one pushing for a shutdown if he does not get what he wants on a spending and borrowing bill to keep the government from running out of money in October.
"At issue is whether the president will again threaten a government shutdown unless Congress provides him higher taxes on small businesses to replace the deficit reduction produced by the automatic spending cuts — sequestration — that are currently in place," Boehner spokesman Brendan Buck said in a blog post.
Senate Minority Leader Mitch Mc-Connell, Kentucky Republican, said on the chamber's floor that Mr. Obama's economic speeches were hurting the cause of bipartisan cooperation on Capitol Hill to deal with the economy.
"If Washington Democrats were really serious about turning the economy around, they'd be working collaboratively with Republicans to do just that, instead of just sitting on the sidelines and waiting to take their cues from the endless political road shows the president cooks up whenever he feels like changing the topic," Mr. McConnell said.
Asked whether the president was heading for a shutdown confrontation with House Republicans, White House press secretary Jay Carney said, "I think that you would have to ask Republicans about what their plan is for investing in America's future, what their plan is for making sure that Americans have health care security."
On Monday, the White House issued veto threats against House Republican appropriations for defense and transportation in fiscal 2014. He said the two bills would result in "draconian" cuts for other programs that Mr. Obama considers priorities, such as early childhood education and job training.
As the two sides prepare for the coming fiscal battles, the president is trying to sell his economic vision based in part on success he has had so far. The administration often points to 40 straight months of private-sector job growth, with 7.2 million jobs added, and deficits that are declining this year for the first time in his presidency.
Mr. Carney gave the administration's assessment of the economy this way: "Strong, but not strong enough; growing, but not growing fast enough; creating jobs, but not creating enough jobs."
Some independent economists offer more unflattering reviews.
Lance Roberts, chief strategist at the Houston-based StreetTalk Advisers money management firm, posted an economic report card for Mr. Obama that gave the president a D on full-time employment.
"What is often overlooked in monthly employment numbers is that the working-age population has been growing faster than total employment," he wrote in a recent analysis.
Mr. Roberts gave the president grades of C-minus on income growth, an F on homeownership and a C on boosting household net worth.
Michael Strain, an economist at the conservative-leaning American Enterprise Institute, said the economy "is certainly better than it was when the president took office."
"It's important for conservatives to acknowledge that things have gotten better across a number of indicators," Mr. Strain said. "Certainly there's been progress, but not nearly enough. The labor market should be public policy No. 1; that's our most immediate problem."
Among the problems that persist are unacceptably high jobless rates, especially for minorities. The unemployment rate for blacks is also worse than it was when Mr. Obama arrived at the White House. In January 2009, the black unemployment rate was 12.7 percent; last month, it was 13.7 percent. Its peak was 16.7 percent in August 2011.
Far more people are on food stamps than when Mr. Obama became president.
Industrial production has risen, but it hasn't reached the level where it was before Mr. Obama took office. Auto sales and the housing industry have shown marked improvement, and the stock market has been setting record highs, spurred by strong corporate earnings and Fed action that has kept interest rates low on bonds.
Curtis Dubay, an economist at the conservative Heritage Foundation, said the economy would have had a stronger rebound if Mr. Obama had not engaged in "anti-business" rhetoric for most of his first term.
"It's basically uncertainty holding the economy back right now," Mr. Dubay said. "He had an anti-business stance for four years, whether it was Wall Street or the casino industry or the health care industry. Then you throw in three sets of policy uncertainty — Obamacare, Dodd-Frank [financial sector regulation] and his refusal to address our looming debt crisis driven by entitlements."
Given those factors, Mr. Dubay said, the economy is likely to "keep muddling along."
"We're growing, but we're growing slowly," he said.
The selection of Galesburg, Ill., as the site of the president's Wednesday's speech is not accidental. As a senator, Mr. Obama gave the commencement address in 2005 to Knox College. The speech is considered to be one of his first to address economic policy.
© Copyright 2014 The Washington Times, LLC. Click here for reprint permission.
About the Author
Dave Boyer is a White House correspondent for The Washington Times. A native of Allentown, Pa., Boyer worked for the Philadelphia Inquirer from 2002 to 2011 and also has covered Congress for the Times. He is a graduate of Penn State University. Boyer can be reached at email@example.com.
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