Don’t look now, but President Obama’s economic legacy may already have been written. Now in its sixth year, his administration continues to wait in vain for a recovery. Even if the recovery arrives, it may be too late for it to matter.
Mr. Obama’s economy has performed worse than any president’s since Franklin D. Roosevelt. Simply averaging real gross domestic product (GDP) growth over a president’s tenure, Mr. Obama’s is the lowest by almost a full percentage point.
FDR’s (from 1933-40, excluding the war years) averaged 6.2 percent; Harry Truman (1947-52) averaged 3.8 percent; Dwight Eisenhower’s (1953-60) was 3 percent; John F. Kennedy-Lyndon Johnson, (1961-68), 5 percent; Richard Nixon-Gerald Ford (1969-76), 2.8 percent; Jimmy Carter (1977-80), 3.3 percent; Ronald Reagan (1981-88), 3.5 percent; George H.W. Bush (1989-92), 2.3 percent; Bill Clinton (1993-2000), 3.9 percent; and George W. Bush (2001-08), 2.1 percent. In contrast, Mr. Obama from 2009 to 2013 averaged 1.25 percent.
To catch George W. Bush, Mr. Obama would have to average real economic growth of 3.55 percent over each of the next three years. That would mean a 25 percent increase above his best year’s growth — 2.8 percent in 2012. That’s a tall order, considering last year’s growth was just 1.9 percent, and this year’s first quarter came in at a negative 1 percent.
After 5 years in office, the defense that he inherited a poor economy no longer resonates with most Americans. Looking at the earlier presidents, receiving a troubled economy is not unique — FDR and Reagan did — and others, such as George W. Bush with September 11, experienced unavoidable events that hit the economy hard.
Uneventful economies are the exception — only Kennedy-Johnson and Mr. Clinton had economies without a negative economic growth year. The key is how presidents responded to the hits.
Mr. Obama’s economy has also had some substantial monetary and fiscal policy boosts. The Federal Reserve has held interest rates at rock-bottom levels for an unprecedentedly long time. Fiscally, federal spending averaged 22.8 percent of GDP during the president’s first five years — well above its 20.5 percent average over the previous 40 years — and debt held by the public more than doubled from $5.8 trillion to $12 trillion between 2008 and 2013.
Regardless of the factors that shape a president’s economic performance, at some point public opinion settles on a verdict. Recent polls indicate that for Mr. Obama, it may have already happened. According to a nationwide AP-GfK poll conducted in May, the economy was the nation’s top issue, with 86 percent saying it was extremely or very important, with health care placing second. Mr. Obama’s economic performance rating was just 39 percent approval to 59 percent disapproval, with 65 percent rating today’s economy “poor.” Only 29 percent thought the economy would improve over the next year, while 36 percent thought it would worsen.
Succinctly, Mr. Obama received a decidedly negative rating on the nation’s top concern, and expectations for improvement were low. The economy may already be in a hole from which Mr. Obama cannot extricate it. How tough a task improvement will be is clear: If, over the next three years, the economy equaled Mr. Obama’s best showing of 2.8 percent in 2012, his eight-year real growth average would still be just slightly better than 1.8 percent.
Changing people’s minds over the next three years may be no less difficult than changing the numbers. Opinions once formed are hard to change.
The time in which Mr. Obama could change his economic story may be shorter than even the 2 years remaining in his presidency. Should Republicans take control of Congress in November — an outcome only made more likely by his continued negative economic ratings — this could cloud the president’s claim to an economic recovery, even should it occur in his last two years.
An example of disputed credit for economic improvement occurred during the last six years of the Clinton presidency, following Republicans’ winning Congress in 1994. Mr. Clinton’s average economic growth before Republicans won was 3.4 percent. After Republicans took Congress, growth for the remainder of the Clinton presidency was 4.1 percent.
Republicans’ claim for economic credit lay in their immediate and sustained push to reduce federal spending, which fell from 20.5 percent of GDP in 1994 to 17.6 percent in 2000 — which Mr. Clinton resisted.
Mr. Obama will likely face a similar push for spending reductions and would certainly face the same Republican claim for credit should the economy turn around in the next two years. If anything, Mr. Obama would find himself in an even tougher position than Mr. Clinton, who had just two years of a respectable 3.4 percent average growth rate before Republicans took full control of Congress. In contrast, should the GOP win Congress in November election, Mr. Obama will have had six years when he and Democrats controlled the White House and at least one house of Congress.
By any measure, time is running short for Mr. Obama to benefit from an economic recovery, and the odds of a turnaround are growing longer by the day.