Are You Better Off Than You Were Four Years Ago? Yes!
By Bob Cesca: In a speech filled with misleading statements and nostalgic lines about how wonderful life used to be before President Obama was inaugurated, the single-most ridiculous line from Mitt Romney’s acceptance speech Thursday night was this:
“…Every president since the Great Depression who came before the American people asking for a second term could look back at the last four years and say with satisfaction, ‘You are better off than you were four years ago.’ Except Jimmy Carter. And except this president… This president cannot tell us that you’re better off today than when he took office.”
He absolutely can, and he should!
Yes, I agree that there are still people who are hurting. Unemployment remains unacceptably high, and, ultimately, the depth of the Great Recession is still playing itself out in the difficult task of mitigating it and returning the economy to a place of steady prosperity.
But when it comes to the question of whether we’re better off, there’s no doubt that everyone is better off now than we were when, for example, the economy was collapsing with no end in sight; when we were engaged in two wars with no end in sight; when healthcare was less affordable; when mutual funds, IRAs and 401(k) retirement plans were losing value as the stock market crashed; and so forth. More of this presently.
By the way, this is a risky question for Romney since a Republican president with a strikingly similar economic agenda was in office four years ago, and he was navigating his way around a worsening economic freefall. Why would Romney even dare to bring this up? I’m sure the question the president and the Democrats will be asking this coming week in Charlotte is whether we should continue the policies that ended the disaster and sparked an economic recovery, or whether we should revert back to the policies that were in place prior to the recession — policies that John McCain and Sarah Palin were proposing in 2008 and which Mitt Romney and Paul Ryan are proposing today. On one hand we have an administration that’s responsible for policies that have proven to be effective given the dire circumstances, and on the other hand we’re hearing about Republican boilerplate policies that absolutely failed.
So how effective were the policies of the Obama administration?
Insofar as the Republicans have blamed the president for everything that’s bad, it’s only fair then to credit him for the things that have significantly improved, and many of the following things are, in fact, a direct result of the president’s actions.
1. Several weeks after the president was inaugurated and before any of his policies had taken effect, the Dow Jones Industrial Average reached its bottom: 6,626. This was the low point in a slide that began as far back as October 2007 when the Dow surpassed 14,000. From that day onward, it dropped. Since its low point and under the watch of the Obama administration, however, the Dow has climbed back to 13,090 as of Friday. That’s a massive recovery in just three-and-a-half years, and this resurgence began in earnest just after the president signed the dreaded stimulus, which pumped over $700 billion back into the economy when no one else, from consumers to corporations, were prepared to do the same.
2. When the president took office, the gross domestic product — the pulse of the American economy — was contracting by 8%. In other words, the last time the economy was shrinking to this degree was 1947. In early 2009, no one knew how deep the contraction was, and we’re still discovering the true depth of the crisis. Regardless, by the third quarter of 2009, the economy was growing again. To this day, it continues to grow by around 1-2% per quarter.
3. The economy hemorrhaged 800,000 jobs during the month the president took office. 700,000 the month after. 750,000 in March of 2009. The American Recovery and Reinvestment Act (the stimulus) was signed in that same month, March, and following the measure, fewer and fewer Americans were fired until November 2009 when the private sector began to add new jobs for the first time since December 2007. In terms of new job creation, we’re actually better off now than we were nearly five years ago. Obviously, more jobs need to be added, but we also have to examine why job creation isn’t more robust. Primarily, corporations are inexplicably sitting on record cash assets. $2 trillion, in fact, according to the Wall Street Journal — the highest level of cash assets since 1959. Furthermore, public/government sector jobs at the federal, state and local level have dropped off for the first time in recent history. Experts assert that this has hurt job growth and the unemployment rate.
These are three of the biggest indicators of economic health in America. But what about the deficit and the debt — the crazy scary numbers the Republicans were screeching about last week?
4. According to the CBO, the president inherited a 2009 deficit of $1.2 trillion from President Bush’s final spending request back in 2008. I’m not talking about 2009 spending authorized by President Obama but fiscal year 2009 spending requested by Bush, which somehow President Obama has become responsible for in the eyes of many Republicans. Actually, the Obama administration only added an additional $400 billion to the deficit for the remainder of 2009. That’s still a big chunk of money, but bear in mind the stimulus and other measures that were necessary as a means of breathing life into the economy when no one else would. Add to that a seriously constricted level of tax revenue due to layoffs and reduced incomes. By the end of the president’s first year, the deficit was $1.4 trillion. Huge by ordinary standards, but that economic era and the colossal recession was hardly ordinary. Since then, the deficit has been reduced nearly every year (the deficit increased by $6 billion in 2011 from $1.293 trillion to $1.299 trillion, then dropped to $1.1 trillion for 2012). Fact: the president has reduced the deficit from $1.4 trillion to a projected $977 billion in the last fiscal year of his first term, 2013. $500 billion in total deficit reduction in four years. While I personally would have preferred more spending given the depth of the recession, from the perspective of deficit reduction, this can be considered a considerable achievement and far from the big spending, big government myth the Republicans have created. Meanwhile, the national debt continues to grow, but the year-over-year growth of the debt has slowed from 15% in the president’s first year to 4% in his third year. Likewise, the year-over-year growth in the size of government is the lowest since the 1950s.
One million unemployed Americans found jobs in the first six months of 2012 alone. Inflation is 1.4% — a full point below its all-time average and four points below its 5.6% rate in July, 2008. Home sales are up. Home prices are up. Consumer debt is down. Income tax rates remain at an all-time low. The Medicare prescription donut-hole is closing, with 5.2 million seniors and people with disabilities having saved $4 billion on prescription drug costs because of the evil, evil Affordable Care Act. Preventative medicine is now fully covered by both Medicare and private insurance without deductibles or coinsurance. Millions of Americans in their 20s are now insured under their parents’ health insurance. Medicaid and SCHIP have been expanded, making it easier for struggling families to get healthcare. Women are closer than ever to paycheck equality. The war in Iraq is over. Bin Laden was hunted down and killed.
Are you better off than you were four years ago? From a national perspective — from the perspective of life becoming a little bit easier and the future a lot brighter, the answer again is a resounding yes.
Adding… By way of a post script, I’d like to add that several Obama campaign surrogates turned up on the Sunday shows and actually avoided the obvious answer to this question. Clearly they were worried that answering “yes” would appear insensitive to the Americans who are still struggling. The governor of Maryland, Martin O’Malley — a Democratic supporter of the president — actually answered, “No.” What the hell? Astonishingly self-defeating and weak. Perhaps a response to the effect of, “Without a doubt the nation is significantly better off than it was four years ago, and it will continue to get better and stronger when the president is re-elected,” would completely thread the politically sensitive needle without giving Romney a major win on this too-important question. But to run away from the answer undermines the entire basis for the campaign. I suspect Governor O’Malley will end up in numerous Romney ads. Unfortunately and stupidly.