Thursday, February 9, 2012

On The Subject Of Inheriting


Every time you challenge Democrats on the bad shape of the economy three years (and $5 trillion) into Barack Obama's presidency, you get hit with something like "when Obama came into office, the economy was so bad," etc.

So let's remember exactly how things were when Obama came into office. 

When Obama came into office, the Democrats concluded two years of controlling both the House and Senate for the first time in over a decade.  Until they showed up, everything was quite all right. All hell broke loose after their anti-business policies started kicking in, and things became worse when the Democrat won the White House, too.

When Obama came into office, he didn't show up as a sitting governor.  Instead, he was a voting member of the majority party in the Senate -- the majority party, remember, who created the mess -- and he only made things worse once in the White House.  See for yourself:

...When Obama came into office, the economy had just concluded a year of 0.0% growth.  In Obama's first year, however, the economy shrank by 3.5%.

...When Obama came into office, we had a mess due to the housing market.  However, the worst year for new home sales in U.S. history took place in Obama's third year, not Bush's last.

...When Obama came into office, we concluded Bush's worst year of banks closings under Bush, with 25 banks shuttered in 2008 due to insolvency.  Obama's best year of bank closings (2011) saw 97 banks go under.

...When Obama came into office, the economy had just concluded a year that lost 1.4 million fewer jobs than what the economy lost in Obama's first year.

...When Obama came into office, we had concluded a year (2008) where the unemployment rate was on average 5.8% for the year.  The best UR month on Obama's watch is above eight percent.

When Obama came into office, we were losing a half a million jobs a month.  However, just as the waters in New Orleans started receding before Bush did anything, jobs losses in the U.S. were bound to recede even if Obama did not lift a finger.  The only question was how fast jobs would come back.

A rule in modern economics suggests that the steeper the downturn, the faster the comeback.  But even if you look only at Obama's "good" job months (largely since we elected a do-nothing Congress which by default tied and limited Obama's hands...), the job gains are less than what President Ford -- with an economy and population 35 years smaller than now -- delivered at this time following the steep downturn of the mid-1970s, and it's a drop in the bucket compared to what Reagan gave us after the steep 1981 downturn.

When Obama came into office with an economy of 133.5 million non-farm jobs, his economic team projected that at the end of 2010, we would have 137 million of those jobs if we were to follow Obamanomics.  However, at the start of the current year, we had fewer than 133 million jobs -- which is four million jobs short of what we were supposed to have a year ago!

Finally, when Republican President Warren Harding came into office in early 1921, the economy was in a depression, with GDP (then called GNP) being down almost four times more than the recent downturn.  However, when Harding concluded his third year in office after pushing through steep tax cuts, the unemployment rate was lower than the pre-depression levels despite the fact that more people came into the workforce.  Now, by contrast, despite millions giving up on looking for jobs, the unemployment rate is still higher than "when Obama came into office."

In brief, things might not have been exactly hunky-dory when we got Obama...but they're a heck of a lot worse now that we have him.

Just sayin'...

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