Joe Biden – along with his amen chorus in the press – keeps insisting that he and President Barack Obama handed Donald Trump a booming economy when they left office in 2016.
“We left a booming economy, ” Biden said during the first presidential debate, “and he caused the recession.” Debate moderator Chris Wallace jumped in to help Biden, adding that job growth was faster in the last three years of Obama’s term than the first three of Trump’s.
One is a flat out lie, the other a clever deception.
After presiding over the worst economic recovery since the Great Depression, Obama and Biden left office with the economy stalling out, leading experts to warn that the nation was facing “secular stagnation.”
Look at the numbers. GDP growth sharply decelerated in 2016, falling from 3.1% the year before down 1.7% in 2016 – the second-worst year under Obama/Biden after the recession ended and the third year of below 2% growth on their watch.
Other indicators were equally distressing. Small business optimism had been on the decline before the November 2016 election. Business investment was stagnant. The rate of growth in blue-collar jobs was falling.
In Obama’s last year, the unemployment rate remained basically unchanged — it was 4.9% in Jan 2016, and 4.7% when Trump took office in Jan. 2017.
Real median family income didn’t budge from August 2015 to November 2016, according to Sentier Research.
The stock market had been flat for more than a year.
Here’s now the New York Times described the economy that Obama and Biden were leaving behind:
“For three quarters in a row, the growth rate of the economy has hovered around a mere 1%. In the last quarter of 2015 and the first quarter of 2016, the economy expanded at feeble annual rates of 0.9% and 0.8%, respectively. The initial reading for the second quarter of this year, released on Friday, was a disappointing 1.2%.”
The Times warned that “the underlying reality of low growth will haunt whoever wins the White House.”
The economy was so tepid when Obama and Biden were packing their bags that economists started to warn of “secular stagnation” – meaning permanent slow growth.
As CBS News put it at the time: “With U.S. economic growth stuck in low gear for several years, it’s leading many economists to worry that the country has entered a prolonged period where any expansion will be weaker than it has been in the past.”
Does any of this sound anything like a booming economy?
But what about the oft-repeated claim – repeated by Chris Wallace during the debate – that “in Obama’s final three years as president more jobs were created. A million and a half more jobs than in the first three years of your presidency.”
Doesn’t this show that the economy was doing better under Obama?
To understand why, some context is needed. Under Obama, job growth in the recovery was unusually slow – slower in fact than every major recession before it.
During the Reagan recovery, for example, annual job growth averaged 2.7%. Under Clinton, it averaged 2.4%. But under Obama, the average annual growth in jobs was just 1.5%.
The only thing that grew fast under Obama was the number of people who’d dropped out of the labor force. That number climbed by almost 15 million.
Nevertheless, by the time Trump took office, the recovery was going on eight years. Under normal circumstances, job growth slows as and expansion gets long in tooth.
And that’s what everybody expected.
At the start of 2017, the Congressional Budget Office released its 10-year economic forecast, which reflects the consensus of economists at the time.
The CBO figured that the number of jobs created between January 2017 and December 2019 would be 2 million.
Actual number: 6.4 million.
The unemployment rate, the CBO predicted, would be at 4.7% – and rising.
Actual number: 3.5%.
Keep in mind that when the CBO made those forecasts, it was under the assumption Obama’s economic policies remained in effect.
What’s more, economists were saying that the economy was at “full employment” by mid-2017.
CNBC, for example, reported in June of that year that “At 4.3%, the unemployment rate has gone well below where anyone expected it and is likely to improve only modestly if at all from here. ‘Our findings suggest that the labor market has already slightly overshot full employment,’ Goldman Sachs economist Daan Struyven said in a report for clients.”
In other words, nobody expected job growth to be anywhere near as strong has turned out to be under Trump.
So, it’s fair to say that the economy under Trump created 4 million more jobs than would have been the case if Obama’s policies had remained in effect.
Biden recently compared Trump to Nazi propagandist Joseph Goebbels, saying “you say the lie long enough, keep repeating it, repeating it, repeating it, it becomes common knowledge.”
When it comes to the economy, it is Biden, not Trump, who is employing Goebbels’ technique. And the mainstream press, including Chris Wallace, are lending him a hand.
— Written by the I&I Editorial Board