I&I Editorial
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?
No.
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
A mutt can whisper “tax break” to the populace, and naturally, the economy makes a temp gain. Every major tax break has resulted in the same. The gain died at around 3yrs. Our econ numbers were way down before the virus hit.
UI numbers are different now. There is actually nearly 4% fewer workers now. Black and latino employment in fact, lower now, not higher. That was before the virus. 18yo students arent counted anymore, and neither are early retirees.
Not sure where you are getting your numbers. Here’s the annual growth rate after the Reagan tax cuts: 1983 4.6%, 1984 7.2%, 1985 4.2%, 1986 3.5%, 1987 3.5%, 1988 4.2%, 1989 3.7%. That’s considerably more than three years. Also, just before the lockdowns, the economy was on track for nearly 3% growth in Q1, according to the Atlanta Fed: https://web.archive.org/web/20200305181947/https://www.frbatlanta.org/cqer/research/gdpnow. Don’t have any idea where the 4% fewer workers number comes from. The civilian labor force increased by nearly 5 million from Jan. 2017 to Jan. 2019. Also, Bureau of Labor Statistics show that from Jan 2017 to Jan 2019, the number of blacks employed increased by 1.1 million.
Biden blamed the Bush administration for the recession. We all know that Democratic Senator Dodd, Democratic Rep. Barney Frank, and their Dem oi cratic colleagues failed to initiate needed reforms for Fannie Mae, Freddie Mac, lending institutions, and bundlers. The Bush administration tried 19 times to prevent the real estate crash and crash of those financial institutions associated with the crash.
The financial readjustments instituted to start a recovery occurred before the Obama administration’s economic initiatives took place. A case could be made that Obama’s policies helped little or made things worse and the election of Republicans to Congressional majorities in 2010 faciltated the meandering recovery.
conveniently no mention of the exploding deficits and debt under Trump which is how he goosed the economy short term- the price that future generations will pay for today’s fat cats
Boring. At least come up with something that makes sense. The exploding deficits have been a feature for some time now. Right from when Bush approved TARP and Obama just kept the bonus as a feature in all his budgets. This is why we don’t have regular order BTW..
At least in this moment, the budget busting is getting dispersed to the American people, but from what I can see, it was BIPARTISAN. Clinton’s might have been bigger, I am sure Bidens will be.
Great article. I am amazed that Biden can keep a straight face and make those claims, when the national debt when they took office was $10 Trillion, and when they left it was just under $20 Trillion. More debt was added under Obama/Biden than all other presidents since George Washington combined.
According to CNN BUSINESS on October 19, 2016: ‘By January 2009, the United States had accumulated $10.6 trillion in debt. That’s the net amount the country had borrowed from Washington through the Bush years.The gross national debt now stands at $19.7 trillion. That’s an increase of $9.1 trillion — not quite a doubling, but pretty close. ‘https://www.businessinsider.com/trump-national-debt-deficit-compared-to-obama-bush-clinton-2019-2
Yes, total US debt increased by $8.7 trillion over the eight years of the Obama presidency. As of the 2nd quarter of 2020, total US debt has increased by another $6.6 trillion over 3.25 years of Trump’s presidency.
Obama inherited Bush’s last budget year’s $1.4 trillion deficit and left President Trump a $0.7 trillion deficit. The FY 2020 deficit is expected to be over $3 trillion, more than double the all-time high set in Bush’s last budget year.
Well its funny how the rightwing “budget” hawks gave Hillary ZERO credit for helping Bill actually lower the deficit, but trumpy can blow it up and nobody cares. Bush2 invades the wrong country and nobody on the right cares, but 4 dead in Benghazi is all the rage.
Hypocritical much?
True that the economy was not “booming” when President Obama and VP Biden left office. Growing, yes. Booming, no.
Correction: The unemployment rate in January 2017 was 4.7%, not 4.8%
Job growth in the 12 months ending January 2017 was 2,457,000 jobs added. Job growth in the prior two years was 2.6 million and 3.0 million. Under President Trump, for 12 months ending:
January 2018 = + 2,045,000 jobs
January 2019 = + 2462,000 jobs
January 2020 = +2,078,000
Since President Trump took office through September = a “Loss” of 3.9 million jobs
Rather than use a NY Times article, let’s look at the BEA data on real GDP growth at the end of Obama’s presidency:
1st quarter 2016 = + 2.3%
2nd quarter 2016 = + 1.3%
3rd quarter 2016 = + 2.2%
4th quarter 2016 = + 2.5%
1st quarter 2017 = + 2.3%
Under President Trump, real GDP growth for the four quarters ending
1st quarter 2018 = +3.1%
1st quarter 2019 = +2.3%
1st quarter 2020 = +0.3%
Since President Trump took office, average annual real GDP growth = “minus” 1.2%
Republican presidents are just really, really unlucky. They all have a recession start on their watch. Ten of the last eleven recessions started with a Republican in the White House. The last Republican who didn’t have a recession start on his watch was James Garfield, who only served six months in 1881 before he was assassinated. Consistently unlucky. I mean, it couldn’t have anything to do with the policies they enacted.
This “bad luck” has resulted in much stronger job and real GDP growth under Democratic presidents. Since the Great Depression, the only Republican president who didn’t see a net increase in the unemployment rate on his watch was Ronald Reagan. No Democratic president saw a net increase of the unemployment rate on his watch. The closest was Jimmy Carter, who ended with the same rate he started. On the other hand, job growth was higher under Carter than under Reagan and Carter’s real GDP growth of 3.4% was only slightly below Reagan’s 3.4%.
So the editors are correct that the economy wasn’t “booming” at the end of Obama/Biden, but wrong or misleading on everything else.
Economics is described as the ‘dismal science’ and not without reason, for liars figure and figures lie. So do politicians, and both Trump and Biden are part-and-parcel of that common rabble. It is undeniable that the Obama recovery from the Great Recession that Biden touts so enthusiastically was historically slow and weak, so lame that Obamaphiles coined the term ‘secular stagnation’ to explain the weakness, as if the Obama/Biden administration’s tax and regulatory structure and other policies had nothing to do with it, as if that was the ‘new normal’, another term they invented to explain its fanciful inevitability.
If you look at the a graph of real GDP and unemployment from March 2009 through December 2019, the trend line across the two presidencies are indistinguishable. When it comes to the economy, presidents don’t really matter.
If the economy had been “booming” in 2016, President Trump would not have won the election.