President Obama has talked about the economy for so long you can be forgiven if you think he was first elected during the Panic of 1907. Many voters, no doubt, have learned to tune him out. But after six years in office, Obama finally has an upbeat story on the economy to tell, which could give Democrats at risk of losing the Senate a desperately needed edge in the upcoming midterm elections.
Despite infinitesimal odds of Congress passing any of his big economic ideas, Obama continues to barnstorm the nation calling for more infrastructure spending, a higher minimum wage and other kinds of stimulus. His economic speeches also include a lengthy list of bullet points touting his accomplishments on the economy — something that was in very short supply until recently.
Here are seven of Obama’s major claims on the economy, with a bit of fact-checking and analysis:
“Our businesses have now created nearly 10 million new jobs over the past 52 months.” That’s true, but why the 52-month cutoff? Because that starts the count at the low point for employment in early 2010, making the gain since the bottom as large as possible. If you start the count from the first month Obama took office, businesses have created only 4.8 million jobs. And if you count from the high point prior to the recession, the economy has only added 415,000 jobs, on net, during the past six-and-a-half years. Still, Obama obviously started his presidency in a huge hole, and, so far this year, employers have added an average of 231,000 new jobs each month, a healthy pace of growth.
“Manufacturing is adding more jobs than any time since the 1990s.” This uptick in hiring Obama likes to talk about conceals a broader trendline that’s much more discouraging. Manufacturing employment was steady in the 1990s but began to fall like a stone starting around 2000. The number of manufacturing jobs remains about 1.9 million less than the tally right before the recession, and 5.5. million jobs below the peak level in 1998. Manufacturing is in the middle of a long transition toward more automated and tech-driven production, which has completely changed the job requirements and nature of work in this important industry.
“Housing is rebounding.” True, but housing still has a long way to go. Home prices, on average, have regained less than half the value lost during the housing bust. Many first-time home buyers remain shut out of the market, and the wealth of the typical family is still about 40% lower than it was before the recession. The housing recovery needs to pick up or it could threaten the whole economy.
“Our auto industry is booming.” Auto sales have been stronger than many analysts expected and are now close to peak levels from before the recession. Part of that improvement comes from car buyers needing to replace aging, unreliable vehicles, but the sales gain also stems from generous credit and low interest rates available to many buyers — something that’s not yet common in the market for homes.
“There are families with health insurance who didn’t have it before.” Indeed there are, and early surveys seem to show the Affordable Care Act, aka Obamacare, is fulfilling its goal of expanding health insurance to several million additional people. What remains to be seen is whether Obamacare will do anything to reduce medical costs and help the nation deal with an expected explosion in healthcare spending as the baby boomers retire. And many Americans deeply opposed to Obamacare may never like it, no matter what.
“For the first time in nearly 20 years, we produce more oil here at home than we buy from abroad.” Obama likes to take credit for the U.S. energy boom, but new drilling technology such as hydrofracking is really responsible. Obama has done virtually nothing in terms of policy to help boost oil production.
“By almost every measure, we are better off now than we were when I took office.” Almost is the key word here. Median household income, adjusted for inflation, is still about 5% lower than it was at the start of 2009. Since there are more jobs now, that means a lot of people are earning less money than they did before the recession, which clearly puts a strain on household finances. That could still be the case when Obama leaves Washington in 2017.
Obama critics, of course, argue that the pace of recovery during the past six years has been far too slow and we ought to be much better off than we are now. If Obama’s approval ratings are any indication, voters agree, since the president’s popularity is near the low point hit during the disastrous rollout of Obamacare last year. Job gains don’t seem to be helping Obama’s ratings as much as job losses and other problems hurt it.
Still, Obama now has some facts he can point to as evidence of a recovery, which is much better than merely promising it will arrive soon. That may be the best economic news Obama has delivered yet, and it can’t come a moment too soon for his struggling Democratic party.
Rick Newman’s latest book is Rebounders: How Winners Pivot From Setback To Success. Follow him on Twitter: @rickjnewman.