Republicans can’t wish away Obama’s economic triumph
President Obama is seeing a massive economic revival. Here’s how he did it with zero help from Republicans … and why he’ll receive even less thanks from the Party of No.
“Fabulous news! Big jobs numbers — more people being put to work.”
“A strong report any way you slice it.”
“Party like its 1999? … Today’s jobs report first time since late 90’s we’ve had five straight months of 200,000+ jobs created.”
These are just a few of the euphoric tweets that were sent out by analysts in the minutes and hours following June’s stellar jobs report. A falling unemployment rate, continued growth and a slight rise in wages capped a previous four-month streak in solid jobs gains and was heralded by observers as unambiguous evidence that the Great Recession is finally on its way out.
In short, the numbers are in — and they’re the strongest sign yet that the U.S. economy may be about to achieve lift-off.
But the Republican response to the brightening economic news was the same it’s always been. In the face of strong hiring numbers, the Republican leaders issued statements downplaying any good news while condemning “the Obama economy,” as they do every month.
It’s a strategy that paid off politically before, and it was an easy game for Republicans to play while the recession this president inherited was still claiming hundreds of thousands of jobs each month. But don’t expect it to work for much longer as the good news continues to pile up.
To wit: last Thursday, July 3, the Bureau of Labor Statistics released its monthly report showing a creation of 288,000 jobs last June. The strength of the report was surprising many analysts, who had predicted a good-but-not-great report somewhere in the neighborhood of 215,000 jobs that month.
As a consequence, the unemployment rate in America has fallen to 6.1 percent, the lowest level it has been since December 2008. The unemployment rate is calculated by the Bureau as being the percentage of Americans in the workforce who have not found full-time employment. Because of this metric, the unemployment rate can sometimes be misleading, with unemployment rates officially declining even when no jobs are created for the month, simply because many people have given up looking for work and therefore are technically no longer counted as unemployed.
But there was none of this in June’s jobs report. The unemployment rate has fallen for all of the right reasons, as 288,000 people were hired and tens of thousands more people began to look for jobs and joined or re-joined the workforce — a sign of economic optimism about not just their individual prospects but also the larger economic picture.
Throw in the fact that this report came with upward revisions in the May and April reports, and the good news is even more impressive. The employment gains for the month of May were revised upward from 217,000 to 224,000. April’s numbers saw a 22,000 spike, resulting in a stellar final projection of 304,000 jobs for that month alone.
And the gains were broad-based, not reliant on any particular sector. Retail trade, food/drinking services, financial, health care and manufacturing positions all saw bumps in employment approaching the tens of thousands. Business services led the way, with 67,000 jobs created just in this month … 14,000 more than the industry’s 12-month average!
Three months. 816,000 jobs created at an accelerating pace. There is nothing in these reports for the President’s eternal critics to latch onto, though Fox News is always up for the challenge. Crunching the numbers, a panel of commentators on the network pointed out that the falling unemployment rate didn’t include the people who had left the workforce, therefore allowing themselves to bemoan a higher 12.5 percent unemployment rate while ignoring a positive trend that’s both obvious and powerful.
The stock market surged on the news, with the Dow Jones Industrial Average passing the historic 17,000 mark as the improving economic outlook was dissected by investors. And this historic bull market, by the way, reflects another bright spot for Obama’s economic record. In the time that this president has been in office, the Dow has surged from 7,949 points to 17,068 as of last week. That’s a 114 percent gain in under six years.
Other markets and economic indicators tell a similar story. The S&P 500 is up a sterling 146 percent since President Obama took the oath of office. The housing market has gradually rebounded. Consumer spending and confidence is up. And with the stock market at historic highs, millions of baby boomers with their retirement savings tied to the market can retire over the next few months and years with the safety and comfort that fattened 401k’s can provide. It’s been under-reported in the news. But for the 10,000 baby boomers retiring each day, the stock market boom under Obama is a huge deal.
“It’s clear,” John Boehner said in February of 2009, “that the markets aren’t reacting very positively to the President’s agenda.” Once again, it was easy in those dark days for him to point to the signs of economic devastation everywhere and pretend that they had sprung up on the day Barack Obama was inaugurated. But you can be sure that no Republicans are mentioning the record-breaking stock markets as they rail against the job-killing side effects of Obamacare and the rest of the President’s initiatives that they keep insisting will destroy the economy.
As economic indicators have shifted from deadly to depressing to middling to encouraging and then to downright rosy, a lot of people might think we’re in uncharted, albeit sunnier, waters. But the truth is, we’ve seen this movie before.
In 1993 when the young President Clinton sent his budget plan to Congress, he chose to go big rather than go home. His 1993 budget, unofficially the 1993 Deficit Reduction Act, sought to get America’s fiscal house in order by raising taxes on the wealthiest America’s while also slashing spending on some domestic programs. Of course, Republicans in both houses fought his measure to the hilt, just as they would fight in 2012 when President Obama was determined to let the Bush tax cuts expire and allow taxes to be raised on the richest Americans.
It was common in the days leading up to the 1993 vote to see Republican senators and congressmen reciting a long list of economic dangers that the mixture of tax hikes and spending cuts posed. In a series of speeches and press conferences, Republicans warned again and again of the catastrophic economic consequences the budget would bring, and predicted that tax increases on America’s wealthiest would hamstring small business and gut the economy.
“The point is,” said Senator Chuck Grassley, R-Iowa, “if you’re voting for this package, you’re voting for deep doo-doo.”
His remarks summed up the position of the entire Republican caucus in both houses, which presented a front that was 100 percent united against Clinton’s plan. When it came up for a vote in August, not a single Republican in either chamber backed the 1993 budget — and most took the opportunity to predict not only economic calamity, but also electoral carnage for Democrats who supported Clinton.
“Bye-bye, Marjorie,” they jeered on the House floor as Representative Marjorie Margolies-Mezvinsky of Pennsylvania cast the deciding vote in favor of Clinton’s budget. With Marjorie’s vote, the bill was guaranteed to become law, and a sweeping budget overhaul universally derided by Republicans as nothing more than an economic land mine would go into effect.
So what happened?
As it happened, economic doomsday wasn’t in store for Americans under Clinton’s watch. But an unprecedented period of growth and prosperity was. The economy grew for 116 consecutive months, the longest growth streak in history. Twenty-two million jobs were added, seven million people were lifted out of poverty, the deficit was cut by $500 billion in just five years and unemployment by January 1999 was at a 30-year low of four percent.
As the ranks of the middle class swelled, the rising economic tide lifted all boats. From unemployment to family median incomes to inflation to interest rates, what should be down was falling in Bill Clinton’s America, while the indicators that should be up—employment, consumer confidence, the stock markets—were climbing ever higher. In particular, the stock markets would grow by an average of 17 percent per year, enough to more than triple by the time Clinton left office.
So what can we take away from this history that keeps repeating itself? Two lessons jump out for me. First, when Republicans are issuing dire warnings about impending economic disaster thanks to a Democratic president, it’s a great time to invest in the stock market. We’re talking double or triple your money in just a few years.
Secondly, it’s time to stop taking these prophets of disaster seriously. After sixteen years of being official policy under Ronald Reagan and George W. Bush, supply side economics has been given a fair trial. It’s led to soaring inequality and exploding deficits, and in George Bush’s case, nothing to show for this but near-total economic devastation by the end of his presidency.
But in the face of all of this compelling evidence against these agents of trickle-down, we still shouldn’t expect any mea culpas from the people who have been proved wrong year after year, and administration after administration.
Here’s a thought experiment for you: Try to imagine the exact degree that the economy would have to improve under Obama before conservative economists and Republican leaders bring themselves to openly consider the idea that the medicine he prescribed is working.
You know the answer. No matter how many jobs are created this July, whether it’s 200k or a million, no number could be eye-popping enough to change or even soften the far right’s view of this president, or outweigh the emotional investment that conservative economists have made in the theory of trickle-down economics.
“We’re glad that some inevitable economic revival is finally taking place,” these people might say if pressed to acknowledge any sort of good news. “But too many people are still suffering economically every day in Barack Obama’s economy. We wish that he would just embrace free market principles and abandon class warfare so that this nation can finally enjoy a real recovery.”
A real recovery … from the lash of Bush economics. It’s been true since the day he was sworn in to face a new kind of opposition: the harshest critics of the President’s handling of the fire have been the arsonists themselves.
These people would make no mention of the failure of any of their warnings of economic collapse or rampant interest rates to actually come true. They would make no mention of the 22 million jobs that were created after Clinton raised taxes on the richest among us, as opposed to the 1.5 million net increase that was seen in all eight years under Bush. Most of all, there would be no recognition of the fact that the economic abyss that Obama has steered us away from was itself the result of an eight-year right-wing economic experiment.
No, Paul Ryan, Mitch McConnell, John Boehner and the rest of their crew have their script down pat and they’re going to stick to it. Meanwhile, the guy who was dealt a horrific hand on his way in has really begun to turn things around. In the thirty months left in his presidency, anywhere from four to seven million jobs might be created if the current trends hold. Those aren’t quite Clinton numbers. But they’re also a world away from the Bush nadir — and that’s something for which millions of Americans and their families can be profoundly grateful.
William Dahl is a recent graduate of The College of William and Mary, where he majored in Government and studied abroad in La Plata, Argentina. He has worked for community foundations in Argentina and Miami dedicated to community engagement and prosecution for human rights abuses. A native Virginian, he moved to Baltimore in 2013 to join a financial research firm, where he enjoys being able to write on the side.