Why do voters of all stripes generally see the economy as anemic? More than 3 million jobs have been created in the last two years, the Dow Jones has jumped from about 8,000 to more than 13,000, and the recession ended almost three years ago. Seems like a lot of good news. So is President Obama getting a bum rap?
The answer depends on your benchmark. If you simply compare today’s economy to where it was in January 2009, the president looks good. And if you believe his claims that the so-called stimulus and the bailouts were necessary to save the economy from collapse, then he looks very good.
Yet Obama still faces an uphill battle this November — because the nonrich aren’t feeling better off. There are several reasons:
* The unemployment rate is still above 8 percent, even though the White House promised it would drop to about 6 percent today if the stimulus was enacted.
* Several million fewer Americans have jobs today than five years ago.
* The poverty rate has jumped to more than 15 percent, with a record number of Americans living below the poverty level of income.
* According to the most recent data, median household income is lower than when the recession began.
* The burden of government spending remains high, and record levels of red ink are a symptom of that bloat in Washington.
* The threat of higher taxes is omnipresent, serving as a Sword of Damocles over the economy’s neck.
* Continued weakness in the housing and financial sectors reminds people that bailouts and intervention have left lots of problems unsolved.
White House staffers argue that all this simply illustrates the economic weakness they inherited. That’s a plausible argument, at least in theory — but many voters aren’t convinced.
There are good reasons for skepticism. You don’t need to be versed in economic statistics to understand that America is enduring a very anemic recovery.
In fact, the nation is suffering its worst postrecession period since the Great Depression. Stat lovers can see this for themselves: The Minneapolis Federal Reserve’s interactive Web site lets anybody compare the post-World War II business cycles, based on employment or GDP.
So there’s a strong case to be made that Obama’s policies have retarded the normal bounce that an economy should experience when coming out of a downturn — and voters sense that the crowd in Washington bears some blame for this dismal situation.
Plus, to the extent that the economy is now seeing some light, it’s unclear whether the White House should get any credit.
For instance:
* The recovery began just as Obama’s stimulus spending ended, thus confirming suspicions that lots of money was wasted as part of a process that hindered the economy’s growth.
* The job numbers only began to improve at the end of 2010, right as Republicans took control of the House and presumably ended Obama’s ability to further shift the nation’s course.
Perhaps most important, voters can see what’s happening in Europe, where welfare states are collapsing thanks to decades of overspending and overtaxation. They have a vague understanding that America is on the same path because of demographics and poorly designed entitlement programs.
But the problem for the White House isn’t just the numbers.; there’s a growing unease that the rules have changed for the worse. Such scandals as Solyndra lead people to suspect that cronyism has replaced capitalism. Record numbers of people using food stamps make people wonder about the long-run consequences of having more and more people riding in the wagon and fewer and fewer people pulling it.
None of these problems started with Obama; many even predate the Bush years. But Obama has expanded these bad policies instead of changing them. He promised hope and change, but he’s doubled down on the failed statist policies of his predecessor.
That’s why the White House isn’t getting much credit for a rising stock market and falling jobless rate. To the extent we’re getting good news, it’s in spite of the folks at the White House.
Daniel J. Mitchell is a Cato Institute senior fellow.