Grab your popcorn. Having proclaimed his greatest achievement during his presidency as "saving the world from another Great Depression," we wonder what President Obama will have to say today when he discusses the economy. Following the decline in corporate profits, a manufacturing sector in recession, an auto industry which is shuttering production, minimum wage state job losses rising, and an equity market that is unable to make new highs, what cynical, skeptical, "fiction-peddlers" will he blame today's dismal jobs data on?
President Barack Obama on Friday will deliver a statement "on the economy and new steps to strengthen financial transparency and combat money laundering, corruption, and tax evasion," the White House said.
President Obama is due to speak on the economy at 1205ET…
Alternate Live Feed…
How long before Janet gets another visit from the smoke-and-mirrors-er-in-chief?
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While we are at it, we wonder if Obama will explain why Donald Trump's support is soaring if everything is so awesome…
President Obama’s remarkable interview last week with the New York Times ’s Andrew Ross Sorkin shows why historians are likely to assign Mr. Obama a share of responsibility for the rise of Donald Trump.
To be sure, the president was dealt a tough hand in 2009, and he played it brilliantly at first. His much-criticized Treasury secretary, Timothy Geithner, did what was necessary to pull the U.S. financial system back from the brink. Under intense pressure, the president’s team crafted a package of steps that saved the American automobile industry. The Obama administration’s stimulus package, despite its defects, helped slow a steep economic decline, which at its worst was destroying 800,000 jobs monthly.
Mr. Obama has every right to claim credit for preventing a second Great Depression that would have taken down the entire global economy.
This was a great first act. Unfortunately, there was no Act 2 and, as Mr. Sorkin reports, Mr. Obama knows it. The president laments, for example, “our failure in 2012, 2013, 2014, to initiate a massive infrastructure project” means that “there were folks who we could have helped and put back to work and entire communities that could have prospered that ended up taking a lot longer to recovery.”
The only problem with the president’s lament is its chronology. The failure occurred much earlier, in 2009 and 2010, when Mr. Obama still enjoyed the support of a Democratic-led Congress he needed to move boldly. Despite campaigning for a national infrastructure bank in 2008, he didn’t insist on including it in the 2009 stimulus bill. He didn’t even publicly raise the matter until September 2010, when the midterm election was looming and the chance of enacting new legislation was effectively nil.
This was part of a broader strategic decision to move from his initial focus on averting economic disaster to other concerns—notably, the Affordable Care Act and carbon cap-and-trade legislation. Whatever balance of benefits and opportunity costs the focus on health care may have entailed, the months the House spent in 2009 on an environmental bill that never had a chance in the Senate were a total loss. The exodus of white working-class voters from the Democratic Party contributed to this loss of focus on core economic concerns.
When Republicans regained control of the House in November 2010, the moment for an infrastructure bank and an Act 2 economic plan had passed. The result: an economic recovery that was much slower than it had to be.
President Obama insists—rightly—that the U.S. has done much better than most other advanced economies. Unemployment has come down further than in Europe, and GDP has risen faster.
But most Americans are not comparing the U.S. performance with that of other countries. They are comparing it with previous recoveries in this country, and they are evaluating it in light of their own circumstances. They are painfully aware that their household income is still lower than it was at the end of the Clinton administration and that the jobs many of them have gotten during the recovery pay much less than the jobs they lost during the recession.
People intuit what economists have shown: that the share of overall income growth going to average Americans has been lower in recent years than in any prior economic recovery. They don’t understand why this is happening, but they do expect their leaders to acknowledge it and do something about it.
This is why Mr. Obama is wrong to suggest that his central problem has been an inability to communicate his economic success more effectively. As the old line goes, “Who are you going to believe, me or your own eyes?” The people have given their answer in the form of the Bernie Sanders insurgency and the Republicans’ stunning turn to Donald Trump.
It will fall to President Obama’s Democratic successor to enact the long-deferred Act 2 of the recovery.
via http://ift.tt/1Tsg6uw Tyler Durden