The Recovery That Wasn't: Three and a Half Years Later, White House Officials Are Still Making Wildly Optimistic Comments about the Economy They Mismanaged
Cavanaugh, Tim, Welch, Matt, Mangu-Ward, Katherine, Reason
TWO WEEKS AFTER being sworn in as the 44th president of the United States, President Barack Obama told CNN: "The only measure of my success as president when people look back five years from now or nine years from now is going to be, Did I get this economy fixed?"
By his own criterion, Obama deserves to be judged harshly. Headline unemployment, which the incoming administration projected to top out at 8.o percent as long as its landmark February 2009 stimulus package was passed, has yet to be lower than 8.0 percent. The labor force non-participation rate--the percentage of healthy, working-age Americans who are no longer actively seeking a job and therefore not counted in headline unemployment statistics--has steadily climbed from 34.2 percent (then a two-decade high) in the month before Obama took office to 36.2 percent as of press time.
Meanwhile, administration officials have spent the intervening time claiming, absurdly, that the economy is on the mend. Federal Reserve Bank Chairman Ben Bernanke famously spoke of economic "green shoots" as early as March 2009, while unemployment was zooming northward toward the 10 percent mark. "Welcome to the recovery" Treasury Secretary Timothy Geithner announced in The New York Times more than two years ago. In June of this year, President Obama claimed that "The truth of the matter is that ... we've created 4.3 million jobs over the last ... 27 months; over 800,000 just this year alone. The private sector is doing fine."
That gap between rhetoric and reality shows no signs of closing. Promises of economic interventionists have gone unfulfilled, but the proposals remain the same. On the following pages you will see two timelines. One depressing mountain range depicts the distance between the administration's 8.0 percent unemployment worst-case claim and a reality that has been considerably worse; the other uses as a baseline the once-catastrophic 34.2 percent labor force non-participation rate that now seems to be an unreachable low.
Above and below the lines you will see an illustrated collection of administration quotations about this wonderful recovery we should start enjoying any minute now. It's a humorous if grim reminder that Keynesian remedies don't work as advertised, and that politicians will say anything--no matter how ridiculous--to maintain their grip on power.
The Recovery That Wasn't
January 10, 2009: Incoming Obama administration economic advisers Christina Romer and Jared Bernstein: "Even with the large prototypical [stimulus] package, the unemployment rate in 2010 Q4 is predicted to be approximately 7.0%, which is well below the approximately 8.8% that would result in the absence of a plan."
February 25, 2009: Vice President Joe Biden: "We have an opportunity to get the nation back to work and back on its feet.... And we have to do it right."
April 14, 2009: President Barack Obama: "We are beginning to see glimmers of hope."
August 4, 2009: Boston Globe: "Vice President Joe Biden, put in charge of keeping waste and fraud out of the $787 billion economic stimulus package, declared today 'without reservation' that the recovery plan is working."
September 24, 2009: CNN: "Biden on the Recovery Act: 'If It Fails, I'm Dead'"
October 31, 2009: President Barack Obama: "I am pleased to offer some better news that--while not cause for celebration--is certainly reason to believe that we are moving in the right direction."
December 13, 2009: Director of the National Economic Council Larry Summers: "Today, everybody agrees that the recession is over, and the question is what the pace of the expansion is going to be."
January 27, 2010: President Barack Obama: "And after two years of recession, the economy is growing again."
February 1, 2010: Office of Management and Budget Director Peter Orszag: "We just came through a year in which a second Great Depression was averted."
April 27, 2010: Vice President Joe Biden: "I'm absolutely confident that the policies that we put in place are sending the economy and the American public in the right direction."
May 6, 2010: Federal Reserve Bank of Richmond President Jeffrey M. Lacker: "The most likely scenario is for the recovery to strengthen further in coming months. That's the broad brush view; now I would like to flit in the canvas with some details."
June 17, 2010: Deputy Secretary of Housing and Urban Development Ron Sims: "This summer is sure to be a Summer of Economic Recovery."
July 21, 2010: Federal Reserve Chairman Ben Bernanke: "The economic expansion that began in the middle of last year is proceeding at a moderate pace, supported by stimulative monetary and fiscal policies."
August 2, 2010: Treasury Secretary Tim Geithner: "Welcome to the recovery.... The recession that began in late 2007 was extraordinarily severe, but the actions we took at its height to stimulate the economy helped arrest the freefall, preventing an even deeper collapse and putting the economy on the road to recovery."
November 9, 2010: Vice President Joe Biden: "The initiatives announced today are putting the Recovery Through Retrofit report's recommendations into action--giving American families the tools they need to invest in home energy upgrades."
December 16, 2010: Treasury Secretary Tim Geithner: "Thanks to a comprehensive and careful strategy to address the financial crisis, we are in a much stronger position to address our still very substantial remaining economic challenges."
January 25, 2011: President Barack Obama: "We are poised for progress. Two years after the worst recession most of us have ever known, the stock market has come roaring back. Corporate profits are up. The economy is growing again."
February 17, 2011: Vice President Joe Biden: "Through the Recovery Act, we've proved that the government can move quickly and get the job done and do it right."
March 4, 2011: President Barack Obama: "Our economy has now added 1.5 million private sector jobs over the last year, and that's progress."
May 28, 2011: Vice President Joe Biden: "Because of what we did, the auto industry is rising again. Manufacturing is coming back. And our economy is recovering and it's gaining traction."
July 21, 2011: Obama spokesman Jay Carney: "That's why he is focused every day, he wakes up every day and goes , to sleep every night thinking about the fact that he will not rest, he will not cease in his efforts to grow the economy and create jobs until he knows that every American who's looking for a job can find one. And that will undoubtedly remain true throughout his first term."
August 31, 2011: Former Biden economic advisor Jared Bernstein: "The evidence shows the stimulus (and other stimulative measures, including those of the Fed) worked, but ended too soon, before the private sector was ready to walk on its own. The evidence shows we need to do more of these sorts of policy interventions."
September 13, 2011: National Economic Council Director Gene B. Sperling: "You just have to stay at it. You have to dig and keep digging, and stay at it, and try. Do more of what's working, less of what's not working, but for God's sakes stay at it until we get this recovery at a pace and a momentum that can start making a more serious dent in unemployment and a more positive impact on job creation."
October 18, 2011: Vice President Joe Biden: "The other thing I've heard from my friends who are opposed to this whole jobs bill is that this is just temporary. Well let me tell you: It's not temporary when that 911 call comes in and a woman's being raped and the cop shows up in time to prevent the rape. It's not temporary to that woman."
November 30, 2011: Acting Director of the Office of Management and Budget Jeffrey Zients: "This ['Federal Infrastructure Projects Dashboard'] is the latest result of a series of executive actions President Obama has taken to create jobs because he is adamant that we can't wait for Congress to act to boost job growth and strengthen our economy."
February 6, 2012: White House Press Secretary Jay Carney: "Let's look at some of the facts, which include that a large percentage of that [decline in labor force participation] is due to younger people getting more education, which in the end is an economic positive."
April 26, 2012: Council of Economic Advisers Chairman Alan B. Krueger: "Expanding middle class jobs in manufacturing, especially advanced manufacturing, is part of the President's comprehensive strategy for reversing the middle-class jobs deficit."
May 6, 2012: Vice President Joe Biden: "Look, this goes up and down. But there's been a steady path--26 months straight employment gain, private employment."
June 8, 2012: President Barack Obama: "The private sector is doing fine. Where we're seeing weaknesses in our economy have to do with state and local government."
Illustrated by Terry Colon…
Questia, a part of Gale, Cengage Learning. www.questia.com
Publication information: Article title: The Recovery That Wasn't: Three and a Half Years Later, White House Officials Are Still Making Wildly Optimistic Comments about the Economy They Mismanaged. Contributors: Cavanaugh, Tim - Author, Welch, Matt - Author, Mangu-Ward, Katherine - Author. Magazine title: Reason. Volume: 44. Issue: 5 Publication date: October 2012. Page number: 27+. © 2009 Reason Foundation. COPYRIGHT 2012 Gale Group.