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. …