President Obama continues to receive much scorn about, "the economy". Exactly what do those who vilify want to see without appreciation for where the economy is today? Maybe, I should ask, exactly what did they wish to see within a few months of his inauguration? economy's
Obviously they expected to see unemployment drop to 4% (Romney's quoted claim) with a few weeks of his election. They must have expected such with no logical reason for their flawed mindset.
JobsA look back at CNN Money a mere 11 days before then President Obama took office.
The Obama expericne through December 2012. We are unable to find a more up-to-date chart within the time parameters available before publishing. It should be noted that the inclined shown below would have continued on an upward path. Click the following chart for an more interactive display with additional critical unemployment related data and explanations.
If you clicked the chart above and viewed the interactive display, you saw the impact of strategic and proactive efforts to lower the unemployment rate. President Obama's political opponents and people who do not appear anxious for a lowered unemployment rate will use the 8 % Stimulus related figures as a "promised from President Obama". President Obama never promised an 8 % unemployment rate as a (possible) result of the stimulus. His economic advisers postulated that if given a stimulus they would have opportunity to lower unemployment to 8 %. The shame of it all, is the trimmed stimulus request from $1.2 trillion to $750 to $830 million fell shy of administrations expectations. Is it possible to imagine their planning may have been focused don the $1.2 trillion and the resultant $830 million has taken the unemployment rate as low as it will go without another stimulus. Paul Krugman, Robert Reich and others forcefully stated that the lowered stimulus was "not enough". While the impact of the stimulus is clearly illustrated via the link, it should be clear Republican obstruction and trimming of the requests negatively impacted its full effect.
Is it possible after 6 full years of sub-prime housing market abuses could have been turned around within one calendar quarter? For that matter, is it really practical to have expected anything more than very high numbers of foreclosures and a severely unsettled banking industry?
Housing and area of real concern and the area manipulated so overwhelmingly during the sub-prime "Bubble" (2001 - 2007).
VOX eu Dot Org published:
" The housing market and the case for higher inflation targets in the US and the Eurozone"
US pending home sales index, 2001-2012
(NOTE: The chart and following verbiage are posted for point of reference on the cyclical and unstable housing market in the US. Rather than attempt to defend an area of very slow improvement, we think it relevant to a gain point to this market as the very market manipulated to the point of worldwide economic catastrophe (along with other poor financial and economic decisions in Europe). The verbiage bellow was written for a particular esoteric audience, hence reference to the "S&P/Case-Shiller home price indices".
Authors of the article did not express political commentary.
- The evolution of the S&P/Case-Shiller home price indices, shown Figure 1, vividly illustrates the fact that real estate deflation is not over.
- After a brief and ultimately illusory recovery in 2010, the deflationary trend is back.
- The pending home sale index confirms sales remain in hibernation (see Figure 2).
Delaying housing purchases boosts the incentive to delay
The option-value approach to durable goods implies that housing price deflation and low sales are intertwined. When the odds for housing deflation remain high, households have the incentive to delay purchase, even if they have good access to financing. The zero bound on the nominal interest rate implies that low interest rates may not offset the exposure to capital losses due to expected housing deflation. This configuration may lead to a housing market trap – households engage in a waiting game, delay their purchase, and thereby induce yet faster housing deflation, probably provoking other households to delay their purchase. This in turn pushes more houses to be ‘underwater’, leading to more foreclosures, more fire sales, and so forth.
The social cost of degrading neighbourhoods, where deeper foreclosures reduce the value of other houses, is by now visible in the worst affected states in the US. These dynamics validate the notion of ‘fire-sale externalities’, as well as Fisher’s observation “liquidation does not really liquidate but actually aggravates the debts, and the depression grows worse instead of better.” The laissez faire bankruptcy way of dealing with housing adjustment turned out to be highly inefficient in the US residential market.
This leaves Fisher’s ‘reflation’ option as a viable policy to shorten the painful debt deflation in the US. The logic is simple – moderate inflation for several years would terminate at an earlier juncture the buyer’s ‘waiting game’ in the housing market. Once the deflationary dynamics end, the pent-up demand for houses will be released. The timing game will switch from waiting to ‘rush to buy’. Chances are that this will signal the end of the housing slump, and will invigorate construction.
For the US, there is strong statistical evidence that higher inflation increases household net equity in housing. Over the period 1957 to 2001 (just before the housing boom), net housing equity rose faster with inflation; each one percentage point increase in the price level was associated with around a 1.15 percentage point increase in equity, after controlling for income growth.
And of course, manufacturing was to return within the first two years of Obama's Administration.
ABC News Devin Dwyer wrote a 'fact check' related to President Obama's claim's of a resurgence in US manufacturing.
When Obama took office in January 2009, unemployment in the manufacturing sector stood at 10.9 percent and spiked to 13 percent a year later, according to the Labor Department. But in the two years since, unemployment has fallen precipitously, now holding at 8.4 percent in January 2012.
In terms of raw manufacturing jobs, the trajectory is similarly positive, though job growth has not yet fully recouped all the losses incurred during the Great Recession or the decades before.
Roughly 12.5 million Americans were employed in manufacturing when Obama took office, according to government data, as hundreds of thousands were being laid off. The picture has turned around since January 2010, but 690,000 jobs remain lost, according to Labor Department statistics.
Spending was to stop immediately.
ThinkProgresses Guest Blogger ( Michael Linden, Director for Tax and Budget Policy at the Center for American Progress Action Fund.) wrote an informative piece about spending since Obama took office.
Federal spending is lower now than it was when President Obama took office. I’ll pause to let you absorb the news.
In January 2009, before President Obama had even taken the oath of office, annual spending was set to total 24.9 percent of gross domestic product. Total spending this year, fiscal year 2012, is expected to top out at 23.4 percent of GDP.
Here’s another interesting fact. Taxes today are lower than they were on inauguration day 2009. Back in January 2009, the CBO projected that total federal tax revenue that year would amount to 16.5 percent of GDP. This year? 15.8 percent.
On May 10, the Wall Street Journal reported along with many sources about the first balanced monthly budget from the White House in many years.
By Damian PalettaThe U.S. government in April saw its first monthly budget surplus since September 2008, with large revenues offsetting below-normal federal spending.
A statue of Albert Gallatin, a long-serving U.S. secretary of the Treasury, stands in front of the U.S. Treasury building in this Aug. 16, 2011 photo.
The Treasury Department on Thursday said the government saw a surplus of $59.12 billion in April, with $318.81 billion in taxes and other revenue offsetting $259.69 billion in federal spending. The one-month revenue figure was the highest since April 2008. April revenues tend to be strong as many people wait until the deadline to file their tax return.
While there are far too many people out of work and cyclical retail spending going into summer, could someone help my understand more about the GOP's claim of a horrid economy? A horrid economy would be an economy from which we would all have to work to move the nation back form a depression or an extended recession. I am certain there is data out there someplace beyond the rhetoric. Maybe, just maybe, sources of "the economy" gloom and doom are outside of my purview based on my perceptions of credibility.
I do not watch nor listen to Fox News. I consider only Ali Velshi of CNN as a credible finacne expert on CNN. I do not read the WSJ (especially the Editorial Pages). I avoid all mention of the Cato Institute.
Maybe, it is all my fault!