“Undermined By Congressional Partisanship”: President Obama’s Policies Revived The Economy
The economy had already lost 4.5 million jobs before President Barack Obama took office in January 2009, with job losses that month alone surging to 818,000. Economic contraction had also accelerated, reaching a staggering 8.9 percent annualized decline in the fourth quarter of 2008—the worst in 60 years. From this downward spiral, Obama’s economic policies proved instrumental in generating and sustaining a recovery.
In February 2009, Obama enacted the American Recovery and Reinvestment Act, and the pace of economic contraction and job loss immediately decelerated. As the stimulus ramped up, sustained economic growth took hold in mid-2009, and job growth resumed early in 2010—with 3.5 million jobs added since February 2010. The nonpartisan Congressional Budget Office estimates that without the Recovery Act, unemployment would have averaged roughly 10.7 percent in 2010, instead of 9.6 percent.
The Recovery Act was intended to jump-start the economy and avert a depression, not to restore full employment. The $831 billion price tag, spread over more than four years, was dwarfed by the staggering loss in economic activity caused by the bursting of the $7 trillion housing bubble. After economic growth resumed, mass unemployment and underemployment compelled more fiscal support. However, passing additional economic support through Congress proved a Herculean task.
In December 2010, the administration negotiated a payroll tax cut, continuation of emergency unemployment benefits, and targeted tax credits to sustain the delicate recovery as the stimulus began winding down. Without this boost, the economy would actually have slipped back into contraction in the first quarter of 2011.
It should be noted that the Federal Reserve also deserves credit for extraordinary measures taken to resuscitate the financial sector and facilitate recovery. But the Fed had already maxed out its key policy lever, the federal funds rate, when Obama entered office; monetary policy could not have single-handedly revived the economy.
While the economy has improved greatly under Obama’s stewardship, creating jobs for the millions of unemployed Americans who want to work remains imperative. In September 2011, Obama proposed the American Jobs Act, which would boost employment by roughly another 2 million jobs, according to numerous outside economists, including Mark Zandi.
Unfortunately, Obama’s substantive jobs agenda continues to be undermined by congressional partisanship. While more must be done to restore full employment, it is unquestionable that President Obama’s economic policies have been instrumental in ending the worst downturn since the Great Depression.
By: Andrew Fieldhouse, Economic Policy Institute, Published in U. S. News and World Report, March 13, 2012
“Trying To Make The Economy Worse”: Last Friday The GOP Had A Really Bad Day
Last Friday the GOP had a really bad day. It didn’t come in the form of new polling results — or some new political scandal. It was delivered to them by the economic statistics:
Private sector jobs up 243,000 — almost 100,000 more than expected.
Unemployment rate down to 8.3 percent.
Twenty-three straight months of private sector jobs growth.
But you say, this is not bad news — this is good news. Not for the GOP and its chances of ousting President Obama, seizing control of the Senate or maintaining its majority in the House.
As Senate Republican leader Mitch McConnell made ever so clear early last year, the Republican Leadership — and their backers on Wall Street — have one and only one goal: to defeat President Obama next fall. To do that, the GOP is betting against the American economy.
For the last two years they have done everything in their power to slow America’s recovery from the greatest economic meltdown since the Great Depression.
They have opposed virtually every element of the president’s American Jobs Act.
They brought the economy to the brink by threatening that they wouldn’t allow America to pay its bills during the debt ceiling standoff last year.
They tried their best to prevent extension of the payroll tax holiday and unemployment benefits that are so critical to maintaining buying power momentum as the economy begins to pick up speed.
And, of course, they advocate returning to the regulatory and fiscal policies that caused the Great Recession in the first place.
But the most significant thing they have done to stall the economic recovery has been their refusal to continue federal aid to state and local government.
In the last 23 months, the economy has created 3.7 million new private sector jobs. But during the same period, it has created only 3.165 net total jobs. That is because government — mainly state and local government — laid off a net of about 535,000 people.
If the Republicans in Congress had not refused to continue providing aid to state and local governments, it is likely that unemployment would be in the mid 7 percent range and the economy as a whole would have at least another half million jobs.
And we would also be more likely to have more private sector jobs as well, since the additional teachers and firefighters and policemen who the Republicans basically fired, would have had money to spend on the products and services produced by private businesses.
As much as they like to pretend they don’t agree with “Keynesian” economics, many Republicans completely understand that by refusing to provide aid to state and local government, they are hurting the economic recovery — and that is exactly what they are trying to do.
They have been perfectly willing to allow our kids to have fewer teachers and bigger class sizes, and to allow our cities to have fewer policemen and firefighters all to advance their political goal of slowing the economic recovery.
But despite their efforts to the contrary, the economy is beginning to gain traction. That is very important to the prospects of everyday Americans — and it is critically important politically.
Anyone who has ever tried to move a car that is stuck in the snow — or in the mud — knows what I mean. As long as the car just keeps spinning its wheels, there seems to be no hope. But after you’ve shaken and pushed, and put sand under the tires and the car finally begins to get the smallest amount of traction — everyone’s spirits change. Suddenly there is hope that you’re finally going to get the car moving again.
That’s what’s beginning to happen to the economy — and it will have an enormous effect on the attitudes of voters. It begins to give them hope that the president’s policies are, in fact, moving the economy in the right direction — that it actually is beginning to build up steam — that there is hope that middle class Americans are actually going to see their prospects begin to improve.
And it gives lie to the ridiculous statements of Mitt Romney, who continued to claim as late as last Friday that Barack Obama has made the economy “worse.”
The definition of “worse” is “not as good as it was before.” The economic disaster that was caused by the policies of the Bush administration — the same policies that Romney wants to bring back to the White House — caused the destruction of 8 million jobs. In fact, George Bush was the first president in modern American history to preside over net zero private sector job growth.
As soon as President Obama took office he put into place policies that reversed those jobs losses. Monthly private sector job losses declined continuously and finally turned positive — and the economy has added private sector jobs continuously for the last 23 months. In the last two months alone, the economy has added 446,000 new jobs. That is not worse. In fact, that is commonly known as better. And that is a huge problem for the GOP political narrative this fall.
In the next several weeks, Congress will rejoin the battle over the extension of the payroll tax holiday and unemployment benefits for those who are out of work for no fault of their own. Recall that this was the fight that involved the complete surrender of GOP opposition in the week leading to the Christmas holidays. Then, they agreed to a two month extension that guaranteed that the battle would be renewed — a fight that will once more highlight just how, when it comes to jobs, President Obama and the Democrats are doing battle with a “do nothing Republican Congress.”
There will likely be ups and downs in the jobs numbers over the next eight months. But as long as the economy continues to gain traction — and as long as Democrats continue to battle for jobs legislation in Congress — there will be many more bad days ahead for the GOP’s strategy of making themselves look better by trying to make the economy worse.
By: Robert Creamer, The Huffington Post, February 5, 2012
If Only GOP Lawmakers Were More Like GOP Voters
I imagine everyone has seen the bumper sticker that says, “Lord, protect us from your followers.” I have an idea for a related sticker that reads, “Republicans, protect us from your elected officials.”
In the existing political landscape, the real problem is not with GOP voters; it’s with GOP policymakers. This isn’t to let the party’s supporters off the hook entirely — they’re the ones who supported and elected the officeholders — but it’s hard to overstate how much more constructive the political process would be if Republican lawmakers in any way reflected the priorities of their own supporters.
Last week, a national poll found that Republican voters broadly support the Democratic jobs agenda — a payroll tax cut, jobs for teachers/first responders, infrastructure investments, and increased taxes on millionaires and billionaires — in some cases by wide margins. This week, Tim Noah noticed this observation can be applied even further.
I’m liking rank-and-file Republicans better and better. Earlier this month we learned that they favor Obama’s plan to tax the rich. Now we learn that a 55 percent majority of them think Wall Street bankers and brokers are “dishonest,” 69 percent think they’re “overpaid,” and 72 percent think they’re “greedy.” Fewer than half (47 percent) have an unfavorable view of the Occupy Wall Street protests. Thirty-three percent either favor them or have no opinion, and 20 percent haven’t heard of them. Also, a majority favor getting rid of the Electoral College and replacing it with a popular vote. After the 2000 election only 41 percent did. Now 53 percent do. How cool is that?
Every one of these positions puts the GOP rank-and-file at odds with their congressional leadership and field of presidential candidates.
I don’t want to exaggerate this too much. The fact remains that the Republican Party is dominated by conservative voters, especially those who participate in primaries and caucuses. I’m not suggesting for a moment that the party’s rank-and-file members are moving to the left.
But the recent poll results are also hard to miss — many if not most GOP voters are perfectly comfortable with plenty of progressive ideas, including tax increases on millionaires and billionaires. It’s starting to look like the party’s rank and file is made up of mainstream conservatives who want their party to help move the country forward.
And yet, when we look to Republican officials in Washington, how many GOP members of Congress are willing to endorse any of these popular measures? Zero. Literally, not even one Republican lawmaker has offered even tacit support for ideas that most GOP voters actually like. In the Senate, a united Republican caucus won’t even allow a vote — won’t even allow a debate — on popular job-creation ideas during a jobs crisis.
If the actions of GOP lawmakers in any way resembled the wishes of GOP voters, our political system wouldn’t be nearly as dysfunctional as it is now.
Congratulations, congressional Republicans. You’re far more extreme than your own supporters.
By: Steve Benen, Washington Monthly Political Animal, October 25, 2011
If Only Sen Snowe’s Actions Met Her Misplaced Rhetoric
Treasury Secretary Timothy Geithner talked to the Senate Small Business Committee, urging its members to approve jobs measures proposed by the White House. Sen. Olympia Snowe (R-Maine), ostensibly Congress’ most moderate Republican and the member most likely to listen to reason, went on quite a tirade.
“Your primary mission is to craft the economic policy of this country, and at this point, it simply isn’t working,” she told Geithner. “Something’s gone terribly wrong, and what I hear over and over again is that there is no tempo, a tempo of urgency.”
“I don’t know who you’re talking to…but you need to talk to the average person,” she said later in a testy back and forth with Geithner. “Rome is burning.”
I’m delighted Snowe is pretending to care about the economy. I’m also delighted she thinks she’s in touch with what “average” people want, and would like to see policymakers to act with “urgency.”
But if Olympia Snowe thinks her actions are consistent with her rhetoric, she’s sadly mistaken.
We are, after all, talking about the alleged moderate from Maine who, just last week, voted with right-wing senators to refuse a debate on the popular and effective American Jobs Act. She’s the same senator who’s refused to endorse any of the provisions in the bill, no matter how much they’d help. What was that she was saying about “urgency”?
Snowe thinks Geithner is responsible for crafting the nation’s economic policy? Here’s a radical idea: maybe if Snowe could bring herself to stop filibustering worthwhile economic legislation, Geithner might have more success.
“Rome is burning”? And who, exactly, does Snowe believe is responsible? The party with good economic ideas that can’t overcome Republican obstructionism, or the party engaged in the obstructionist tactics, offering ideas that would make the economy worse, and by some accounts, holding back the nation deliberately?
Snowe seems to believe the status quo isn’t working. On this, she’s correct. But it’s not working because Republicans are getting their way.
In what universe does it make sense for Snowe to blame Geithner? Snowe and Republicans got the tax cuts they demanded; Snowe and Republicans saw the stimulus spending evaporate, just as they wanted; Snowe and Republicans are watching the public sector lay off hundreds of thousands of workers, just as GOP policy dictates; and Snowe and Republicans have forced the White House to accept massive spending cuts, which takes money out of the economy on purpose.
And now she’s complaining? Why, because her party is getting what it wants and she doesn’t like the results?
Arguably one of the most dramatic Democratic dilemmas of 2011 and 2012 is overcoming the realization that Republicans are getting their way on economic policy and then denying any responsibility for the results. Indeed, it’s a rather extraordinary con: GOP officials see much of their agenda implemented, then see it fail, and then blame Obama when their policies don’t work.
The nation is reading from the Republicans’ economic playbook, and thanks in part to Snowe’s filibusters, that’s not likely to change anytime soon. When the GOP agenda fails, Republicans should be prepared to accept responsibility for the consequences, instead of pretending they’re not getting their way.
By: Steve Benen, Washington Monthly Political Animal, October 18, 2011
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