Is it time for Obama to own this economy?
November 19, 2012 by Dan Mitchell
I agree that Obama inherited a crappy economy, and I think it is silly to assert that he bears any responsibility for the severity of the 2007-2009 recession.
But it is very fair to hold him responsible for what’s happened since the recession ended. I’ve cited data from the Minneapolis Federal Reserve on both employment and gross domestic product to show that Obama has presided over the weakest recovery in the post-World War II period.
And I think it is fair to blame Obama for the economy’s anemic performance during that time, largely because his agenda of faux stimulus and Obamacare exacerbated the statist policies of Bush. In other words, he promised “hope” and “change,” but delivered more of the same.
Well, now that the election is over, even the Washington Post is willing to admit that Obama’s economic performance is dismal. Here’s a remarkable chart showing that growth is far below the average.
There are actually two very important conclusions to draw from this chart.
- First, the economy has not recovered the lost output from the recession, which is a point made by Nobel laureate Robert Lucas. That’s bad news.
- Second, it appears that the economy is now a lower-growth trend line. That’s worse news.
Indeed, I fear permanently lower growth is the legacy of the Bush-Obama years. We now have a substantially bigger burden of government spending, and things will get worse rather than better in the absence of real entitlement reform.
To be blunt, those are not the policies that create jobs and wealth.
Last century, a good rule of thumb was that the United States was about halfway between the high-growth, small-government economics such as Hong Kong and Singapore and the low-growth, big-government economies of Europe.
But as we move closer and closer to European-style economic policy, it should be no surprise that we get anemic European-style economic performance.
We know the recipe for growth and prosperity. But the political elite is oblivious or doesn’t care.