- It’s morning again in America – well, at least it apparently is in Charlotte. @JimPethokoukis
- To top it all off, America is less competitive today – less able to grow quickly than it was four years ago. @JimPethokoukis
- A recovery where incomes fall & the labor force degrades doesn’t make America better off. It isn’t even a recovery at all.
It’s morning again in America — well, at least it apparently is here in Charlotte. TV viewers watching the festive Democratic National Convention would be forgiven for thinking the event was somehow beamed in from a strange alternate reality where the Great Recession was followed by a Go-Go Recovery.
Where unemployment wasn’t stuck at over 8 percent for 42 straight months.
Where GDP wasn’t growing at less than half the rate of previous rebounds.
Where the national debt hadn’t just passed $16 trillion, bigger than the entire US economy.
At the DNC wing-ding, happy times are here again thanks to the wise economic stewardship of President Obama.
Out in the real America, unfortunately, there’s a No-Go Recovery — where unemployment is high, growth slow and the debt exploding.
Are we better off today than we were four years ago? Only if you frame that question in an absurdly narrow way. In January 2009, America was in a recession; today, the economy is slowly growing. In January 2009, America was losing jobs; today, it is adding them.
But had Obama done nothing, had he not borrowed that trillion bucks, the US economy would still have recovered. Maybe even recovered more quickly.
Just ask the White House. Back in 2009, Team Obama’s economists predicted the unemployment rate today would be around 6 percent even if Congress failed to pass the new president’s $800 billion stimulus plan.
Six percent unemployment if Congress did absolutely nothing.
Instead, the jobless rate is more than 2 percentage points higher, with the stimulus, than in that hypothetical. So one might conclude that Obama’s policies have actually impeded the recovery. He made it worse.
But, hey, maybe the unemployment rate doesn’t matter — that’s why it’s being consistently ignored by Dem convention speakers. It’s just another boring number only Washington wonks care about.
That’s what White House Communications Director Dan Pfieffer said in an economic panel here — that only the elite denizens of the “Acela corridor” from New York to Washington care about monthly jobs reports, like the one coming out tomorrow.
Well, if the job numbers don’t matter, maybe income stats do. And they’re awful — even worse now than during the downturn.
According to an analysis of Census Bureau data by Sentier Research, median household income has fallen more during the three-year recovery, 4.8 percent, than it did during the 18-month recession, 2.6 percent.
As one of the researchers told Bloomberg, “Almost every group is worse off than it was three years ago, and some groups had very large declines in income. We’re in an unprecedented period of economic stagnation.”
To top (bottom?) it all off, America is also less competitive today — less able to grow quickly than it was four years ago.
Back then, the United States— financial crisis and all —had the globe’s most competitive economy, according to the World Economic Forum. In a report out yesterday, America has now fallen to seventh in its rankings. Among our biggest problems: high business taxes and inefficient government.
As it happens, those issues came up frequently at the Republican National Convention. At the DNC? Not so much.
Indeed, the continued high level of unemployment is itself damaging America’s future growth prospects. As a recent research note from Citigroup warned, “Long bouts of higher unemployment are empirically linked to losses of human capital, raising structural unemployment.”
In other words, America’s greatest asset, our superproductive workforce, is wasting away from lack of use and opportunity. Although the economy has been adding jobs, the pace has been so slow that the number of people working as a share of the population is lower now than when jobs were being lost.
A recovery where incomes fall and the labor force degrades doesn’t make America better off. Actually, it isn’t even a recovery at all.
James Pethokoukis is editor of The American Enterprise Institute’s blog.