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New Data: Recovery or Recession?

by George Landrith110623_economic_rhetoric_wuerker_328

A new study by the liberal Pew Research Center finds that the median income today is lower than it was during the “Great Recession.” When President Barack Obama said the recession was over in 2009, the median income for American households was $52,195 in inflation adjusted dollars. Two years later, the median income had fallen to $50,054 — a drop of more than 4 percent in just two years.

And since Obama took office, median household income has dropped by $4,000. So the first two years didn’t go very well and then once Obama proclaimed the recovery had begun, the same bad results continued and median income continued to fall at about the same rate. Where is the good news in this?

As President Barack Obama and Vice President Joe Biden campaign, they frequently claim that America’s economy is now headed in the right direction and they need four more years to finish the job. This line of argument requires one to accept Obama’s claim that things are actually headed in the right direction. Giving someone four more years to continue what they have been doing makes no sense unless you believe that they’ve been doing a good job and headed in the right direction.

So let’s set aside the rhetoric and the political talking points and simply analyze the facts.

  • The President claims that we have had job growth for more than 30 straight months. But that is only true if you ignore the fact that to keep pace with population growth, we must add about 150,000 new jobs every month. So creating only 149,000 new jobs a month means we are falling further behind.
  • Even during the best of Obama’s times, we barely averaged above this “break even point.” Now matter how paltry the jobs numbers, Obama claims victory and says that we’re headed in the right direction.
  • Unemployment has been above 8 percent for a record 44 months. Obama claims to have created 4 million jobs. But in just the last two years alone, 5.4 million workers have become so discouraged that they have given up looking for work. This fact clearly shows that Obama hasn’t even created enough jobs to keep pace.
  • Historically, a period of recovery — the time after a recession — experiences rapid economic growth at rate of more then 4 percent. This was true in the 1980s, the 1990s, and the 2000s. And during one quarter during the Reagan recovery, economic growth was nearly double at 7.4 percent. In one month in 1983, Reagan’s recovery created 1.1 million jobs — in one month 1.1 million jobs. But during Obama’s term, we haven’t seen anything remotely close to 4 percent growth. We’ve been lucky to see half that. And Obama has struggled to achieve in one year, the job growth that Reagan was able to achieve in one month — and Reagan had a much smaller population in the early 1980s.
  • Forty percent of young adults aged 24 to 35 now live at home with their parents according to the 2010 Census. Many of these are college educated adults who cannot find suitable full-time employment. Most are employed in low-paying jobs in the “hospitality” sector which includes food service jobs. In fact, one out of four jobs that Obama brags about having created, are in this sector. Most young adults didn’t earn a college degree because they aspired to living at home with mom and dad and working at a part-time fast food job. But such is the Obama “recovery.”
  • The Pew Report also concluded that median household wealth fell by 39 percent over a three-year span from 2007 to 2010. In 2007, median household wealth stood at $131,016. In 2010, it had fallen to $79,431. That means less money for retirement, less to send children to college, less to build a family business.
  • The Pew Center’s report also concluded that the Obama recovery is the “most negative for household income during any post-recession period in the past four decades.”  This simply means that income is dropping, not rising. Historically, incomes rise over time. During the Obama presidency, income is falling.

Obama will continue to tell Americans that we are on the right path. The cold, hard facts say otherwise. Who are you going to believe? Obama? Or your lying eyes?