Economic reality won’t be politicked away

One of the marks the current national mood is a general sense of uncertainty and financial strain. It’s not a Depression. We’re technically recovering from the “Great Recession” that began in 2008 and hit hard at the turn of 2009. It doesn’t feel like a recovery, though, and this is probably why:

The net worth of Americans is now at the same level as it was in 1992. That’s not referring to income, which has continued to increase slightly, but rather the total accumulation of income, property and portfolio value. The housing bubble’s collapse and the shock to traditional stocks that occurred just a few years ago has created a lasting effect that might take a very long time to fix. NPR also talked about this recently.

These kinds of stories are seldom reported without a political context. And though I normally try to stay out of the day-to-day partisan bickering, I’d argue this. Some want to pin these problems on President Obama, who took office as the worst effects of the Great Recession were setting in. Some would argue he did too much or too little in the year after he took office to address the issue. I’d argue that he had few choices but to try to stabilize the markets and nation, which he did accomplish even as it doesn’t “feel” particularly good. What he contributed to the fiscal mess was not nearly as bad as what he inherited.

No, I’d look to the causes of our fiscal instability in this country first, a blame that knows many culprits. The housing “bubble” was called that because prices were inflated beyond their actual value. When people began counting on their inflated values as equity, trouble ensued. People ran up private debt that mirrored, perhaps even eclipsed the national debt. Wall Street exuberance overinflated the value of companies and funds in much the same way. Voters sometimes elected politicians to cut taxes but then quickly elected others to protect beloved public spending programs, never anyone to raise taxes or actually cut meaningful spending. Or at least, never in enough numbers to form lasting political initiative.

I found this post by Andrew Sullivan to be staggering. Though former President Bush was not the only culprit in our fiscal woes, he did turn an opportunity to eliminate the national debt into a fiscal crisis that vexes us still, and that will follow not only President Obama to the end of his term or terms, but a potential President Romney and anyone else that happens into the job in foreseeable future. Just, wow.

Hey, the world is going to be OK. I do think that. But it is going to be different and we’re going to have to wrap our heads around the idea that we might need to rethink the nature of what “prosperity” means, particularly for a vast majority of the country not buffeted from this ongoing storm. A slow recovery will take time, but bit by bit the country can get back on track — if we manage to avoid a war in Iran, spending without tax increases, tax cuts without spending cuts, and degradation of our creative sectors. These are the parts that require college degrees, which now cost more than nice houses.

I’m sticking with the president (my choice; you’re entitled to your own), but another president would face the same circumstances with the same dwindling options. All of those options preclude artificial bubbles that create rapid, euphoric growth, something we’ve gotten fat on for 30 years. Literally fat. I need to go for a walk now.


  1. I’m sure that if we give endless do-overs to the people who run the banks, everything will be fine.

  2. If you believe you’re better off today than you were 3.5 years ago, vote for Obama, if not, don’t.

  3. Here are some economic facts driven by Obama’s policies/lack of leadership:

    •3 in 10 young adults can’t find jobs and live with their parents, highest since the 1950s (Pew Research).
    •54% of bachelor’s degree-holders under the age of 25 are jobless or underemployed, the highest share in decades (Northeastern University).
    •Black teen unemployment, now at 37%, is near Depression-era highs (Labor Department).
    •Almost 1 in 6 Americans are now poor — the highest ratio in 30 years — and the total number of poor, at 49.1 million, is the largest on record (Census).
    •The number of Americans on food stamps — 45 million recipients, or 1 in 7 residents — also is the highest on record (Congressional Budget Office).
    •Total government dependency — defined as the share of Americans receiving one or more federal benefit payments — is now at 47%, highest ever (Hoover).
    •The share of Americans paying no income tax, at 49.5%, is the highest ever (Heritage Foundation, IRS).
    •The national homeownership rate, now at 65.4%, is the lowest in 15 years (Census).
    •The federal debt greater than GDP, is the highest since just after WWII (CBO).
    •The U.S. budget deficit over $1 trillion each year Obama’s been in office (CBO).
    •U.S. Treasury debt has been downgraded for the first time in history, meaning the U.S. government no longer ranks among risk-free borrowers (S&P).
    •The share of Americans who’ve been out of work a long time — now at 42% of the unemployed — is the highest since the Great Depression (source: Labor Department).
    •The proportion of the civilian working-age population actually working, at 58%, is the smallest since the Carter era (Labor Department).

    Not to mention he:

    •Passed on approving the keystone pipeline.
    •Received a Nobel Prize for doing nothing (opinion)
    •Returned the bust of Churchill to the Brits.
    •Gave a collection of DVDs to the British Prime Minister
    •Denies the notion of American Exceptionalism.
    •Promised to close Gitmo — failed to do so.
    •Lost key races for NJ, VA, WI and Mass.
    •Himself called the midterm elections a shellacking.
    •Predicted the record setting debt stimulus would ensure that unemployment doesn’t exceed 8%.
    •Said, “I have visited 57 states. Now there is just 1 left to visit”.
    •Said to Medvedev…”give me space I will have more flexibility after my election”.

    And you’re better off?? I’m not..

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