The Recovery That Wasn’t

Three and a half years later, White House officials are still making wildly optimistic comments about the economy they mismanaged.

Two weeks after being sworn in as the 44th president of the United States, President Barack Obama told CNN: “The only measure of my success as president when people look back five years from now or nine years from now is going to be, Did I get this economy fixed?

By his own criterion, Obama deserves to be judged harshly. Headline unemployment, which the incoming administration projected to top out at 8.0 percent as long as its landmark February 2009 stimulus package was passed, has yet to be lower than 8.0 percent. The labor force non-participation rate—the percentage of healthy, working-age Americans who are no longer actively seeking a job and therefore not counted in headline unemployment statistics—has steadily climbed from 34.2 percent (then a two-decade high) in the month before Obama took office to 36.2 percent as of press time.

Meanwhile, administration officials have spent the intervening time claiming, absurdly, that the economy is on the mend. Federal Reserve Bank Chairman Ben Bernanke famously spoke of economic “green shoots” as early as March 2009, while unemployment was zooming northward toward the 10 percent mark. “Welcome to the recovery,” Treasury Secretary Timothy Geithner announced in The New York Times more than two years ago. In June of this year, President Obama claimed that “The truth of the matter is that…we’ve created 4.3 million jobs over the last…27 months; over 800,000 just this year alone. The private sector is doing fine.”

That gap between rhetoric and reality shows no signs of closing. Promises of economic interventionists have gone unfulfilled, but the proposals remain the same. On the following pages you will see two timelines. One depressing mountain range depicts the distance between the administration’s 8.0 percent unemployment worst-case claim and a reality that has been considerably worse; the other uses as a baseline the once-catastrophic 34.2 percent labor force non-participation rate that now seems to be an unreachable low.

Above and below the lines you will see an illustrated collection of administration quotations about this wonderful recovery we should start enjoying any minute now. It’s a humorous if grim reminder that Keynesian remedies don’t work as advertised, and that politicians will say anything—no matter how ridiculous—to maintain their grip on power. 

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  • Drake||

    The only people I know who believe that the economy is recovering are the truly delusional liberals. Everyone I know in the business world - big or small - is very pessimistic and simply trying to hang on. There is a sense of impending doom out there, particularly if Obama is reelected and tax-rates revert to the late 90's levels unadjusted for inflation.

  • Jackand Ace||

    "Everyone I know in the business world - big or small - is very pessimistic and simply trying to hang on."

    Really? You think Apple, JP Chase, Wells Fargo, General Electric, Walmart, IBM, the auto companies, even AIG now, and many more are just hanging on? These companies are awash in profits, as indicated every day by a doubling of the stock market since early 2009.

    Goods and services this past spring had volume increase of 1.7%. Not bad. Company profits increased by increasing productivity rather than hiring back released workers. That is the dirty little secret of this past recession. And now that housing is starting to recover, you would be hard pressed to find an industry that is not doing well right now.

    And that tax rate of the 90's that you are so fearful of...was that the tax rate when we had such great growth?

  • Drake||

    No shit they made profits by increasing "productivity". That's what I do. Because the economy sucks, companies don't have to use generous raises or bonuses to retain people - there are few opportunities for talent to leave and people are risk-adverse right now.

    Print up enough cash and the stock market will keep going up.

  • Red Rocks Rockin||

    Goods and services this past spring had volume increase of 1.7%. Not bad.

    The labor participation rate continues its downward spiral. Clearly those volume increases aren't amounting to jack shit in reality. And guess what--we've had three straight months of drops in the PMI. That's a ripe indicator of an upcoming recession.

    And that tax rate of the 90's that you are so fearful of...was that the tax rate when we had such great growth?

    What was the government spending rate? (I'll give you a hint--it was lower on both a raw and inflation-adjusted basis, not just in the aggregate but per capita as well)

    Seriously, people like you are so easy to refute I don't know why you bother.

  • Jackand Ace||

    Those volume increases mean very much to business, particularly when coupled with productivity increases. That is what we were speaking about from Drake's post. Nothing about labor.
    Let me clarify, r3, there is corporate American and labor America. Corporate America is thriving, labor is not. Your double dip recession fears have been posted since the recovery started and have yet to materialize.
    And the tax rate of the 90's did not hinder outstanding growth.

    Let me know when you are able to refute anything.

  • db||

    Crony America is doing just fine thanks to folks like you.

  • Jackand Ace||

    Thanks, db.

  • Red Rocks Rockin||

    Those volume increases mean very much to business, particularly when coupled with productivity increases. That is what we were speaking about from Drake's post. Nothing about labor.

    If people aren't working, it doesn't matter how many goods are produced. If you think they aren't connected, you're a moron.

    Here, let the ISM spell it out for you:

    "The PMI™ registered 49.6 percent, a decrease of 0.2 percentage point from July's reading of 49.8 percent, indicating contraction in the manufacturing sector for the third consecutive month. This is also the lowest reading for the PMI™ since July 2009.

    http://www.ism.ws/ISMReport/Mf.....mber=12942

    Oh, and guess what--last week Intel and FedEx cut revenue forecasts.

    Let me clarify, r3, there is corporate American and labor America. Corporate America is thriving, labor is not. Your double dip recession fears have been posted since the recovery started and have yet to materialize.

    There is no "recovery"--there's a stock market bubble blown up by Bernanke's quantitative easing, ZIRP, and 8-12% of GDP in deficits per year producing a 1-2% growth rate.

  • Red Rocks Rockin||

    And the tax rate of the 90's did not hinder outstanding growth.

    Growth that was ALSO built on an unsustainable credit bubble, in a time when government spending on an aggregate and per capita basis was lower than it is now.

    Let me know when you are able to refute anything.

    Let me know when you're able to use basic math.

  • Red Rocks Rockin||

    Oh, and some more stats for your dumb ass--we're taking in the same tax revenue as a percentage of GDP as we did in 1960, when the rates were MUCH higher. So clearly the tax rates, regardless of their level, have very little impact on overall GDP.

    It's the spending, stupid--and in 1960, spending was $760 billion, inflation-adjusted.

    Tell you what--I'll be happy to go back to Clinton-era tax rates if we can go back to Clinton-era spending rates.

  • Ayn Random Variation||

    They assume a direct relationship between tax rates and tax revenues. IOW, they are stuck on stupid.

  • Invisible Finger||

    Chase, WF, GE, AIG, the auto companies....

    Nice job of cherry-picking there. They all received gov't bailouts.

  • Jackand Ace||

    Not sure if your intent is to say that bailouts work, but here are a few more then:
    Exxon, Chevron, Ford, Intel, Proctor and Gamble, Berkshire, Pfizer, Google, JJ, and on and on and on.
    But this is tedious. Just look at the stock market which is a broader representation of corporate America. It has doubled, right?

  • Restoras||

    And I suppose next you'll tell us that the extra liquidity and interest rates at zero have nothing to do with that?

  • Spoonman.||

    Sure has. But obviously things aren't going so well for the working stiff.

    It's almost like intensive government involvement in the nominally private sector helps people get rich in ways other than giving consumers things they want. Since they aren't doing anything of value, they don't need any help from the unconnected.

  • Sevo||

    Jackand Ace| 9.11.12 @ 12:20PM |#
    "But this is tedious."

    Spreading bullshit commonly is.

  • Gilbert Martin||

    "And that tax rate of the 90's that you are so fearful of...was that the tax rate when we had such great growth?"

    The growth got started before Clinton ever took office.

    The recovery began before he took office in his first term and the next downturn started before he left office in his second term.

    But if you want to go back to the 90's, we can do that but we wont' stop at just the tax rates. We do it for every aspect of existence regarding the federal government. The exact same level of spending - on an absolute dollar basis - including entitlement spending. The exact same level of regulations - on an absolute basis, etc.

  • PapayaSF||

    I LOVE IT when Obama defenders downplay massive unemployment and underemployment and point to corporate profits and stock prices as proof that the economy is doing fine. I somehow suspect they wouldn't buy that during a Republican administration.

    They also trumpet new jobs, ignoring the fact that many of them are "McJobs" they used to deride.

  • Jackand Ace||

    If you read carefully, you see that what I said was in response to Drake who said that both large and small businesses were only hanging on.
    That clearly is not the case, so no need to review here again.
    I'm sure you also see that I said Corporate America is doing just fine (it is) and labor America is not (its not).
    OK?

  • Alex the wolf||

    That is basically a contradiction. If business is doing well, that is if they have good long term prospects, they expand and hire people. There is not a corporate economy and a labor economy, there is just the economy.
    And with regards to the Dow jones index being high, so it was before the .com bubble and before the 2008 recession.

  • Jackand Ace||

    Indeed it is not a contradiction. If you think hiring labor is an objective you are sadly mistaken. Businesses only hire people as a last resort. Hence technology, overtime, etc.

    I never said there are two economies. There are, among others, different components, two of which are corporations and labor. All components of an economy do not always do well together, as the case today.

    Surely you are not debating whether or not business (taken in the aggregate) is doing well today? It clearly is. Business does not look after labor.

    And as far as DJ, it has RECOVERED since 2008, has it not?

  • ThomasD||

    A stock market that is only up due to massive quantitative easing is hardly a reliable "indicator" of profits. It's as fake as Obama's styrofoam Greek columns.

    The economy stinks on ice, and the government is spending/inflating us into fiscal oblivion.

  • Skyhawk||

    1. Construction. Wasn't 'hard pressed' to come up with that one.

    2. You use a sample group of exactly one, to come to the conclusion that higher tax rates are good for the economy. How much better would it have been with lower taxes?

    3. Being involved in an industry that sees, first hand, the effect of the economy on businesses, you are seriously fucking deluded.

  • Jackand Ace||

    Construction is about 5% of the economy. And as the housing market improves, like recent signs show, it too will improve. One issue is the lack of construction coming from the PUBLIC sector, which of course is being limited...much to the happiness of libertarians.

    Never said that higher tax rates are good for the economy (congrats on reading what you wanted to read). I said higher tax rates did not impede the economy in the 90's.
    And that simply is a fact.

  • Skyhawk||

    "I said higher tax rates did not impede the economy in the 90's."

    How can you say that? Can you provide an analysis that lower taxes wouldn't have led to an even greater economy?

    "Construction is about 5% of the economy. And as the housing market improves, like recent signs show, it too will improve"

    Let's stipulate for the sake of argument that is correct.
    You said we would be 'hard-pressed' to find a business that wasn't doing well.

    It hasn't improved, At all. In fact, I see evidence, every day, that it is still on the decline.

  • Jackand Ace||

    Skyhawk-
    I can say that because the economy in the 90's is what it was, which was one of the greatest periods (if not the greatest) periods of growth in this country's history. And it occurred with higher tax rates than today, where we have a stagnant (for labor) economy. Even Reagan, Skyhawk, lowered taxes initially, and then raised them a number of times. And while he raised them, the economy kept growing.

    YOU would have to prove the opposite, which is that even lower rates in the 90's would have provided greater growth. And that, sadly, is unknowable.

    As far as my statement, I said that given that housing in finally starting to turn around, you would be hard pressed. Construction is part of that.
    Not great yet, but starting. Check out how Toll Bros., one of the largest developers, is doing.

  • Ayn Random Variation||

    LOL, on que

    "The only people I know who believe that the economy is recovering are the truly delusional liberals."

  • Restoras||

    This is all anyone needs to know about the complete failure of this administration's economic policy.

    RomerBernstein

  • John||

    Yet I know any number of people who convinced that Obama cares about the poor and the unemployed. Really? He has one hell of a weird way of showing it.

  • Drake||

    He loves them - that's why he wants more of them.

  • Ayn Random Variation||

    Where's Ross Perot when we need him. Remember all his charts and graphs?

    I wish "Charts And Graphs" was running instead of Romney.

  • ||

    I'm a firm believer that Presidents should bear little to no responsibility with "fixing" the economy. But since the Messiah stuck his neck out on this, I have no reservation about whacking him for it (looks quickly for SS black helicopters).

  • Pro Libertate||

    Less fixing, more stop garroting.

  • The Late P Brooks||

    Leaving aside the ridiculousness of all claims that a President creates jobs, what are those "4.3 million" new workers actually doing?

    How many of them are destroying wealth by producing unprofitable so-called green technologies?

  • Drake||

    Replacing the 5 million who lost their jobs?

  • PapayaSF||

    As I said above, many of the new jobs are the "McJobs" liberals used to dismiss.

  • Romulus Augustus||

    The argument tossed at me this morning was that "Obama was hopelessly ignorant of how bad the mess was that Bush left him, but that his four years at the helm have now given him more experience and understanding of the problems than Romney/Ryan; therefore Obama is the best choice for the next four years to solve the economic crisis."
    Some of his supporters now acknowledge how inexperienced he was in 2008, even compared to Palin, but now find his presidential experience has become a plus and we shouldn't go with an inexperienced 4 year governor or a common member of the House with no executive experience because we can see the price of inexperience!

  • Pro Libertate||

    Like Obama has shown the slightest sign of learning from his mistakes. Ye gods.

  • John||

    Obama was hopelessly ignorant of how bad the mess was that Bush left him

    So now they are admitting they were either liars or fools when they claimed otherwise in 2008. But we are supposed to believe them now when they claim Obama has learned.

  • Sevo||

    "Obama was hopelessly ignorant of how bad the mess was that Bush left him,...'

    This is nothing other than "IT'S BUSH'S FAULT!"(tm) in a fresh set of clothes.

  • Drake||

    So a sitting U.S. Senator was paying absolutely no attention to the American economy?

  • Almanian's Evil Twin||

    Correct

  • BarryD||

    So when he was speaking on the Senate floor, urging Senators to vote for TARP, he had no fucking idea what he was talking about?

    I suppose he just got a lot of campaign donations from the big banks.

    Oh wait...

  • KM||

    I've always hated that argument. It is so empty.

    Obama was a U.S. Senator during his 2008 campaign. Barney Frank and Chris Dodd were chairmen of banking/finance in their respective Houses and are both Democrats and therefore I assume on Obama's 'side'. For all intents and purposes Congress was evenly split meaning that Obama had over 250 U.S. legislators available for advice.

    On top of all that, he wanted the job. Roughly half the U.S. population wanted him to have it and a large part of that group spent the last 8 years screaming about Bush's fiscal irresponsibility.

    At the time of his inauguration if Obama was ignorant of anything other than some national security issues and the current furniture arrangement of the White House residence...it was his choice.

    What children he and his supporters are.

  • Pro Libertate||

    Don't put yourself forward for a job you aren't prepared to handle. It's not just the president that sucks here--it's his administration, Congress, and the courts as well--but he's so obviously not ready for prime time that it's amazing that people still supporting him can tie their own shoes.

  • Killazontherun||

    A stimulus in the Spring of '08, a banking bailout soon after, a huge banking bailout in the fall, and setting up the bailout of GM before handing over the reins. There is nothing Bush did that year that they would have done differently, and the things they would have done differently like filling Fannie Mae with party loyal cronies and sweeping their debt obligations under the rug would have made things even worse.

  • db||

    I like two terms as New Mexico governor compared to 1 failed term as POTUS or 1 term as Massachussetts governor.

  • Gray Ghost||

    Unfortunately, you and I are about the only ones who do, db. Still voting for him though. If my vote is meaningless, then I'm going to cast it for who best exemplifies my values. That ain't Romney.

    More misfortune is that the rising star in the Republican Party wasn't Ron Paul and his revolution; it was Santorum. If Romney were to have his Sirhan Sirhan moment 5 months ago, Santorum would've been the party nominee, not Paul.

    Sucks, doesn't it?

  • Ayn Random Variation||

    Tell that person to try that argument on their boss and see where it gets them.

    After 4 years of failure on the job: "Well, I had no idea how bad my predecessor fucked things up, and I was totally unqualified for the job, but after 4 years I now know what to do and you will start to see immediate improvement on my job performance as soon as you sign me up for another 4 year contract."

  • The Late P Brooks||

    that tax rate of the 90's that you are so fearful of...was that the tax rate when we had such great growth?

    Nothing else has changed, right? If we just go back to those higher job-creating tax rates, Rosy Scenario will come back home and love us long long time.

  • Drake||

    Good news, no inflation over the past 14 years! So when we go back to the old tax brackets, you will still have the same buying power when you fill up on $4 gas.

  • Almanian's Evil Twin||

    My goodness but you're a dumbass.

  • Drake||

    Really? Are you saying that our 90's tax brackets will be indexed to inflation?

    For example, in 2000 a married couple hit the 31% rate at $105,950. Does that 106k buy nearly as much today?

  • Jackand Ace||

    Well, thats not the point. The point is that we had a very strong economy in the 90's, and that tax rate did not hinder it. Now you can say that an even lower rate would have been even better, but that is just fantastical thinking at this point, is it not? The rate we had was the rate we had, and the resulting economy is history.

    That tax rate did not create that growth, but that tax rate allowed us to balance a budget and pay down the debt. I could just as easily claim that a lower rate would have created unbalanced budgets and no debt reduction, but that too would be fantastical.

    Like Bill Parcell's always says, your record speaks for itself.

  • Red Rocks Rockin||

    That tax rate did not create that growth, but that tax rate allowed us to balance a budget and pay down the debt.

    The national debt never went down during Clinton's term--and again, I note that you leave out what we were spending back then.

    09/30/2001 5,807,463,412,200.06
    09/30/2000 5,674,178,209,886.86
    09/30/1999 5,656,270,901,615.43
    09/30/1998 5,526,193,008,897.62
    09/30/1997 5,413,146,011,397.34
    09/30/1996 5,224,810,939,135.73
    09/29/1995 4,973,982,900,709.39
    09/30/1994 4,692,749,910,013.32
    09/30/1993 4,411,488,883,139.38

    http://www.treasurydirect.gov/.....stdebt.htm

    Now that you've shot your credibility, please go stick your head in a hole.

  • Restoras||

    How dare you muddy the narrative with inconvenient facts!

  • Jackand Ace||

    Here we go with the Craig Steiner BS. Fine, account it anyway you want, public or national. Under Clinton we ran a surplus which was beneficial in reducing debt.
    I will let Dan Mitchell of Cato speak for me (you know Cato, right?):
    "Public debt is the key variable since it measures the amount of money the government is draining from private capital markets, or adding, in the case of surpluses. "
    And public debt was reduced.
    Still waiting.

  • db||

    Pleast post a table of numbers demonstrating your argument.

  • Red Rocks Rockin||

    Here we go with the Craig Steiner BS.

    LOL at your gooncry grasping. Those numbers are from the Treasury's website.

    I will let Dan Mitchell of Cato speak for me

    Because clearly you can't come up with an original thought by yourself.

    And public debt was reduced.

    It doesn't matter if your debt is reduced in, say, food purchases if your net debt goes up due to acquiring a Corvette. It all goes on the same balance sheet, dummy--that's why it's called "Historical Debt Outstanding."

    Try again.

  • Invisible Finger||

    Here's how Obama's record speaks:

    THE ECONOMY SUCKS DONKEY BALLZZ!!

  • Skyhawk||

    That belongs on a bumper-sticker.

  • dinkster||

    As tax revenue as a percentage of GDP hasn't really changed, I'm not convinced taxes have really changed, regardless of the "top rate." Stop telling me about the tax rate, and start talking about revenue as a percentage of GDP. This "optimal" tax rate is meaningless.

  • The Late P Brooks||

    "Obama was hopelessly ignorant

    Full stop.

  • ||

    Obama was hopelessly ignorant

    My only disagreement with this statement is the tense.

  • The Late P Brooks||

    The rate we had was the rate we had, and the resulting economy is history.

    What else did we have? More importantly, what else didn't we have?

    If you want to do away with every regulation put in place from Day One of the Boosh administration, I might be tempted to make the trade. And, of course, reduce spending (and government staffing) levels accordingly.

  • The Late P Brooks||

    the resulting economy

    Seriously?

  • Jackand Ace||

    Tax rates are all part and parcel of an economy, are they not? At least Republicans and Libertarians say they are. In fact, you would think from those two groups tax rates are the ONLY factor influencing an economy. Or at least the most important factor, since that is all they talk about.

  • kinnath||

    New handle for the virtual filter

  • Sevo||

    Jackand Ace| 9.11.12 @ 12:09PM |#
    "Tax rates are all part and parcel of an economy, are they not? At least Republicans and Libertarians say they are. In fact, you would think from those two groups tax rates are the ONLY factor influencing an economy. Or at least the most important factor, since that is all they talk about."

    I see reading isn't one of your skills. Or you have highly developed skills at beating straw men.
    To make it simple, you're a fool or a knave.

  • BarryD||

    "Douche" conveniently includes both concepts.

  • BarryD||

    I love the Suck cartoons! Keep 'em coming!

  • Ayn Random Variation||

    Holy shit, it's incredible that these people will be in charge for another 4 years. Add another 4 years of similar proclamations and predictions to this chart, and we have our obituary.

  • Francisco||

    it shouldn't really affect me because I still have my house, my car and my job. Never mind what I had in store for that money, no - the robber knows better how to spend it.

  • شات عراقنا||

    thank u

  • tipuasher||

    Glad to see User Experience known priority over programming convenience. This is clearly the right direction
    http://iammorebook.com

  • cinsel chat||

    good thanks sohbet
    cinsel sohbet

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