Even putting his best gloss on the case and even outright contradicting hard numbers from his own administration, President Obama has a tough time selling the current economy as a comfy place in which to live and do business. According to the White House's own five-years-later report on the fiscal crisis and the administration's wrassling therewith, Americans remain trillions of dollars in household income behind where they were in 2008. That's when the report is being honest—it also claims a TARP profit that will come as a surprise to Christy Romero, the Special Inspector General for the Troubled Asset Relief Program, who reported quite the opposite just two months ago. Maybe that's why the president spent much of today's speech devoted to the fiscal crisis anniversary blaming Republicans for whatever economic doldrums there may still be even as he and his advisors insist the future's so bright ya gotta wear shades.
In his speech today, President Obama claimed credit for an economic turnaround:
We helped responsible homeowners modify their mortgages so that more of them could keep their homes. We helped jumpstart the flow of credit to help more small businesses keep their doors open. We saved the American auto industry.
And as we worked to stabilize the economy and get it growing and creating jobs again, we also started pushing back against the trends that have been battering the middle class for decades. So we took on a broken health care system. We invested in new American technologies to end our addiction to foreign oil. We put in place tough new rules on big banks—rules that we need to finalize before the end of the year, by the way, to make sure that the job is done—and we put in new protections that cracked down on the worst practices of mortgage lenders and credit card companies. We also changed a tax code that was too skewed in favor of the wealthiest Americans. We locked in tax cuts for 98 percent of Americans. We asked those at the top to pay a little bit more.
So if you add it all up, over the last three and a half years, our businesses have added 7.5 million new jobs. The unemployment rate has come down. Our housing market is healing. Our financial system is safer. We sell more goods made in America to the rest of the world than ever before. We generate more renewable energy than ever before. We produce more natural gas than anybody.
Health care costs are growing at the slowest rate in 50 years—and just two weeks from now, millions of Americans who've been locked out of buying health insurance just because they had a preexisting condition, just because they had been sick or they couldn't afford it, they're finally going to have a chance to buy quality, affordable health care on the private marketplace.
And what all this means is we've cleared away the rubble from the financial crisis and we've begun to lay a new foundation for economic growth and prosperity.
Well…that's swell. But the White House's own spin-happy economic report (PDF) concedes in its last paragraph devoted to household wealth:
Adjusted for inflation and population growth, only 45 percent of wealth lost during the recession has been recovered, and many of the hardest hit households did not benefit as much from the rebound in financial assets prices.
That rubble still looks knee-deep. And that's in a report touting good news.
Obama also claims a lot of credit for "investments" that helped "turnaround," "stabilize" and "jumpstart" various sectors of the economy. In his report, these assertions even take the form of a bald-faced claim that the troubled TARP program is now making a profit.
Despite initial fears that TARP investments in banks would cost taxpayers hundreds of billions of dollars, as of today, Treasury has recovered $28 billion more than the $245 billion disbursed, collecting $273 billion from TARP bank investments so far. Treasury is continuing to recover funds from the remaining $3.2 billion of bank investments, and every additional dollar collected represents an additional gain for taxpayers.
The White House report's executive summary explicitly insists of the total TARP program, "the government will receive an overall profit."
But contrast this with the TARP Inspector General's quarterly report (PDF), released July 24, 2013:
Taxpayers are owed $57.6 billion as of June 30, 2013. According to Treasury, as of June 30, 2013, it had realized or written off losses of $29.1 billion that taxpayers will never get back (although taxpayers may profit on other TARP investments), leaving $28.6 billion in TARP funds outstanding. These amounts do not include $8.6 billion in TARP funds spent on housing support programs, which are designed as a Government subsidy, with no repayments to taxpayers expected.
Even the underwear gnomes have a better grasp of profit than the prez and his chums.
The numbers are similar for Obama's claim to have "saved the American auto industry." His pet economic report may insist:
Chrysler repaid its loans to the government 6 years ahead of schedule, returning 90% of the total invested. The Treasury has also recovered a substantial portion of its investments in GM and plans to fully exit the company in the coming year.
But the IG's report puts that into context, pointing out that, "GM is still in TARP and taxpayers are owed $17.2 billion for the investment in GM." Of the money that GM has repaid, "GM repaid the $6.7 billion loan
provided through [Automotive Industry Finance Program] with interest, using a portion of the escrow account that had been funded with TARP funds." That's right. GM repaid taxpayer money using more taxpayer money.
The federal government still holds a big chunk of GM stock, which it will have to sell to "fully exit the company." Unfortunately, the difference between the price of the stock and the price it needs to be to break even is huge. Lest there be any doubt, "There's no question that Treasury, the taxpayers, are going to lose money on the GM investment," Inspector General Christy Romero said in an interview.
As for Chrysler, the IG's report says bluntly, "Chrysler is no longer in TARP and taxpayers suffered a $2.9 billion loss on the TARP investment in Chrysler."
And what about those jobs the president touts? Well…jobs have been created. But there's a long way to go. The unemployment rate has ticked down only courtesy of a labor participation rate that plummeted from 66.2 percent in January 2008 to 63.2 percent in August 2013 as job-seekers became discouraged and gave up. That's the lowest labor participation rate in 35 years. And no, it doesn't appear to be explainable by an aging population.
This doesn't mean that the economy is still as sick as it was at its worst. But it's definitely still ailing in President Obama's second term. He had Democratic majorities across the board for two years, and his party still holds the Senate along with the White House. Which means…it's the Republicans' fault. Says Obama:
The problem is at the moment, Republicans in Congress don't seem to be focused on how to grow the economy and build the middle class. I say "at the moment" because I'm still hoping that a light bulb goes off here. (Laughter.)
So far, their budget ideas revolve primarily around even deeper cuts to education, even deeper cuts that would gut America's scientific research and development, even deeper cuts to America's infrastructure investment—our roads, our bridges, our schools, our energy grid. These aren't the policies that would grow the economy faster. They're not the policies that would help grow the middle class. In fact, they'd do the opposite.
I'm as willing as anybody to believe that Republicans are capable of torpedoing a thriving economy, especially if they get a chance to restrict something that might give people pleasure or spend lots of money on shiny new weapons. But the president and his Democrats have tried the spend-happy approach for many years, and what we have are discouraged workers cracking open generic beer on the sofa, families poorer than they were half a decade ago and high-priced business bailouts that are a net loss for American taxpayers. No wonder American have had it with wasteful government spending and ever-soaring debt ceilings.
Laying the blame for this on Republicans (nevermind that many of them might have done the same themselves if they were in charge) sounds increasingly lame. American media might still be willing to give him a pass, but Germany's MNI called him out for his "slashing comments" that make actually working with the opposition difficult.
At this point, maybe that's all he has. The tax, subsidy and debt policies on which he staked his presidency look so lame that he's making up "facts" to shine up reality. If nobody is willing to believe that it's raining lollipops, well, then, it's somebody else's fault.