Economy has only half-recovered from 2008 crash, admits Obama report
Less than half of Americans’ per-capita wealth that was lost in the government-boosted property bubble has been recovered by mid-2013, says a new White House report that is intended to help President Barack Obama trumpet his economic accomplishments.
“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 [Wall Street] financial assets prices,” the report admits.
The 49-page report cherry-picks favorable economic data to justify its claim that “America has fought our way back … thanks to the grit and resilience of the American people.”
But the report, titled “The Financial Crisis: Five Years Later,” ignores diverse data sources that show many or most Americans are worse off today than on Jan. 20, 2009, the day Obama was inaugurated.
Obama is scheduled to make a Sept. 16 appearance in the White House’s Rose Garden to mark the five-year anniversary of the Sept. 2008 bankruptcy of Lehman Brothers investment firm, which collapsed after it over-invested in shaky mortgages during the government-inflated bubble.
Obama “will be joined on-stage and in the audience by people that have benefited from his economic recovery proposals over the last five years including small business owners, construction workers, homeowners, consumers and tax cut recipients,” said a White House statement.
But Obama’s economic report has so many gaps that it fails to mention today’s unemployment rate, or even the 20 million Americans who are unemployed or underemployed.
The report does declare that “over the past three and a half years, our businesses have created seven and a half million new jobs.” But the population also has grown 7 million, from 306.8 million in 2009, to 314 million in 2012, partly through the arrival of roughly 5 million immigrants.
The report doesn’t mention the word “immigration,” even though Obama has repeatedly endorsed a draft immigration rewrite that would legalize around 33 million immigrants over the next 10 years, according to various estimates. That’s equal to roughly three new immigrants for every four American births.
It doesn’t mention “inequality,” which has risen since 2009, because the top 1 percent of income earners have accrued nearly all income gains since 2009, according to a recent study by University of California economist Emmanuel Saez.
The report doesn’t mention “ratio,” or “workforce,” partly because roughly six million Americans have quit looking for work. The drop is seen in the data about the ratio of Americans in the workforce, which has dropped from 65.7 percent in January 2009, to 63.2 percent in August 2013. That’s the lowest rate since 1979.
It doesn’t mention that Obama boosted the taxpayers’ accumulated debt by $6.5 trillion, but does say that “our [annual] deficit has fallen by 50% since the President took office.” The debt owed by the taxpayers rose by $3 trillion under President George W. Bush.
Roughly six percent of debts held by American households are in delinquency, compared to 3 percent in 2006, says the report.
The report doesn’t mention the Supplemental Nutrition Assistance Program, or food stamps, even though enrollment in the program has dramatically increased over Obama’s tenure, from 28 million recipients in 2008 to 47.7 million recipients in June 2013.
But the report does acknowledge the loss of wealth caused by the government-inflated housing bubble and by the subsequent crash on Wall Street, which was partly caused by many investors’ mistaken reliance on overvalued mortgages.
Those “hardest hit” households include many low-income black and Hispanic families who bought houses during the government-boosted bubble, only to lose them during the crash.
As a state senator and lawyer in Illinois, Obama made money and won political friends by leveraging federal mortgage regulations.
The report does not mention “African-American,” “Hispanic” or “Latino, but it does use the word “minority” once.
“Young people, those with less education, and members of historically disadvantaged minority groups were particularly hard-hit,” says the report, which did not mention the minimal recovery among those groups during Obama’s tenure.
The report, however, insists on optimism.
“We’ve cleared away the rubble from the financial crisis and begun to lay a new foundation for stronger, more durable economic growth,” it says on page three.
“We need to keep building on that foundation by focusing on the cornerstones of a strong, secure middle-class life: a good job, a quality education, a home of your own, affordable health care when you need it, and a secure retirement,” it insists.
“That’s the conviction that has driven President Obama since he first ran for this office – that our economy works best when it grows not from the top-down, but from the middle-class out – that we are stronger when everyone who works hard has a chance to get ahead,” it concludes.