It’s time to Break It Down!
If you listen to the Radical Right, you have heard that President Obama is many things; a Kenyan, an anti-Colonial, a Socialist, a Muslim, a Hitler clone, an inept newbie who doesn’t understand and is unfriendly toward business, but mainly, a big spending, economic recovery killing, Yellow Dog, Liberal Democrat. In the event you are a regular listener to Fox News, you have heard all those things, and…the fact of the matter is, you heard wrong. He is not, nor has he ever been any of those things.
I will be the first to admit, the President is not a denizen of Wall Street. High Finance is not his strongest suit, but like any Commander-in-Chief, he does not have to be the smartest person in the room, on every conceivable subject.
Moreover, it is probably best if he is not. Among his primary tasks is assembling a formidable team, capable of effectively tackling whatever problems may confront our country. As we approach the midpoint of the first year of Mr. Obama’s second term, all indications are the President’s economic advisors have succeeded in their part of this endeavor. They helped him chart a course and execute a plan that has successfully revived an economy so moribund, that at it’s nadir, it was widely considered the country’s worst since the Great Depression; hence, commonly referred to as the Great Recession.
Political opponents have maligned POTUS as being the incarnation of every negative icon imaginable from the anti-Christ to the epitome of anti-business. Yet, a strange new meme has emerged recently. In the May 16th Edition of Forbes Magazine, Adam Hartung, who covers business growth and overcoming organizational obstacles for the magazine penned an article in which he shares an interview with Bob Deitrick, Co-author of “Bulls, Bears, and the Ballot Box (BBBB).” Mr. Deitrick articulates a clear and compelling case that President Obama’s leadership and resultant policies have directly influenced the course of what is now, at least arguably, a resurgent economy. Specifically, the author credits President Obama with the facts that:
The auto rescue plan worked
Wall Street reform has served to re-instated faith among investors
Markets are more predictable; a sign of increased faith, decreased risk
Small investors (i.e., those limited to 401(k) or IRA investments) have experienced an annual compound return of more than 24% since the lows of March 2009. By the way, that is a better record than Clinton, Reagan, or Roosevelt, the previous winners cited in BBBB
It is appropriate, if not necessary, to place in proper context the depths of the 2009 economic decline. At the end of the Clinton Administrations’ second term, the ConsumerConfidence Index (CCI) was at a record high of 140. By the end of the Bush Administration’s second term, this index had fallen to 25.3, which is an historic low. By contrast, at the end of the economically weak Carter years, the index was still at 74.4.
In sifting through the granular details, it is important to note that President Clinton left office with a budget surplus; President Bush, conversely, left America mired in deficits, as Congress cut taxes, while raising defense spending exponentially. Moreover, financial institutions experienced significant distress; many were on the verge of failing, and of course, some did.
The Congressional Budget Office (CBO) is now reporting a $200 Billion decrease in the deficit. This de-escalation is attributable, primarily, to increased revenue from a growing economy, higher taxes on the wealthiest Americans, a fairer tax code, improved regulation, and consistent Securities and Exchange Commission (SEC) enforcement. Undoubtedly, the proponents of Supply-Side Economics are apoplectic, as this economic rebound represents a counter-intuitive fact to challenge their exuberantly held theory. The deficit is down to 4% of Gross Domestic Product (GDP); it was over 10% at the end of George W. Bush’s Presidency.
Conservatives have raised the Spirit of Ronald Reagan to near sainthood. Yet, for all the honorifics conferred upon the Great Communicator, and despite the short-term memory cycle we routinely afford politicians, the inconvenient truth is President Reagan tripled the national debt during his tenure. In doing so, he created what his contemporary legion of followers might call “a legacy of unpayable debt for our grandchildren.” No wonder, latter day Conservatives managed to develop an inexplicable affinity for Bill Clinton. His tax policies erased Ronny’s Ocean of debt.
Back to the present. In summary, Deitrick suggests President Obama, whose administration has shown little to no proclivity to take credit from the upsurge in economic indicators, should do so. In reality, how you see the President’s performance, in economic terms, is likely to depend on the trajectory of your personal economy. If you are a Wall Street Dom, in all likelihood, you have made a mint during the recovery. As noted earlier, if you have a 401(k) or an IRA, chances are, you have done pretty well.
Naturally, there are still those who are yet to have their economic ships elevated by the rising economic tide. Nevertheless, odds are there few instances in which individuals, given the choice, would swap their present day economy for the one they had in 2009. Therefore, I implore you. Take a moment to…“Consider President Obama’s Economy: You Might Be Surprised!”
I’m done; holla back!
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BREAK IT DOWN! 