One of the enduring myths of the past few years, trumpeted by the White House and accepted by much of the press, is that President Obama has led the economy back to a state of strong, or even solid, growth. Despite annual evidence to the contrary, the myth persists.
If you climb Mount Olympus on your Greek vacation this summer and find Zues hanging out with Hera, let me know. Maybe they have the strong economy up there with them and are willing to send it down.
The Organization for Economic Cooperation and Development is just the latest to notice that the emperor’s economic advisors have no clothes. According to the Wall Street Journal:
OECD’s gauge of future activity suggests that following a return to expansion in the second quarter, the U.S. economy is unlikely to grow as rapidly as it did last year. The leading indicator for the U.S. has fallen in each month this year, and now stands at 99.5. A level below 100.0, where it started the year, signals a slowdown, while a level above signals an acceleration.
Economic growth since 2010, during the “recovery,” has each year been between 1.6 and 2.5 percent in the United States, which, to use a term employed by PhD-level economists I know, really sucks. This, along with growing federal government offers of free stuff, explains why the labor force participation rate is the lowest it has been in 40 years and why income growth has stagnated.
In a little-noticed development last month – the New York Times, for example, relegated it to the B Section – the Federal Reserve actually LOWERED its growth forecast for the year, pegging it to between 1.8 and 2 percent growth. In other words, a little worse than usual for the Obama era. It had been forecasting growth in the range of 2.3-2.7 percent.
A recent article by former Bush economic advisor Edward Lazear helps debunk the other myth peddled by the White House, that this recession is special and harder to come back from. Lazear found that “states that suffered the worst employment shocks in the 2007-09 recession had the most rapid postrecession employment growth.”
Right. So the worse the recession was for them, the better they recovered. How does that square with White House claims that we were dug so far in nationally it was impossible to come out strongly? Lazier cites another study that found “steep recoveries after financial crises.”
Maybe you like Obamacare. Maybe you liked the stimulus. Maybe you like the growth in government. Those are opinions, and that’s fine.
But it is not an opinion that economic growth is strong. That, rather, is mythology written by the myth-makers in the West Wing.
And the Greek tragedy is being lived out by the rest of us.