In President Obama’s speech on the economy Thursday, he walked a tightrope between taking credit for economic progress and admitting that Americans see a weak, stale economy outside their front doors.
But there’s a simpler, and more factual, explanation: Economic indicators are not actually that good.
In Obama’s formulation, economic progress has been partly a result of “sound decisions” on his part, but the gains “aren’t yet broadly shared.” That last part is right: Median wages are lower than they were when Obama took office and fell this year despite growth in employment and output.
Gross domestic product is growing – but far less than forecasters expected at the time Obama came into office. The Congressional Budget Office, for example, forecast that GDP growth would exceed 4 percent per year from 2011 to 2013. Instead, it muddled along at around 2 percent.
The White House’s own forecast implied that, with or without government action, unemployment caused by the recession would fall below 6 percent in late 2012. Instead, unemployment at that time was close to 8 percent and is only now – thanks mostly to retirees and students – approaching the 6 percent threshold.
The labor force participation rate among adults between ages 25 and 54 has fallen steadily through the Obama recovery, from 82.8 percent when he took office to 81.1 percent most recently.
And thanks to all the new barriers to investment created by this administration, every day more businesses are closing their doors than opening them. The business failure rate is much higher than it used to be.
There’s no paradox. The economy just isn’t very strong.
