This paragraph is the core of Mitt Romney’s case against President Obama:
What do we have to show for three and a half years of President Obama? Is it easier to make ends meet? Is it easier to sell your home or buy a new one? Have you saved what you needed for retirement? Are you making more in your job? Do you have a better chance to get a better job? Do you pay less at the pump?
In other words: Are you better off now than you were three and a half years ago?
This is a good question to ask. But we need to be a bit more sophisticated about it. Three and a half years ago, for instance, Barack Obama wasn’t yet president. The date was Oct. 25, 2008, and Obama hadn’t even won the election yet, much less taken office.
The National Bureau of Economic Research says the recession officially began in December 2007. The worst of it came in the fourth quarter of 2008. Obama was inaugurated on Jan. 20, 2009. The time frame Romney chose, in other words, thrusts the very worst of the recession into Obama’s lap despite the fact that he wasn’t even president yet. It’s like blaming a fireman for the damage the blaze did before he arrived.
But we need some way to judge Obama. One possibility is to simply start the clock the day Obama was inaugurated. That’s not a particularly smart approach, though. Presumably, we want to know the effects of the decisions Obama made. While it’s true that the economy lost a lot of jobs in February 2009, it’s hard to see how you could fairly peg those on Obama. The guy had been president for less than two weeks..
“There are significant lags between the time a president proposes a policy, the time it is enacted by Congress and the time necessary for it to take effect,” says Laura D’Andrea Tyson, who served as President Clinton’s chief economist. “These lags should be taken into account in measuring the economy’s job performance under a president. The first year probably should not count at all in terms of assessing the effects of a new administration’s policies.”
We can argue whether it should be a year or nine months or 16 months, but let’s say a year. The stimulus, for instance, spent most of its money in 2010, not in 2009. So let’s start there: January 2010.
Since January 2010, the economy has, on net, created 3.5 million jobs. Real disposable income has increased by 1.8 percent in 2010, and 1.3 percent in 2011. The net private savings rate is up. Housing prices have continued to fall. Gas prices have risen by about $1.20.
So, to Romney’s list, it is easier to get a job, most workers are making more money, and most people are saving more. But the housing market has remained soft, and gas prices are up. So are we better off? Sure, but we’re not in great shape, either.
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