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Home Publications Blogs Beat the Press At Each SOTU The Economy Has Been in the Best Shape Since President Obama Took Office

At Each SOTU The Economy Has Been in the Best Shape Since President Obama Took Office

Tuesday, 28 January 2014 05:59

The NYT had a peculiar account of the state of the economy in its lead up to the state of the union address. At one point it told readers that:

"several indicators show that the economy is in its best shape since he took office in 2009."

This is peculiar since it would have been true in 2010, 2011, 2012, and 2013 also. In effect, the recession could be seen as throwing the economy into a big hole. We have been climbing out of the hole ever since. It would take an extraordinary turn of events to throw us back down to the bottom of the hole so the real question is the rate at which we get out of the hole. Thus far the rate has been quite slow. Even if we sustain the somewhat faster growth rate projected for 2014 we would not be getting out of the hole (measured as returning to full employment) until the end of the decade. 

Comments (3)Add Comment
SOTU: How to Lose with a Winning Hand Every Time: Polar Vortex is Good News
written by Last Mover, January 28, 2014 7:29

NYT says:
Demand for labor is up and the unemployment rate is below 7 percent for the first time since November 2008. Consumers, buoyed by rising home prices and stock values, are spending more; so are businesses. Exports are growing as Europe regains health. The fiscal drag from state and federal spending cuts has abated. And contrary to Republicans’ claims, many forecasters do not see the health care law as “a job-killer.”

Not only that, as proven by the Polar Vortex and extreme cold, global warming is a myth, which means the President can now approve the Keystone Pipeline with full confidence that it will replace all the jobs lost due to his failure to bring the economy to full employment with stimulus spending ... back when he actually had the political power to do so.

As your highy risk averse President who leads with concession, he has consistently demonstrated that whenever he had a winning hand in the game of political poker, he always folded rather than making a single bet, to force the remaining players to come around to a reasonable compromise.
The NYT lost me at "Demand for labor is up"
written by Sustainable Gains, January 28, 2014 12:52
How are we to measure demand for labor? Employment growth has been lagging working-age population growth for the past several "Obama years", and indeed for the past 13 years on the whole. Employment, that is the ACTUAL NUMBER of workers in the economy, has not kept up with population growth, has not returned to pre-recession highs, and is only slightly higher than it was 13 years ago.

I suppose demand for labor is up from a really low level, but it's not high by any historical measure.

If demand for labor was HEALTHY, we would be seeing wage increases consistent with productivity growth, so that labor's share of the economy was stable or even increasing back to historically normal levels.

What we see in the data is that labor's share of the economy continues to plumb new, never-been-seen-in U.S.-history-since-at-least-1929 lows.

Demand for labor ain't healthy enough yet. Washington has more work to do.
Is Obama actually that Stupid?
written by Xelcho, January 29, 2014 4:36
@Last Mover

While I would like to think that these congress and executive branch critters are reasonable/rational people history has proven otherwise countless times and almost never in support. This does remind me of the old quote (paraphrased):One can willingly not see something if their wage depends on it.

I do not believe that these people, or their handlers, can possibly be that dull, seeing as there is almost no evidence to refer to, we will continue to wonder what is behind much of the logic that supports the DEM party.

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About Beat the Press

Dean Baker is co-director of the Center for Economic and Policy Research in Washington, D.C. He is the author of several books, his latest being The End of Loser Liberalism: Making Markets Progressive. Read more about Dean.