Two words to describe the Obama era: Downward revision

If it feels like the recession never ended, that’s because economic growth is so low we’re practically in a recession right now.

The Commerce Department this morning reported its initial estimate for economic growth from April to June: an annualized rate of 1.3 percent, which is still less than half the long-term trend, two years after the recession officially ended.

But what shouldn’t be overshadowed by that poor number is the downward revision of growth from January to March to a paltry annualized rate of 0.4 percent — from an earlier estimate of 1.9 percent, which was bad enough but now seems like President Obama’s version of the Roaring Twenties. There were also smaller downward revisions to figures for the last two quarters of 2010, and four of the last six quarters overall.

In short, even the meager growth previously reported has been revised downward to the less-rosy reality Americans have been experiencing all along.

These figures represent inflation-adjusted growth. The unadjusted figures were 3.1 percent in the first quarter and 3.7 percent in the second. That means higher prices have swallowed up just about all of the economic gains this year. (Not-so-fun fact: While the debt ceiling has dominated the news cycle recently, gas prices nationwide have crept back up by almost 17 cents a gallon during the last month and are almost back to being $1/gallon higher than a year ago.)

The growth the Federal Reserve has tried to stimulate through its easy monetary policies has been consumed by the inflation those policies have wrought. The growth Obama and the Pelosi-Reid Congress tried to stimulate through timid tax cuts, gifts to state governments and not-so-shovel-ready public works has not only failed to multiply itself as promised, but simply evaporated.

And new, lasting growth is not going to come as long as the president is determined to browbeat business, punish success, build a permanently larger public sector, suck the middle class into the welfare state, and otherwise impose his notion of fairness as national economic policy.

If you believe otherwise, you haven’t been paying attention the last two and a half years.

– By Kyle Wingfield

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111 comments Add your comment

F. Sinkwich

July 29th, 2011
12:16 pm

How’s that Hope and Change working out for y’all?

F. Sinkwich

July 29th, 2011
12:17 pm

Oh, that’s right, it’s Bush’s fault.

saywhat?

July 29th, 2011
12:25 pm

*”The growth Obama and the Pelosi-Reid Congress tried to stimulate through timid tax cuts, gifts to state governments and not-so-shovel-ready public works has not only failed to multiply itself as promised, but simply evaporated.”*

Alot of the “timid tax cuts” were unnecessary and were dictated by pressure from the right, despite the fact that 10 years of tax cuts has failed to create jobs or stimulate the economy. The “gifts to states” you decry helped prevent major fiscal meltdowns at the worst possible moment in many states, giving them time to recover, and led to the initial arresting of the freefall the economy was in when Obama took office.If anything was really timid, it was the amount given to publics works projects. This was the one area where stiimulus could have done the most good, and had the longest lasting effect, but alas, the same right wing influence prevented this from happening as well.

*”And new, lasting growth is not going to come as long as the president is determined to browbeat business, punish success, build a permanently larger public sector, suck the middle class into the welfare state, and otherwise impose his notion of fairness as national economic policy.”*
How have businesses managed to have record profits depite this alleged browbeating? How is raising the top marginal tax rate back to what it was during the Clinton years “punishment” when the economy did much better than after the top rate was reduced? By “welfare state” I am assuming you mean the advent of the Affordable Healthcare Act. Why has every first world nation with nationalized healthcare not had it drag down their economies? Germany is doing well, and they have had nationalized healthcare a long time.

Coming out the worst financial crash in 90 years, recovery was always predicted to be slow. Maybe you need to pay more attention to the last ten years to better understand the last two.

that's goofy

July 29th, 2011
12:29 pm

This mess began in 2005 – 2006. Since that time we’ve had A Republican President and a Democrat President. We’ve had Congress controlled by Republicans, Democrats and to a lesser degree Tea Party.

The intellectually lazy way is to blame one President or one party. The truth – it is “we” that keep electing people unwilling to make the right choice. Not the right choice to stay in power the right choice for all of us.

Country before party… learn it, live it, love it.

Logical Dude

July 29th, 2011
12:31 pm

Kyle says: The growth the Federal Reserve has tried to stimulate through its easy monetary policies has been consumed by the inflation those policies have wrought

Wait, you say that growth is minimal, but now you say there in inflation? OY! (not meaning to misread anything, but this sentence just stood out as “WFT?”)

duckcheney

July 29th, 2011
12:31 pm

yeah kyle, let’s go back to the gwb era –
- constantly raising the debt ceiling
- tax cuts for rich (that was supposed to create jobs, but wait there were ZERO jobs created during the Bush regime)
- medicare part D (where did this money come from??)
- Let’s not forget TARP – the gwb bailout of his rich buddies
- Oh, and he lied us into war and hid it from the general budget

ByteMe

July 29th, 2011
12:32 pm

If you believe otherwise, you haven’t been paying attention the last two and a half years.

So that’s the limit for how far back conservatives can remember? LOL!

Shovel Ready Jobs and other Tales

July 29th, 2011
12:32 pm

I want to ask a serious question: how much of a tax rate on the “wealthy” is “fair”? I wonder how Obama would answer this question, since he is advocating an increase. Given the apparent validity of the Laffer curve, it is important for everyone to state what they think is the optimal tax rate. For Democrats, this would perhaps help them realize that little more than a fraction of projected deficit will be reduced by a tax hike and that spending cuts are going to be far more instrumental in doing this.

Shovel Ready Jobs and other Tales

July 29th, 2011
12:35 pm

“The intellectually lazy way is to blame one President or one party. The truth – it is “we” that keep electing people unwilling to make the right choice.”

You are too kind. Finger-pointing is not what I would call being intellectually lazy, but intellectually dishonest.

Point/Counterpoint

July 29th, 2011
12:36 pm

Now now, I’m sure as soon we can get gay marriage abolished, repeal Roe v. Wade, permanently disband ALL unions and get taxes to zero, the economy will come roaring back. We just have to give the GOP time to work out their differences (With each other).

Point/Counterpoint

July 29th, 2011
12:39 pm

Shovel ready – “I wonder how Obama would answer this question, since he is advocating an increase.”

You should ask him since he is considerd to be “wealthy”. Although I’m sure whatever it is won’t affect you, as I highly doubt you are in his income bracket.

stranger in a strange land

July 29th, 2011
12:41 pm

but no matter what the next dreary headline is, it will start with…”In an unexpected, unforeseen development…”

stranger in a strange land

July 29th, 2011
12:44 pm

shovel ready – to the question how much is ‘fair’? The answer in the form of another question is: “how much do you have”?

kayaker 71

July 29th, 2011
12:49 pm

Peggy Noonan’s column in the WSJ today is spot on. Her previous offering chided the President to just “get out of the way” in the debt crisis negotiations saying he is part of the problem, not the solution. Taking credit for what others have done, appearing to be the adult in the conversations while he was offering no solutions of his own. Her column today presses the issue even further. She states that while previous presidents were mistaken for some of their misdeeds, at least there was a part of the American electorate that liked them despite their shortcomings. Even at the height of the Monica scandal, there was a segment of America that shook their head, smiled wryly and wondered how Clinton could eat pizza, talk to some general about troop deployments and get a BJ all at the same time. Some called it stupidity while others labeled it multitasking. But at least, by a segment of the electorate, he was liked. Bush also. Despite his country cowboy ways, a pretty large segment of the population forgave him for his shortcomings and accepted him for who he was. Fast forward to Bozo. I cannot name, nor could Noonan, a segment of the population who genuinely likes this guy. No one says that he has to be a Reagan carrying 49 of 50 states in a presidential election……. that will not come again in our lifetime, if ever. Bozo is just not likeable…… some of it has to do with trust, some with being genuine, some even with telling the truth….. but the more that time goes by, his arrogant, narcissistic demeanor is taking it’s toll on the electorate. He is becoming more “unlikeable” by the day. His fringe groups hang onto him for what they can get from him and his policies. But having him over for dinner or sharing a beer….. not on your life.

ByteMe

July 29th, 2011
12:54 pm

Despite his country cowboy ways, a pretty large segment of the population forgave him for his shortcomings and accepted him for who he was. Fast forward to Bozo.

So… I was right. Conservative memories only go back 2.5 years at best.

Meanwhile Kayaker mistakenly thinks anyone wants to have a beer or dinner with him.

kayaker 71

July 29th, 2011
1:01 pm

ButeMe,

You weren’t invited. I pick my dinner companions a little more carefully than that.

jconservative

July 29th, 2011
1:02 pm

Wait! I thought extending the Bush & Obama Tax Cuts last Dec 17 was going to take us to the green pastures?

I know increasing spending has not taken us to the green pastures. And it looks like tax cuts have not taken us to the green pastures.

Just for the hell of it, lets try cutting spending for a change. We haven’t tried that in over 80 years.

And while we are at it lets try raising taxes; lowering taxes for the last 30 years hasn’t worked, maybe raising taxes will.

Worth a try!

ghp_fan

July 29th, 2011
1:06 pm

saywhat? – you took the words right out of my mouth.

I don’t comment on this forum much, and I generally feel Kyle isn’t too far out on the wacky fringes…. but to Kyle I say:. I have been paying attention and I’m not crazy over the top a Democrat or Obama fan….. given that, I disagree much with what you [Kyle] say in this piece. However saywhat? pretty much summed up what would’ve been my response.

ghp_fan

July 29th, 2011
1:12 pm

I don’t think we should raise taxes on the rich.
But I do think we should take away the tax cut on the rich.

Take away the big tax credit they’ve had the last several years – get rid of that loophole. It was never permanent anyway.

I think they should just let the Bush tax cuts expire when the time comes – for everyone. It mostly benefited the wealthy anyway. They don’t even have to pass legislation to make that happen.

Jefferson

July 29th, 2011
1:13 pm

Congress gets most of the blame. The GOP will never accomplish anything but failure with their agenda. We didn’t have this problem before.

ghp_fan

July 29th, 2011
1:17 pm

For those blaming Obama for this debt ceiling issue…. seems he hasn’t had any legislation to sign regarding that. The blame needs to reside with the Congress. It all starts there.

real john

July 29th, 2011
1:31 pm

Jefferson:

So if Congress is to blame, than I guess the Democrats would be to blame from 2006-2010?? You know, the worst part of our recession??

jconservative

July 29th, 2011
1:47 pm

From the 14th Amendment:
“The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned.”

“The validity of the public debt of the United States, authorized by law…”

Authorized by law. I believe every dime of the public debt has been authorized by Congress.

Congress tells the president how much he can spend and the president spends it. And he must spend it, he cannot decide not to spend some money and put it in his bottom left hand drawer.

But does this mean the president has the authority to borrow the money needed to pay the nations’ bills?

Does this mean that Congress is in violation of the Constitution if they do not pay “… the public debt of the United States…”?

Per existing law only Congress can raise the Debt Limit and authorize the President to borrow.

Why do we even have a debt limit? Every nickle spent is authorized by Congress. Why does Congress need a law to tell them they are spending to much? Would they not know that?
(Yeah I know, dumb question.)

Finn McCool

July 29th, 2011
1:47 pm

We told you from 2001 – 2008, it was going to take a loooong time to get out from the whole dug by the combination of Bush and the 1994-2006 Republican-controlled Congress.

It’s going to take more than 3 years, then we can elect Republicans again and dig another hole just like this one.

Kyle Wingfield

July 29th, 2011
1:50 pm

saywhat? @ 12:25: “Pressure from the right”? Which “right”? In February 2009, there was no tea party, and barely enough GOP presence in the Senate to sustain a filibuster — had it even come to that. What did it take to get three Senate Republicans to vote for the bill? According to a contemporary account from the NYT: “Democratic senators suggested they would be open to altering the bill to reflect Republicans’ ideas on housing and spending for infrastructure.”

http://www.nytimes.com/2009/02/02/us/politics/02obama.html?ref=business

So, the Republican ideas that Democrats were considering — and I use “Republican” loosely, since Arlen Specter switched parties not long afterward — were to make the bill spend more on infrastructure! Not to “prevent [said spending] from happening.” (Btw, the part about housing, meaning enlarging and broadening the new homebuyer tax credit already under discussion, didn’t even come to fruition…which is just as well.)

The money sent to the state governments didn’t preclude their eventual pullback, but only delayed it. That’s not an “investment” or a way to “stimulate” growth. It’s the same kind of “borrow now, figure out how to pay for it all later” attitude that has brought us to the present debt crisis.

Yes, many large businesses are profitable, but they’re not eager to expand. You may say it’s because there’s a lack of demand now. I say it’s because they see no reason to think there’s going to be much more demand in the foreseeable future — but what they do see are reasons to believe Washington is going to make their existing costs go up. They hear the president attacking industries — e.g., energy — for political reasons rather than economically sound ones. In short, they’re loath to invest their current profits to expand their businesses because they don’t like their chances of profitability down the road.

And yes, I was referring to the health reform. Maybe you’re not aware of this, but Germany and the other countries to which you refer have, for the past 40 years or so, grown at a significantly slower pace than the U.S. has. Two percent a year vs. 3 percent a year may not sound like a lot, but it’s the difference between doubling your economy every 24 years vs. every 36 years. Which is a big deal.

President Obama is not to blame for the economy he inherited, but he is responsible for those actions which are inhibiting its recovery, and those done in the name of recovery which did little to help but came at great cost.

Point/Counterpoint

July 29th, 2011
1:56 pm

I miss the old Boehner, you know one who said ” we asked him for a plan, not a speech, a plan”. Yes John, could you and your dysfunctional children please hurry up with a plan, the clock is ticking.

Exit strategy

July 29th, 2011
1:59 pm

At least it is positive growth. And for the Republicans on here bitching and moaning about the economy, how have our policies deviated from the George Bush years? We still have the Bush tax cuts, there isn’t more regulation on corporations (although the CEOs tell you that – they will only be happy with NO regulations), Obama has continued the spending habits of the Bush years. The answer is to responsibly bring cut spending, increase taxes (on all – shared sacrifice) and suck it up on not cutting government jobs until the economy is on a more sure footing, then start the cuts. A good place to start would be congressional staff, allowances, and pay.

ByteMe

July 29th, 2011
2:08 pm

President Obama is not to blame for the economy he inherited, but he is responsible for those actions which are inhibiting its recovery, and those done in the name of recovery which did little to help but came at great cost

Written like someone who thinks this is a normal “business cycle recession” and not a “credit crisis recession”. The two are very different and the speed at which we come out of it are different. BUT… the one thing that DOES speed a credit crisis recovery along is for government to throw money at the problem to increase demand. Of course, for the wingnuts, that’s strictly verbotten.

Point/Counterpoint

July 29th, 2011
2:12 pm

Good points Exit. People tend to forget that the debt ceiling is tied to money already spent. Money that was approved by Congress, sent to the President and then spent as directed. I’m all for a rational, productive debate on SPENDING, and I would hope that we could trim a lot of fat. However, tryng to morph the debt and spending protocols together and tie them to the increase was a bad move. Unfortunately, we are witnessing the result of poor planning but good intentions. And I believe we all know which road is paved with good intentions.

Ayn Rant

July 29th, 2011
2:13 pm

Place the blame for America’s continuing downward spiral where it belongs : the Republican political party with an outmoded dogma, an aversion to facts and reason, and lock-step party discipline.

Our government structure is designed for conscientious, free-thinking, responsible elected representatives, not dogmatic, disciplined political party hacks. We need a parliamentary system of government if we want to be governed by political parties, rather than distinguished representatives.

Point/Counterpoint

July 29th, 2011
2:18 pm

I’m not sure there’s a more simple analogy than this when it comes to the actual purpose of the debt ceiling increase. You go to bloick buster and buy a 65 inch television complete with surround sopund, blue ray, wireless streaming etc… you then pay for all warranties and extensions. You pay for all of this using your Best Buy card. However, when the bill comes from Best Buy asking for payment, you suddenly throw a fit about having to pay the bill, and then justify your position by saying that you need to reign in your spending before you will send them one red cent.

Moderate Line

July 29th, 2011
2:21 pm

The Republicans have had the balance power of the last 11 years.
2001 P-Rep,H-Rep,S-Rep
2002 P-Rep,H-Rep,S-Rep
2003 P-Rep,H-Rep,S-Rep
2004 P-Rep,H-Rep,S-Rep
2005 P-Rep,H-Rep,S-Rep
2006 P-Rep,H-Rep,S-Rep
2007 P-Rep,H-Dem,S-Dem
2008 P-Rep,H-Dem,S-Dem
2009 P-Dem,H-Dem,S-Dem
2010 P-Dem,H-Dem,S-Dem
2011 P-Dem,H-Rep,S-Dem
In the pass 11 Years the Rep have controled the Presidency 72%, the Senate 54.5%, the house 63% but yet our current state which began after the Rep controlled the Presidency, Senate and the House for 6 straight years is all Obama’s fault. This is hard to believe.

I don’t believe Obama has done a great job or even a mediocre job but the Republicans did much worse with more control.

I am not optimistic that either a change in to Republican control or more the same will make much of a difference.

Moderate Line

July 29th, 2011
2:25 pm

Ayn Rant

July 29th, 2011
2:13 pm
Place the blame for America’s continuing downward spiral where it belongs : the Republican political party with an outmoded dogma, an aversion to facts and reason, and lock-step party discipline.

Our government structure is designed for conscientious, free-thinking, responsible elected representatives, not dogmatic, disciplined political party hacks. We need a parliamentary system of government if we want to be governed by political parties, rather than distinguished representatives.
++++
I very good point. A parlimentry system does not have this problem. Also, Boehner would have been dumped in a no confidence vote.

Moderate Line

July 29th, 2011
2:36 pm

Kyle Wingfield

July 29th, 2011
1:50 pm
President Obama is not to blame for the economy he inherited, but he is responsible for those actions which are inhibiting its recovery, and those done in the name of recovery which did little to help but came at great cost.
++++
An interesting confession. Why would we expect the Republicans to be any better at getting us out of the mess they essentially got us into? After all those tax cuts our economy still crashed and even when it was growing it was growing as fast as when Clinton was President.

The cut taxes = growth formula did not seem to work and neither did the spend = growth so what faith should I have that the Republicans have the answer. Also, note even though Obama has a poor record on balancing the budget the Republicans do not have one any better. Under Bush we went from collecting more taxes than we spent to the opposite. Bush was dealt a royal flush and turned it into a 10 high. Obama inherited a 10 high and now it is an A high.

Point/Counterpoint

July 29th, 2011
2:39 pm

Moderate Line – “Why would we expect the Republicans to be any better at getting us out of the mess they essentially got us into?”

Because all that really matters is clearing the election and then everything after that will be pure gravy. No more debt, almost no unemployment, never again will we need to raise the debt ceiling. If only the GOP can take the Whitehouse back in 2012, all our problems will magically disappear.

ByteMe

July 29th, 2011
2:42 pm

Bombthrowers are better at being in the minority party and not having to actually govern.

Just ask Newt. Or maybe don’t ask, since he’ll just make something up to make him look better than he really was.

Douglas

July 29th, 2011
2:47 pm

Byteme said “the one thing that DOES speed a credit crisis recovery along is for government to throw money at the problem to increase demand”

The stimulus threw almost a trillion dollars down the drain without speeding the recovery. The Obama, Pelosi, Reed policies of the last few years should definitively prove the Keynesian economic policies to be the joke that they are …….. but then I guess they would have worked had it not been for George Bush.

midtownguy

July 29th, 2011
2:48 pm

I was late to lear that only two modern democratic countries have a “debt ceiling”, the United States and Denmark. Spending is controlled by the annual budgeting process by congress. What purpose does the ceiling serve when the debt/obligations have already been incurred?

Kyle Wingfield

July 29th, 2011
2:51 pm

Moderate Line @ 2:36: I didn’t think acknowledging that President Obama wasn’t personally to blame for the state of the economy on Jan. 20, 2009, was any kind of “confession.”

Point/Counterpoint

July 29th, 2011
2:54 pm

midtownguy – “What purpose does the ceiling serve when the debt/obligations have already been incurred?”

Tradition mostly. :)

Joe Friday

July 29th, 2011
2:59 pm

We know why the economy is stalling. Because the Party of No has blocked every effort to get it moving again. Their stated mission is to see Obama fail, and the way to make Obama fail is to block economic growth. When Obama signs on, they’re against it.

Tea Party Republican Jim DeMint and others loved RomneyCare, campaigned for it, until they were against it.

The Heritage Foundation and Republicans loved mandates, until they were against it.

McCain and Palin and Republicans campaigned on Cap and Trade, until they were against.

Republicans supported stimulus and advocated for it under Bush, until they were against it.

Republicans supported infrastructure spending, until they were against it.

And Republicans voted for decades for clean debt-ceiling increases, until they were against it.

Anybody who is paying attention, knows that these nihilists don’t care about jobs, deficits, small government, or any of the things they claim. They’re extortionists. They care about the power and money. Period.

midtownguy

July 29th, 2011
3:00 pm

I say forget all this political posturing over the “debt ceiling”, raise it to as much as it needs to be to enable us to pay our bills on time and start serious discussions about spending cuts for Federal Fiscal Year 2012 and moving toward living within our means. This is all just pure political theatre designed to influence the next elections.

Shovel Ready Jobs and other Tales

July 29th, 2011
3:02 pm

“Written like someone who thinks this is a normal “business cycle recession” and not a “credit crisis recession”. The two are very different and the speed at which we come out of it are different. BUT… the one thing that DOES speed a credit crisis recovery along is for government to throw money at the problem to increase demand. Of course, for the wingnuts, that’s strictly verbotten.”

I guess Obama is absolved of any mistakes in your mind (though he himself admits them for his party) because of the recession. And I don’t think many people are arguing that the stimulus programs helped the economy much, if at all. But don’t let anyone confuse you with facts.

Gillislee

July 29th, 2011
3:04 pm

Hope and Change? Bwahahahaha, suckers………..

Joe Friday

July 29th, 2011
3:10 pm

Wingfield wrote that industry sees reasons to believe Washington is going to make their costs go up. That’s because they listen to lies spread by the likes of Rush Limbaugh and Sean Hannity.

I’ll give you an example of these lies. Every talk radio/Fox News/WSJ addict I listen to claims that gas prices are up because Obama made oil companies stop drilling. In other words, these bubble boys and girls think that Obama shut down existing wells. They think there’s less drilling in this country. The exact opposite is true, but plutocrats and their pundits make up their own facts and then use them to make the case that, Mr. business owner, that scary Obama socialist guy is going victimize you the way he victimized those poor little oil companies.

The only uncertainty that’s hurting the economy is that caused by hostage takers in the House of Representatives. Notice how they’re fighting tooth and nail to keep the uncertainty alive.

midtownguy

July 29th, 2011
3:10 pm

Biggest political mistake made by the Democrats in my lifetime: Nominating Obama over Hillary. Either would have beaten McCain/Palin. We would not be in this mess if the Clinton’s were in charge.

Jefferson

July 29th, 2011
3:12 pm

Real John, I suspect you much like McConnell want a failed presidentcy. I’d rather the country do well no matter what party is in power. Its easy to spot a duck.

Repubs screwed the Stimulus

July 29th, 2011
3:19 pm

Douglas
July 29th, 2011
2:47 pm
The stimulus threw almost a trillion dollars down the drain without speeding the recovery. The Obama, Pelosi, Reed policies of the last few years should definitively prove the Keynesian economic policies to be the joke that they are …….. but then I guess they would have worked had it not been for George Bush.

You do realize that almost 40% of the stimulus was for tax cuts (but they create jobs!!). And some of the other stimulus money was flat out refused by the Republican governors in the this country. Obama, Pelosi, et al tried to build trains in this country, to not make us so dependent on the fluctuations of oil prices, but the Republicans wanted no part. (And BTW, drilling is not the answer. Oil companies will just charge the same. Look what the airlines are doing with the tax cuts right now!)

Truth

July 29th, 2011
3:22 pm

Balanced Budget Amendment

Repeal the amendment dealing with income taxation and change to Fair Tax

Problem Solved!

John Birch

July 29th, 2011
3:23 pm

These revisions are evidence of the unreliability of numbers from the GAO, CBO, etc. Kind of like Obamacare being deficit neutral.