The Clinton line, an elaboration of Obama excuse No. 37 for the dismal economy (after the Arab Spring, ATMs, the euro crisis and tomato blight in Mrs. Obama’s White House garden), goes like this: The economy was so damaged by George W. Bush-era policies that “no president” could have been expected to do better than the record-high poverty, staggering unemployment, shrinking workforce participation, anemic growth and gargantuan debt over which Barack Obama has presided.
We’re asked to believe that the Obama administration knew all along that things would take longer than four years to improve. “I never said this journey would be easy,” the president said in Charlotte. On the contrary, the president stated explicitly on Feb. 1, 2009, that if he failed to get the economy turned around in three years, he would be looking at a “one-term proposition.”
If the Obama administration knew from the start that the so-called “hole” left by the previous administration was too deep to climb out of in one term, why did they repeatedly claim that the recovery was at hand? “Recovery Summer,” the White House website promised, would begin in June 2010.
Treasury Secretary Tim Geithner authored a New York Times op-ed in August 2010 proclaiming “Welcome to the Recovery.” Geithner wrote, “(A) review of recent data on the American economy shows that we are on a path back to growth.” Though acknowledging continuing challenges, Geithner assured readers that “the actions we took … to stimulate the economy helped arrest the freefall, preventing an even deeper collapse and putting the economy on the road to recovery.”
Not true. The recovery actually began in June 2009, long before the overwhelming majority of stimulus funds had been spent. Few of those dollars went to construction and other so-called jobs programs anyway, as the president acknowledged later when he said he had learned that “shovel-ready projects” were not so. If Bush was responsible for the “hole,” but the Obama administration could take credit for the modest growth in 2010, how can Bush now be held responsible for the slump since 2010?
Geithner was on even shakier ground when, during a TV interview, he explained how the Bush administration had caused the crisis. “You saw the government of the United States living way beyond its means, borrowing with — from future generations to finance a set of programs and tax cuts, without paying for them.” Bush deserves blame for overspending, but no one lives in a more fragile glass house than Obama on that measure.
If Geithner and Obama knew in 2010 that the economy was too damaged by Bush to repair, why didn’t they say so then? The answer is obvious. They truly believed that a huge Keynesian spending program would work to stimulate the private economy. That misplaced faith was the reason Obama could confidently assure Matt Lauer that if the economy weren’t fixed in three years, he’d be held “accountable.”
Bill Clinton, true to his nature, misrepresented nearly every relevant fact about the economy for the past 30 years, and particularly for the past four. How else to cite “arithmetic” when praising a president who has rung up $5 trillion in new debt in one term? How else to count as “savings” $848 billion in money not spent on wars in Afghanistan and Iraq — as if those wars were projected to continue another decade?
But back to the financial crisis. That crisis was caused by the collapse of the housing bubble. If the severity of that crisis explains the struggling American economy under Obama, one would expect that those states most affected by the housing implosion would be in the most trouble. But as James Pethokoukis of the American Enterprise Institute has pointed out, the states that suffered the greatest losses in home values did not do noticeably worse during the recovery than those in which the housing crisis was milder.
A report by the San Francisco Federal Reserve found: “There’s almost no systematic relationship between employment growth and home price declines.” These findings, the report concludes, “indicate that the economy faces obstacles that are national in scope. The slow pace of expansion has affected all regions of the country. During the recovery, states where house price declines have been relatively mild have not done noticeably better than states where housing got hammered.”
The Democrats are hoping they can turn George W. Bush into Herbert Hoover and Barack Obama into Franklin Roosevelt. But as Bill Clinton once said about another Obama claim, it’s a “fairy tale.”