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Better Off?

- October 4, 2011

Obama Admits That Americans Are Not Better Off Than They Were Four Years Ago

President Obama“Well I Don’t Think They Are Better Off Than They Were Four Years Ago. They’re Not Better Off Than They Were Before Lehman’s Collapse, Before The Financial Crisis, Before This Extraordinary Recession That We’re Going Through.” (ABC News/Yahoo News’ Live Interview, 10/3/11) 

Watch Obama Admit That Americans Are Not Better Off With Him As President

SEEKING SOMEONE ELSE TO BLAME FOR THE ECONOMY’S MALAISE, OBAMA SAYS AMERICA HAS “GOTTEN A LITTLE SOFT”

President Obama: “There are a lot of things that we can do. And the way i think about it is this is a great, great country that had gotten a little soft …” (President Barack Obama, WESH, 9/29/11)

Since President Obama Took Office, The Nation Has Lost 2.4 Million Jobs And The Unemployment Rate Has Increased From 7.8 Percent To 9.1 Percent. (Bureau of Labor Statistics, BLS.gov, Accessed 10/3/11)

  • Since The First $825 Billion Stimulus Was Passed, The Nation Has Lost 1.7 Million Jobs And The Unemployment Rate Has Remained Over 8 Percent For A Post-WWII Record 31 Straight Months. (Bureau Of Labor Statistics, BLS.gov, Accessed 10/03/11)

“From 2008 To 2010, North Dakota Was The Only State That Did Not Suffer A Decline In Either Its Median Family Income Or Total Employment.” “From 2008 to 2010, North Dakota was the only state that did not suffer a decline in either its median family income or total employment. Over that period, the median income declined in every other state, while the number of people at work fell everywhere else except in Alaska and Texas.” (Ryan Morris and Scott Bland, “Continent-Sized Storm,” National Journal, 9/29/11)

  • From 2008 To 2010, The Share Of People Living In Poverty Increased In Every State Except Montana.”  “From 2008 to 2010, the share of people living in poverty increased in every state except Montana (whose small improvement in its poverty rate was within the survey’s margin of error). In a dozen states, the proportion of residents living in poverty increased by at least 20 percent over just those two years; in another 25 states, the poverty rate increased by at least 10 percent.” (Ronald Brownstein and Scott Bland, “The Geography Of Pain,” National Journal, 9/29/11) 
  • “‘Everyone Is Under Some Type Of Water At This Point,’ Says Chris Christopher, A Senior Principal Economist For The Consulting Firm IHS Global Insight.” (Ronald Brownstein and Scott Bland, “The Geography Of Pain,” National Journal, 9/29/11) 

 “Personal Income Declined In August For The First Time In More Than Two Years.” “In another sign of Americans' economic struggles, personal income declined in August for the first time in more than two years, the Commerce Department reported Friday. Growth in personal income -- an individual's total earnings, including wages and investments -- has been sluggish for months. But the drop of 0.1% from July to August was the first since October 2009.” (Jim Puzzanghera, “Personal Income Declined In August For The First Time Since 2009,” Los Angeles Times’ “Money & Company,” 9/30/11)

  • The Census Bureau Reports That “Median Household Income In 2010 Fell To $49,445, The Lowest In More Than A Decade.” “The declines followed news from the Census Bureau that median household income in 2010 fell to $49,445, the lowest in more than a decade, and the poverty rate jumped to 15.1 percent, a 17-year high.” (Sho Chandra, “Falling U.S. Wages Threaten Consumer Spending,” Bloomberg, 10/3/11)

Those Who Are Employed Are Seeing Their Purchasing Power “Get Squeezed.” “‘Those who are employed are worried about their income and are seeing real purchasing power get squeezed, therefore they’re set to retrench a bit,’ said Julia Coronado, chief economist for North America at BNP Paribas in New York, who has served on the Fed board’s forecasting team. ‘That’s the danger right now. It means the recovery remains very fragile.’” (Sho Chandra, “Falling U.S. Wages Threaten Consumer Spending,” Bloomberg, 10/3/11)

The Decline In Wages Can Have A Negative Effect On Home Prices, Stocks And 401Ks. “The worsening outlook for incomes will cause ‘continued pressure on home prices and on the stock market,’ said Malcolm Polley, who oversees $1 billion as chief investment officer at Stewart Capital in Indiana, Pennsylvania. Corporate sales may be hurt as demand cools, and there may be more withdrawals from retirement plans and higher use of 401(k) loans, he said.” (Sho Chandra, “Falling U.S. Wages Threaten Consumer Spending,” Bloomberg, 10/3/11)

THE TROUBLED HOUSING MARKET CONTINUES TO PLAGUE THE ECONOMY LIKE AN “ALBATROSS” DUE TO THE FAILURE OF OBAMA’S POLICIES

“The Alphabet Soup Of Housing Assistance Programs To Date -- HAMP, HARP, EHLP, 2MP -- Have Been Too Poorly Administered And Too Limited In Scope And Eligibility To Slow Or Halt The Slide In The U.S. Housing Market.” “Only 2 percent of President Obama's speech to Congress on Sept. 8 dealt with the plight of underwater homeowners, but those 72 words could do as much or more for the flagging U.S. economy as the entire $447 billion jobs bill. Especially if the White House is willing to think big. That's a big if, given that the alphabet soup of housing assistance programs to date -- HAMP, HARP, EHLP, 2MP -- have been too poorly administered and too limited in scope and eligibility to slow or halt the slide in the U.S. housing market.” (Eric Wieffering, “Fixing economy Requires More Work On Housing,” Star Tribune, 9/17/11)

The Emergency Homeowners' Loan Program Is “The Most Recent Example Of Such An Effort Falling Short Of Goals.” “A federal initiative that gives bridge loans to homeowners struggling to make mortgage payments will likely pay out less than half the $1 billion that Congress allotted for the program, the most recent example of such an effort falling short of goals.” (Joseph De Avila, “Mortgage Aid Falls Short Of Its Goal,” The Wall Street Journal, 9/29/11)

  • Only 10,000 To 15,000 Homeowners Qualify For Aid. “Even after a Tuesday deadline for applicants to submit documentation was extended by two days, officials at the Department of Housing and Urban Development estimated that only about 10,000 to 15,000 homeowners will ultimately qualify. That would mean between $500 million and $670 million of the program's funds will be returned to the U.S. Treasury.” (Joseph De Avila, “Mortgage Aid Falls Short Of Its Goal,” The Wall Street Journal, 9/29/11)

 “Housing Remains The U.S. Economy’s Albatross.” (Justin Lahart, “Number Of The Week: The Economy’s Housing Albatross,” The Wall Street Journal’s “Real Time Economics,” 10/1/11)

  • Residential Investment Was Only 2.2 Percent Of GDP In Second Quarter. “In the second quarter, residential investment — money spent on building, adding to and maintaining homes — accounted for just 2.2% of GDP, according to the Commerce Department.” (Justin Lahart, “Number Of The Week: The Economy’s Housing Albatross,” The Wall Street Journal’s “Real Time Economics,” 10/1/11)
     
  • “That Was The Lowest Level Since 1945, When America Was On A War Footing.” (Justin Lahart, “Number Of The Week: The Economy’s Housing Albatross,” The Wall Street Journal’s “Real Time Economics,” 10/1/11)

“It Is Hard To See The Economy Returning To Health Until Housing Gets Better. And With A Glut Of Foreclosed And Distressed Homes Still On The Market, It Is Hard To See That Happening Anytime Soon.” (Justin Lahart, “Number Of The Week: The Economy’s Housing Albatross,” The Wall Street Journal’s“Real Time Economics,” 10/1/11)

“Nearly Half, 49 Percent Of Bank Risk Managers Said They Do Not Expect Housing Prices To Return To 2007 Levels Before 2020.” “Nearly half, 49 percent of bank risk managers said they do not expect housing prices to return to 2007 levels before 2020. Some 73 percent believe mortgage defaults will remain elevated for at least five more years. Furthermore, 46 percent expect mortgage delinquencies to increase over the next six months, and only 15 percent believe mortgage delinquencies will decline during that period.” (Steve Cook, “Bank Risk Managers Foresee Years Of High Foreclosures, Low Prices,” UPI, 10/3/11)

In August, New Home Sales Fell For The Fourth-Straight Month, The Weakest Pace In Six Months. “New-home sales fell for the fourth-straight month in August as the bursting of the housing bubble continues to plague the U.S. economy. Sales fell by 2.3% on a monthly basis to a seasonally adjusted annual rate of 295,000, the Commerce Department said Monday. It was the weakest pace in six months.” (Alan Zibel and Jeff Bater, “New Home Sales Drop,” The Wall Street Journal, 9/26/11)

  • Housing Starts Fell More Than Expected In August. “Housing starts fell more than expected in August as groundbreaking for both single-family and multi-family units dropped, suggesting the economy will not get help from residential construction anytime soon. Housing starts decreased the most since April, down 5.0 percent to a seasonally adjusted annual rate of 571,000 units, the Commerce Department said on Tuesday.” (Jason Lange, “August Housing Starts Fall More Than Expected,” Reuters, 9/20/11)

AMERICANS WILL BE LEFT TO DEAL WITH HARD TIMES FOR YEARS TO COME DUE TO THE OBAMA ECONOMY

The Economic Cycle Research Institute Predicts Another Recession. “For the months ahead, though, the ECRI's leading index is unwavering in its call for another recession, just two years after the last one officially ended.” (Jeff Cox, “Think The Economy’s Bad? ‘You Haven’t Seen Anything’,” CNBC, 10/3/11)

  • ECRI Head Economist Lakshman Achuthan: “Here's what ECRI's recession call really says: If you think this is a bad economy, you haven't seen anything yet.” (Jeff Cox, “Think The Economy’s Bad? ‘You Haven’t Seen Anything’,” CNBC, 10/3/11)

The Third Quarter Was The Worst Month For The S&P Since 2008 And The Fourth Quarter Doesn’t Look Any Better. “This past quarter was miserable for bullish U.S. stock investors. The bad news is, things may get worse before they get better. The S&P 500 .SPX fell about 14 percent in the third quarter -- losing about $1.7 trillion in market cap, according to Thomson Reuters Datastream -- as the U.S. economy struggled and a resolution to Europe's sovereign debt woes proved elusive. The quarter was the S&P's weakest since the fourth quarter of 2008, the peak of the financial crisis. Many analysts say persistent uncertainty overshadows any near-term value created by share price declines.” (Ryan Vlastelica, “Awful Quarter For Wall Street May Be Only The Beginning,” Reuters, 9/30/11)

Projections By The White House Office Of Management And Budget Downgrade Growth Forecast For 2012. “Now the bad news: The economy remains sloooow. The new document predicts 3.3% growth next year, not the 3.6% originally forecast. It's not projected to get above 4% in the near future, whereas in February it was forecast to get to 4.4% in 2013.” (Richard Wolf, “White House Projects Declining Deficit In 2012,” USA Today, 9/1/11)

  • The OMB’s Alternative Forecast Predicts That Unemployment Will Remain Above Nine Percent Through 2012. “In an effort to take into consideration changes in the economic climate that have occurred since June (turmoil in Europe, natural disasters domestically, etc....) OMB offers an "alternative economic forecast" along with the Mid-Session Review. Under that model, the unemployment rate takes even longer to decline, going from 9.0 percent in 2012, to 8.5 percent in 2013 to 7.8 percent in 2014. In 2016 it hits 6.1 percent.” (Sam Stein, “White House Report: Unemployment Rate Above 6 Percent Until 2016,” The Huffington Post, 9/1/11)

The CBO’s Estimates For Future Unemployment Are Higher Than January’s Due To “Weaker Economic Activity Expected For The Next Several Years.” “However, CBO’s projections of the unemployment rate for 2012 through 2016 are higher than they were in January because of the weaker economic activity expected for the next several years.” (“The Budget And Economic Outlook: An Update,” Congressional Budget Office, 8/24/11)

  • CBO Projects Unemployment Rate To Remain Above Eight Percent Until 2014. “The national unemployment rate – now at 9.1 percent – isn’t expected to drop below 8 percent until 2014, according to the report on the country’s budget and economic outlook.” (Seung Min Kim, “CBO Warns Of ‘Profound’ Challenges,” Politico, 8/24/11)
  • CBO: “[T]he Pace Of The Recovery Has Been Slow, And The Economy Remains In A Severe Slump.” (“The Budget And Economic Outlook: An Update,” Congressional Budget Office, 8/24/11)
  • CBO: “The Slowing In Growth In U.S. Output During The First Half Of 2011 Might Portend The Onset Of Another Recession.” (“The Budget And Economic Outlook: An Update,” Congressional Budget Office, 8/24/11)

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