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The Year In Review: The Economy

- December 19, 2011

2011 Was The Year That Obama’s Recovery Failed To Show Up

THIS YEAR, OBAMA CAME TO TERMS WITH THE FACT THAT HE WON’T BE ABLE TO RUN ON HIS FAILED RECORD FOR REELECTION

The White House Is Concerned That The Economy Stands In The Way Of A Second Term, As “One Obama Adviser Conceded, ‘The Numbers Add Up To Defeat.’” “Privately, however, Obama’s team is concerned about the factors beyond its control, talking of an imminent need to retool their economic message and strategy heading into 2012. Absent the president’s ability to defy political gravity, one Obama adviser conceded, ‘The numbers add up to defeat.’” (Jim VandeHei and Mike Allen, “Obama’s Big Drags,” Politico, 8/4/11)

  • Politico: “Obama Has Few, If Any, Domestic Achievements That Enjoy Broad Public Support. No One Assumes Employment, Growth Or Housing Prices To Pick Up Much, If At All ….” (Jim VandeHei and Mike Allen, “Obama’s Big Drags,” Politico, 8/4/11)

Recent Data “Paint A Picture Of An Economy Stuck In Low Gear” Dashing Hopes That Economy Could Run For Reelection On His Economic Success. “The Obama team has long hoped that the president’s 2012 campaign would be underpinned by an economy that was clearly accelerating out of the Great Recession, showing strong growth and job creation. But recent economic data paint a picture of an economy stuck in low gear, held down by continued high personal debt, a moribund housing market, high food and gas prices, persistent weather disasters and widespread unease about what the future holds.”  (Ben White, “Economy May Hurt Obama '12,” Politico, 5/31/11)

  • “The Messages Of Hope And Change…Will Have To Evolve.” “The dismal numbers mean Obama and his advisers are looking at a tough campaign filled with new challenges. The message of hope and change that brought in 365 electoral votes to John McCain's 173 will have to evolve.” (Charles Riley, “Swing State Economies Complicate 2012 Picture,” CNN Money, 12/1/11)

“Only 9% Of Voters In 12 Key Swing States Say Economic Conditions Are Good Or Excellent.” “Only 9% of voters in 12 key swing states say economic conditions are good or excellent, according to a Gallup survey released in early November. And 72% say the economy is getting worse, not better. Voters in those states slightly favor a Republican on unemployment, and Republicans also have a double digit lead on who would better handle the federal budget deficit and debt.” (Charles Riley, “Swing State Economies Complicate 2012 Picture,” CNN Money, 12/1/11)

OBAMA’S ROSY PREDICTIONS OF GROWTH FAILED TO PAN OUT IN 2011

The Washington Post’s Fact Checker Said “Obama Is On Track To Have The Worst Jobs Record Of Any President In The Modern Era.” “Unless the economy turns around in the next 18 months, Obama is on track to have the worst jobs record of any president in the modern era. That would be an accurate statement.” (Glenn Kessler, “Rick Perry’s Claim That Obama Has ‘Killed More Jobs’ Than Any Other President,” The Washington Post’s “The Fact Checker”, 8/22/11)

“Economic Growth Never Lived Up To The Expectations” Of The Obama White House. “And because economic growth never lived up to the expectations set early by different White House officials at different times – remember ‘the summer of recovery’? – voters simply don’t have the money or confidence to buy big things like they use to.” (Jim VandeHei and Mike Allen, “Obama’s Big Drags,” Politico, 8/4/11)

The Policies Obama Thought Were His Biggest Accomplishments Remain Deeply Unpopular. “A big hurdle for the president is the unpopularity of the very policies that his team thought would be big accomplishments in the first term. Polls show his economic policy, the health care law and the auto bailout gets positive reviews from fewer than half of voters. Hard to see how that changes.” (Jim VandeHei and Mike Allen, “Obama’s Big Drags,” Politico, 8/4/11)

FLASHBACK: In 2009, Economists Warned That Obama’s Economic Predictions Were Too Optimistic. “President Barack Obama’s economic forecasts for long-term growth are too optimistic, many economists warn, a miscalculation that would mean budget deficits will be much higher than the administration is now acknowledging.” (Jeanne Cummings, “Some Economists Warn Barack Obama’s Economic Predictions Too Optimistic,” Politico, 7/14/09)

  • Economic Experts Described The Obama Administrations Forecasts As “Rosy” And “Fantasy.” “But a series of POLITICO interviews in recent days with independent economists of varied political stripes found widespread disdain for Obama’s first round of assumptions, with some experts invoking such phrases as ‘rosy’ and ‘fantasy.’” (Jeanne Cummings, “Some Economists Warn Barack Obama’s Economic Predictions Too Optimistic,” Politico, 7/14/09)

The Obama Administration Was Forced To Downgrade Their Projections For 2012

The White House Predicts Unemployment Next Year Could Remain Higher Than 8 Percent Meaning No Job Growth After “The Biggest Stimulus Package In The History Of The World.” “The White House anticipates unemployment at 8.25 percent and Goldman Sachs and others warn the number could be higher — close to 9 percent, which would mean no net job growth after the biggest stimulus package in the history of the world.” (Jim VandeHei and Mike Allen, “Obama’s Big Drags,” Politico, 8/4/11)

  • 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)

“At This Pace, It Will Take Until The End Of 2016 For The U.S. To Replace All The Jobs Lost During The Recession That Ended Two Years Ago.” “This continues the recent trend of a slowly improving job market, consistent with a tepid recovery but no recession. In 2011, the economy has added about 120,000 jobs a month. At this pace, it will take until the end of 2016 for the U.S. to replace all the jobs lost during the recession that ended two years ago. After the previous seven post-World War II recessions, it took the economy on average about two to three years to recover job losses.” (Editorial, “When 9% Is A Relief,” The Wall Street Journal, 11/7/11)

OBAMA ADMITTED HIS HOUSING POLICIES LET DOWN MILLIONS OF AMERICANS STRUGGLING TO KEEP THEIR HOMES

“This Summer At The White House, Obama Offered A Rare Acknowledgment That His Response To The Housing Crisis Had Fallen Short.” (Zachary A. Goldfarb, “Obama’s Efforts To Aid Homeowners, Boost Housing Market Fall Far Short Of Goals,” The Washington Post, 10/23/11)

  • Obama Said That Housing Has Been The “Most Stubborn In Us Trying To Solve The Problem.” “Asked what mistakes he had made in handling the recession and what he would do differently, he said: ‘We had to revamp housing several times to try and help people stay in their homes and try to start lifting home values up. Of all the things we’ve done, that’s probably been the area that’s been most stubborn in us trying to solve the problem.’” (Zachary A. Goldfarb, “Obama’s Efforts To Aid Homeowners, Boost Housing Market Fall Far Short Of Goals,” The Washington Post, 10/23/11)
  • President Obama Said “I’ll Be Honest With You, [Housing] Is Probably The Biggest Drag On The Economy Right Now.” “‘I’ll be honest with you, this is probably the biggest drag on the economy right now,’ Obama replied to a questioner at an economic forum in Palo Alto, Calif., who lamented that the ‘housing crisis will not go away.’” (Abby Phillip, “Housing Crisis Back On President Obama’s Agenda,” Politico, 7/11/11)

Treasury Secretary Geithner: “But Our Programs Have Dramatically Underperformed What We Thought. … We Are Very Disappointed And Frustrated By It And We Have A Lot Of Challenges Ahead.” (Treasury Secretary Timothy Geithner, Testimony Before The House Financial Services Committee, Washington, D.C., 10/6/11)

PROMISE: President Obama Promised That His Housing Program Would Prevent 7 To 9 Million Families From Foreclosure. “And we will pursue the housing plan I'm outlining today. And through this plan, we will help between 7 and 9 million families restructure or refinance their mortgages so they can afford—avoid foreclosure.” (President Barack Obama, Remarks On The Home Mortgage Industry In Mesa, Arizona, 2/18/09)

FACT: Obama Has Only Helped 1.7 Million Avoid Foreclosure Of The 9 Million Homeowners He Promised. “President Obama pledged at the beginning of his term to boost the nation’s crippled housing market and help as many as 9 million homeowners avoid losing their homes to foreclosure. Nearly three years later, it hasn’t worked out. Obama has spent just $2.4 billion of the $50 billion he promised. The initiatives he announced have helped 1.7 million people.” (Zachary A. Goldfarb, “Obama’s Efforts To Aid Homeowners, Boost Housing Market Fall Far Short Of Goals,” The Washington Post, 10/23/11)

  • The Administration’s Foreclosure Prevention Programs “Have Had Little Impact On The Overall Housing Sector.” “The administration is already using taxpayer funds from its $700 billion bank bailout program to help prevent foreclosures and give struggling Americans a reprieve on their mortgage payments. But the programs have had little impact on the overall housing sector.” (“White House Says Needs To Deal With Housing Problems,” Reuters, 6/5/11)
  • “To Date, Administration Programs Have Permanently Reduced The Debt Of Just One Tenth Of 1 Percent Of Underwater Borrowers.” (Zachary A. Goldfarb, “Obama’s Efforts To Aid Homeowners, Boost Housing Market Fall Far Short Of Goals,” The Washington Post, 10/23/11)

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