Barack Obama's Sad Record on Economic Growth
On Friday, the Bureau of Economic Analysis (BEA) reported that 2015 U.S. real GDP (RGDP) growth was 2.38%. No matter what revisions are subsequently made, 2015 will have been the tenth year in a row that RGDP growth came in at under 3.0%. The longest previous such run in U.S. economic history was only four years, and the last time that this happened was during the Great Depression (1930 - 1933).
Even worse, and this should be the defining issue of the 2016 elections, the Congressional Budget Office (CBO) is now forecasting that America will never see 3.0% economic growth again. This should be drawing howls of protest, at least from Republicans, but there has been little reaction thus far.
From 1790 to 2000, U.S. RGDP growth averaged 3.79%. America needs at least 3.0% economic growth-the nation cannot defend itself and pay its bills without it. However, America's elites have largely given up on growth, and are now distracting themselves with academic musings about "secular stagnation."
Hillary Clinton is trying to position herself as the logical heir to President Obama's "legacy." Hillary is asking the voters to give her the job of protecting and continue Obama's "achievements." In a way, what Hillary is trying to do is odd, but in another way, it isn't. Here's why.
The rate of real economic growth is the single greatest determinate of both America's strength as a nation and the wellbeing of the American people. And, Obama's record in this area has been truly dismal.
Right now, the nation is probably already in a recession. The BEA's first estimate of 4Q2015 RGDP growth was only 0.69%, and there is mounting evidence that this will later be revised downward. However, making the wildly optimistic assumption that 2016 RGDP growth will come in at the CBO's current forecast (2.67%), Obama will be the only U.S. president in history that did not deliver a single year of 3.0%+ economic growth.
Again, assuming 2.67% RGDP growth for 2016, Obama will leave office having produced an average of 1.55% growth. This would place his presidency fourth from the bottom of the list of 39*, above only those of Herbert Hoover (-5.65%), Andrew Johnson (-0.70%) and Theodore Roosevelt (1.41%)
No matter what happens in 2016, Obama's record on economic growth will be considerably worse than that of the much-maligned George W. Bush. Bush 43 delivered RGDP growth averaging 2.10%, with two years (2004 and 2005) above 3.0%.
By the way, the economic growth superstar among all U.S. presidents was none other than Rutherford B. Hayes (1877 - 1880). Hayes delivered an average of 7.71% RGDP growth, and none of his four years in office was below 3.0%.
So, it seems a bit surprising that Hillary Clinton would be running for president by promising the nation the equivalent of a third Obama term. However, in another way, it isn't.
Hillary is a progressive. Progressives believe in "progressively" expanding the size, power, and reach of government. And, Obama has done more to further the progressive cause of anyone since FDR. So, yes, in that sense, it is completely authentic for Hillary to be promising "more Obama" if she wins.
With respect to the economy, both Hillary Clinton and Bernie Sanders are offering what amounts to "hospice care." Their "tax the rich" redistributionist proposals are not intended to restore strong growth. They are designed to make the middle class more comfortable in the face of economic stagnation. "Hey, you may be unemployed after you graduate, but at least college was free!"
The only way that the voters will elect a Democrat as president in the fall is if the Republicans nominate someone that seems crazy and dangerous, or if they run on budget-cutting "austerity." If confronted with a choice between hospice care and "surgery without anesthesia," the electorate will opt for the hospice care, and try to survive until the next election.
As the implications of the CBO's latest projections sink in, Republican candidates will hear the political Sirens singing songs about the need to "cut entitlements." If Republicans offer a credible program to restore rapid economic growth, they will win. If they offer austerity, they will lose-and, they will deserve to lose.
*There have been 44 presidents, but only 39 presidencies. Some terms were shared by two people, as a result of death or resignation.