Mitt Romney has been going on about how we should be creating 500,000 jobs a month, so earlier we published a look at the number of jobs created per month in the good old days–the Bush Adminstration.
The bottom line?
On average, there were 20,000 jobs per month created in the 8 years of the Bush Administration. There were no months in which even 400,000 jobs were created, let alone 500,000.
So Romney’s blowing hot air.
But he’s blowing it in the right place.
Obama’s biggest weakness is still the economy and unemployment, so Romney’s smart to do whatever he can to blame Obama for the current situation.
And Obama did make one big mistake with respect to unemployment, which is that he overpromised and underdelivered.
Last fall, Ezra Klein of the Washington Post wrote an excellent treatise on how the American economy collapsed, what the government did about it, and what the government might have done differently that would have actually fixed it.
At the beginning of the article, Klein published what might be described as the chart that will get President Obama fired.
The chart (below) shows three lines:
- The incoming Obama Administration’s projections for what the unemployment rate would be if no stimulus was enacted in the depths of the financial crisis (light blue).
- The Obama Administration’s projections for what the unemployment rate would be with the President’s stimulus plan (dark blue).
- The actual unemployment rate (through early 2011).
The actual unemployment rate in the chart, you will note, is higher than the “nightmare scenario” initially envisioned by the Obama Administration (with no stimulus). In either case–stimulus or no stimulus–the unemployment rate was supposed to be down to 6% by now. And it’s actually above 8%.
As the chart makes instantly crystal clear, the Obama administration drastically underestimated how bad the economy was and drastically overestimated its ability to do something about it.
As a result of this, President Obama over-promised and under-delivered on the single most important challenge of his Presidency.
Also as a result, President Obama gave the Republicans ammunition to argue that his stimulus “failed,” when, in fact, it helped matters considerably (just not enough to fix everything).
Could the Obama Administration have fixed the economy in four years had they had done something different?
In my opinion, no.
Given the extent of the damage—and the kind of damage—that Obama inherited, this was always going to be a long slog. As a quick glance at debt-to-GDP charts show, this recession was not a run-of-the-mill cyclical recession. It was a debt-fuelled balance sheet recession. And if there’s one thing history shows about those, they take years if not decades to fix. (See Japan and the Great Depression).
But Obama certainly could have given himself a better chance to get re-elected despite the horrible economy. If Obama had recognised how bad things were, asked for a much bigger stimulus than he ended up asking for, and, importantly, set the appropriate expectations, he’d probably have been able to pin the blame for the mess where it belongs: On the three decades of decisions that facilitated the debt build-up that eventually culminated in the financial crisis.
Instead, however, Obama over-promised and under-delivered. And this will make it that much harder for him to get re-elected.
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