I received a note the other day from a social Democrat, who wrote:
“When Obama came to power the Dow Jones Industrial Average was 7,900, today it is over 17,000.
When he came to power, the Federal Budget deficit was 11% of gross domestic product (GDP), today it is 2.8%.
When he came to power, the economy was in a free fall and losing 8 million jobs, today it is growing and all the lost jobs have been recovered.
We are poised today to become the greatest energy producer in the world and North America will produce more oil and gas than the entire Middle East. Pennsylvania alone by next year will produce more gas than Qatar. It is estimated that the economy will grow 3.5-4% next year fueled in great part by the energy boom.
Inflation is low, interest rates are low, credit is becoming plentiful. Tourism has broken all records. What is it that makes you dislike him so much?”
It’s a good question. We must not let partisan politics interfere with our view of the economy.
Certainly, under Obama, the stock market has done well. In fact, when Democrats have been in the Oval Office, Wall Street tends to do better.
But that’s a superficial analysis. This time the recovery on Wall Street is due more to the Federal Reserve’s easy-money policies than the Executive Office of the President’s fiscal policies or leadership.
The energy boom in the United States has little to do with the Obama Administration. In fact, the White House has been trying to thwart the fracking-technology boom through Environmental Protection Agency (EPA) regulations, etc.
Certainly, fiscal policy has improved lately, with the budget deficit falling to under $400 billion this year. But that’s due to gridlock and the Republicans controlling the House more than responsible spending by the President.
Yes, the official unemployment rate has declined under Obama, but that’s largely because more adults and teenagers are dropping out of the labor force. The labor participation rate is at a 30-year low.
Moreover, ObamaCare has caused a huge increase in part-time work. ObamaCare mandates that employers provide health insurance for those working 30 hours a week or more. Consequently, employers are hiring more part-time workers who therefore earn less money than when they worked more hours.
In short, I’d say that the stock market has done well despite Obama and the Democrats.
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