There is no shortage of opinions on how well (or how poorly) the Obama administration has executed its job in managing our national interests over the course of the last eight years, but there is one thing I think everyone will agree on: Obama has done a wonderful job promoting Obama.
“Our businesses are in the longest uninterrupted stretch of job creation in our history.” — September 10, 2014
“I would put our legislative and foreign policy accomplishments in our first two years against any president — with the possible exceptions of Johnson, F.D.R. and Lincoln — just in terms of what we’ve gotten done in modern history.” — December 2011
Being the polarizing figure that he’s been, Obama’s supporters have shown little hesitation in agreeing with these statements.
His detractors have been just as quick to shake their heads and call BS on any flattering evaluation of his time in office.
But what is the cold, hard, honest truth? Removing all of the emotional background noise, just how good or how bad has his time in office been?
That question cannot be answered all at once. It needs to be divided into issues.
There are the foreign and domestic spheres. There is legislation and administration. There are social issues and there are economic.
The focus here is the economy, and, unlike many of his supporters would like to believe, the best indicator of a strong economy isn’t the Dow.
While strength in the stock market does indicate investor confidence, the best way to tell just how strong the economic backbone of the nation is, is to look at the inflation-adjusted earning potential of the average citizen.
That earning potential gives us a glimpse of spending potential and, with it, the ability of the citizenry to maintain and enhance quality of life.
While raw job creation might provide some insight into this issue, an evaluation of the overall quality of life needs to go farther.
When it comes to raw job creation, Obama has, indeed, done better than average.
But if all he’s doing is creating more and more minimum-wage and part-time employment opportunities, what exactly is the net effect of this presidency? Is it good, or is it bad?
For the answer, we go to the average earning potential of Americans, as tracked across his entire time in office.
Across the board, wage growth among Americans in non-supervisory roles (cutting executives out of the metric) hasn’t exactly been astounding since Obama entered office in January of 2009.
Compared with other salient modern history moments, going back 50 years, his time in office looks downright underwhelming. In fact, it’s a bit reminiscent of a dying patient’s EKG.
Which means that all these jobs, in the end, have done little to keep up growth on a household level.
And that puts into question all claims of a recovery, much less a resurgence.
Part of the reason we’re seeing this downturn in wage growth amidst supposedly positive progress in unemployment is that job participation across the board is at historic lows.
So while new jobs are being created and unemployment appears to be waning, those numbers need to be taken in context with a smaller workforce.
Unemployment figures do not include those who have been out of work long enough to no longer be eligible for unemployment benefits or those who are working only part time.
So while official unemployment figures may be low, about 5% of the total population is no longer even considered in that metric.
Just one of the ways that Obama and his spin-doctors are able to turn lemons into lemonade.
And it’s based on that lemonade that we’re to believe that things are better than ever — even though upward mobility, even among those at work, is also at record lows.
The lesson to be learned here?
Don’t believe the conclusions you’re being handed. Believe only the raw numbers.
Until next time,
Pro Trader Today