The economic recovery that the media have been touting the last couple of days is rife with holes.
Yes, things are better than they were a few years ago – unemployment is slightly down, household income is slightly up and things are slightly better.
This is good – if your idea of good is simply not getting that much worse.
This, we’re told, is the new normal. Be happy with 1-2 percent growth, rather than 3-4 percent. Be happy with stagnant incomes, wages and a reduced workforce. That’s what America is now.
Most importantly, why has it taken us almost ten years to get to this point, where things simply aren’t cratering to the bottom?
A Harvard study called “Problems Unresolved and a Nation Divided” dispels this myth of an “Obama Recovery,” and argues that we’re actually still getting worse. Here are some of their key conclusions:
- America’s economic performance peaked in the late 1990s, and erosion in crucial economic indicators such as the rate of economic growth, productivity growth, job growth, and investment began well before the Great Recession.
- Workforce participation, the proportion of Americans in the productive workforce, peaked in 1997. With fewer working-age men and women in the workforce, per-capita income for the U.S. is reduced.
- Median real household income has declined since 1999, with incomes stagnating across virtually all income levels. Despite a welcome jump in 2015, median household income remains below the peak attained in 1999, 17 years ago. Moreover, stagnating income and limited job prospects have disproportionately affected lower-income and lower-skilled Americans, leading inequality to rise.
And America’s business leaders are not optimistic about the future. Half of all business leaders said they expect U.S. competitiveness to decline in the next three years. One in five see no change and only 30 percent see our competitiveness improving.
What’s the cause of this sustained economic downturn? Barack Obama’s lack of an economic strategy:
The U.S. lacks an economic strategy, especially at the federal level. The implicit strategy has been to trust the Federal Reserve to solve our problems through monetary policy.
The U.S. political system was once the envy of many nations. Over the last two decades, however, it has become our greatest liability. Americans no longer trust their political leaders, and political polarization has increased dramatically. Americans are increasingly frustrated with the U.S. political system. Independents now account for 42% of Americans, a greater percentage than that of either major party.
The political system is no longer delivering good results for the average American. Numerous indicators point to failure to compromise and deliver practical solutions to the nation’s problems. Political polarization has especially made it harder to build consensus on sensible economic policies that address key U.S. weaknesses. It is at the root of our inability to progress on the consensus Eight-Point Plan.
Courtesy of our friends at ZeroHedge, here are nine Harvard charts that totally debunk the myth of the “Obama Recovery:”