The Economic Engine: Is It Fixed?

If our car had a busted transmission, we base whether to call it fixed by how it responds when it's in drive and we press on the gas. Does it go forward when we apply gas? Does it go faster when we apply more gas? If so, then it's fixed ... even when it happens to be going slower on the on-ramp than it was when the transmission first broke on the highway.

We don't base whether to call it fixed on its speed at the moment or how full its gas tank is. That'd be ridiculous.

Right now the Republican House is pulling back on our foot ... keeping us from putting the pedal to the metal. The Fed Chairman filled the tank with monetary measures. The President didn't even try to floor it, but he's tried to apply a bit more gas than the current House is letting him apply with fiscal measures. The 111th Congress was applying more gas than the 112th Congress is applying.

We could be going faster if we applied more gas. That we're not putting the pedal to the metal doesn't mean the car isn't fixed.

Given the output gap between actual and potential GDP, we're driving below the speed limit. The potential GDP is the speed limit. Any faster than that and we're liable to be pulled over and get a ticket. But we could be going faster. There's a good bit of room to step on the gas and get ourselves up to speed. That would require the House to stop holding us back from applying the gas it'd take to get up to speed.

Returns on Education

A chart from The Economist, showing "A college education is good for your well-being and your wallet":

Why do Right-wingers Hate President Obama?

Despite being sufficiently conservative to annoy no small number of staunch liberals and despite his stances broadly matching many of the most common views of middle America, President Obama has become the right-wing's bogeyman to explain away everything that conflicts with their world view. Actually facing facts would require them to change their world view, and they don't want that. This is how satirist Jon Stewart touched upon so much truth when he reviewed Eastwood's convention speech and noted, 

"But I could never wrap my head around why the world and the President that Republicans describe bear so little resemblance to the world and the President that I experience.  And now I know why. There is a President Obama that only Republicans can see."

The notions of trickle-down have been thoroughly shown to not only fail but fail badly. Upper-bracket tax cuts have been a massive flop. We've had them for over a decade. If they worked to create jobs, we'd be rolling in jobs by now. Deregulation returns the system to a level of instability that's bad for business, lowering the ability to expect what will happen with investments. But facing all of that might -- or even any of that -- might require them to admit that maybe their right-wing approach just isn't right. It might require them to re-think a world view in which they're emotionally invested. So instead, they need someone -- anyone -- to rail against for allegedly embodying all that they fear and want to believe must really be at fault.

Here's how it works in the fantasy land of right-wing escapism to explain why their policies must not actually be the root cause of most of our troubles:

• We've got lingering unemployment? Let's not face that Republican's favorite idea of deregulation was a major factor in creating that; instead, it must be Obama's fault.
• We've got debt? Let's not face that it was mostly accumulated under Republicans and by a wide margin at that; instead, it must be Obama's fault.
• We've got a deficit? Let's not face that spending has grown slower under the current President than under any recent Republican; instead, it must be Obama's fault. Facts and figures be damned; he must be a big spender despite what all those charts show.
• We haven't fully brought our troops home from a war started under a Republican and that has mostly been managed by that Republican administration; it must be Obama's fault.
• Analysts expect the Affordable Care Act that Republicans have opposed to really save money by cutting waste without reducing quality of care while still keeping healthcare a largely private system? Nah, that can't be, they say. Surely, since Republicans have opposed it and it involves those regulations [eek!], Obamacare must be big spending govt socialized medicine. Facts be damned! And fact-checkers along with 'em!

And if one should dare to show solid proof that it was really Republicans at fault for any of these things? Why then according to today's Republicans, they must be a left-winger -- maybe even a leftist -- and their sources must be partisan, no matter how much those sources may have been previously recognized as non-partisan, no matter how much those sources are well documented.

The Course of the Recovery

The course of the recovery:

Legislation and events marked on the above chart:

• ARRA - i.e., "the Stimulus", signed February 17, 2009
• Chrysler reorganization, emerged from govt backed chapter 11 on June 10, 2009
• GM restructuring, emerged from govt backed chapter 11 on July 10, 2009
• The first budget based on President Obama's proposals entered into effect with the start of the govt fiscal year on October 1, 2009.
• UC extended under the Worker, Homeownership, and Business Assistance Act of 2009
• Payrolls reached their lower point of the decline from the Great Recession in February 2010
• March 2010 saw the signing of both HIRE (Hiring Incentives to Restore Employment Act of 2010) and the PPACA (i.e., "Obamacare")
• The Dodd–Frank Wall Street Reform and Consumer Protection Act was signed into law on July 21, 2010
• The Small Business Jobs Act of 2010 was signed on September 27, 2010
• Some provisions of the ARRA (i.e., the "Stimulus") were extended via the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 signed on December 17, 2010
• The Food Safety and Modernization Act was signed into law on January 4, 2011

Clinton's Convention Speech in Images

On the argument for President Obama's reelection:

Are we doing better than that today?

Job scoring:

Republican economic policies:

Trickle-down:

Clinton Summarizing the Republican Argument

President Clinton Summarizing the Republican Argument:

President Clinton's Convention Speech: highlights from the prepared text

Highlights from the prepared text for President Clinton's Convention Speech:

"It turns out that advancing equal opportunity and economic empowerment is both morally right and good economics, because discrimination, poverty and ignorance restrict growth, while investments in education, infrastructure and scientific and technological research increase it, creating more good jobs and new wealth for all of us."

...

"In Tampa, the Republican argument against the President's re-election was pretty simple: we left him a total mess, he hasn't cleaned it up fast enough, so fire him and put us back in."

...

"I like the argument for President Obama's re-election a lot better. He inherited a deeply damaged economy, put a floor under the crash, began the long hard road to recovery, and laid the foundation for a modern, more well-balanced economy that will produce millions of good new jobs, vibrant new businesses, and lots of new wealth for the innovators."

...

"The Recovery Act saved and created millions of jobs and cut taxes for 95% of the American people. In the last 29 months the economy has produced about 4.5 million private sector jobs.  But last year, the Republicans blocked the President's jobs plan costing the economy more than a million new jobs. So here's another jobs score: President Obama plus 4.5 million, Congressional Republicans zero."

...

"Now there are 250,000 more people working in the auto industry than the day the companies were restructured.  Governor Romney opposed the plan to save GM and Chrysler. So here's another jobs score: Obama two hundred and fifty thousand, Romney, zero."

...

"The Republicans call it Obamacare and say it's a government takeover of health care that they'll repeal.  Are they right? Let's look at what's happened so far. Individuals and businesses have secured more than a billion dollars in refunds from their insurance premiums because the new law requires 80% to 85% of your premiums to be spent on health care, not profits or promotion.  Other insurance companies have lowered their rates to meet the requirement.  More than 3 million young people between 19 and 25 are insured for the first time because their parents can now carry them on family policies.  Millions of seniors are receiving preventive care including breast cancer screenings and tests for heart problems.  Soon the insurance companies, not the government, will have millions of new customers many of them middle class people with pre-existing conditions.  And for the last two years, health care spending has grown under 4%, for the first time in 50 years."

...

"Both Governor Romney and Congressman Ryan attacked the President for allegedly robbing Medicare of 716 billion dollars. Here's what really happened. There were no cuts to benefits. None. What the President did was save money by cutting unwarranted subsidies to providers and insurance companies that weren't making people any healthier. He used the saving to close the donut hole in the Medicare drug program, and to add eight years to the life of the Medicare Trust Fund. It's now solvent until 2024. So President Obama and the Democrats didn't weaken Medicare, they strengthened it."

...

"Remember, Republican economic policies quadrupled the debt before I took office and doubled it after I left. We simply can't afford to double-down on trickle-down."