2016-11-06

Has Obama Changed the Economy for the Worse? Conclusion

Over the past three weeks I have evaluated nine specific claims made by an article purporting to show that "Obama has changed the face of our economy for the worse." The article was presented to me as definitive proof that Obama has been "a train wreck" as President of the United States.

Of the claims and sub-claims, some of them have merit (2), some of them are technically true but don't actually support the conclusion they are meant to (4), and some are patently false (7).

I would encourage readers to go over each of the claims and my investigations of the but the exeuctive summary is that America under Obama really hasn't changed much during Obama's administration. Using these metrics you certainly can't conclude that Obama is "a train wreck." Given that these metrics were cherry picked to support exactly that conclusion, it is entirely possible that, choosing other metrics, you might even be able to conclude that Obama is "better than a train wreck."

If nothing else, this investigation should be a reminder to apply CRITICAL THINKING to "data" and "facts" with which you are presented - the "facts" presented in this article were mostly false and/or misleading. Nearly everything we see has been filtered through an agenda lens and is tainted with selection bias and interpretation bias. Given that we will each apply our own cognitive biases to information, it is crucial that we get as close to the unadulterated source material as possible.

My suggestion - especially as we head into election day - is to question what you read. If there are no links to sources, that is often an indicator of fabrication/manipulation so your BS radar should be at high alert. If there are links to sources, don't assume that those sources support the conclusions or interpretation of the article you are reading - quite often (This article was a case in point!) they don't.

If your reaction is that this all sounds well and good but you just don't have time to do that kind of research then I challenge you to examine your priorities - what could be more important than being informed as a voter in an election year? As Dumbledore would say, "We must choose between what is easy and what is right."

Choose what is right.

2016-11-05

Is trust in Obama's leadership at historically low levels?

As part of my series analyzing the article suggesting that Obama has changed the economy for the worse, let's now move on to the ninth and final claim: that trust in Obama's leadership and administration remains at historically low levels.

Cutting right to the chase, I can't find any support for this claim. I suppose it depends on what the writer means by "trust" but the nearest metric I can find is presidential approval ratings.

Across 10 polls, Obama is currently ~53%, which is much higher than his lowest approval rating (37% in 2011 and in 2014):


Obama's current approval rating is also higher than every other president's lowest approval rating since Kennedy:




Obama's approval rating is neither low within the historical context of his presidency nor within the context of all presidencies. Therefore this claim is FALSE.

That said, Obama's average approval rating (47%) is the lowest since Carter's and is on par with that of W, Carter, Ford, Nixon, and Truman - not the best of company. I'm not sure, though, if it's fair to compare approval ratings of today's polarized, partisan media-driven, post-fact world with those of a simpler time when people got their information with less spin and did more thinking - and approving - for themselves.

CONCLUSION: This is a baseless claim with no substantiation whatsoever.

2016-11-04

Was America's credit rating downgraded for the first time ever under Obama's watch?

As part of my series analyzing the article suggesting that Obama has changed the economy for the worse, let's now move on to the eighth claim: that America's credit rating was downgraded for the first time ever under Obama's watch.

Yes, America's credit rating was downgraded from AAA to AA+ by S&P in 2011 so this claim is TRUE. The downgrade followed a record high deficit and public debt (See previous discussion.) but the actual reason for the downgrade was perceived risk that the government would default on its debts due to political posturing.

From S&P's Downgrade Announcement:

"More broadly, the downgrade reflects our view that the effectiveness, stability, and predictability of American policymaking and political institutions have weakened at a time of ongoing fiscal and economic challenges to a degree more than we envisioned when we assigned a negative outlook to the rating on April 18, 2011. Since then, we have changed our view of the difficulties in bridging the gulf between the political parties over fiscal policy, which makes us pessimistic about the capacity of Congress and the Administration to be able to leverage their agreement this week into a broader fiscal consolidation plan that stabilizes the government's debt dynamics any time soon."

and

"The political brinksmanship of recent months highlights what we see as America's governance and policymaking becoming less stable, less effective, and less predictable than what we previously believed. The statutory debt ceiling and the threat of default have become political bargaining chips in the debate over fiscal policy. Despite this year's wide-ranging debate, in our view, the differences between political parties have proven to be extraordinarily difficult to bridge, and, as we see it, the resulting agreement fell well short of the comprehensive fiscal consolidation program that some proponents had envisaged until quite recently. Republicans and Democrats have only been able to agree to relatively modest savings on discretionary spending while delegating to the Select Committee decisions on more comprehensive measures."

This is akin to a credit agency reducing the rating of a married couple. They have good incomes but they also have significant spending, which would be fine but all they do is argue instead of presenting any real plan for repaying their mortgage.

CONCLUSION: Yes, America's credit rating was downgraded during Obama's administration - but the fault lies with both parties and especially in Congress. I hope everyone remembers how Congress (both parties) failed us in this incident when choosing to vote for/against congressional incumbents this election day.

2016-11-03

Was there a record number of home foreclosures under Obama's presidency?

As part of my series analyzing the article suggesting that Obama has changed the economy for the worse, let's now move on to the seventh claim: that there were a record number of home foreclosures during Obama's presidency.

This one is pretty easy to research. According to these data from RealtyTrac and the Federal Reserve, indeed there was a record number of home foreclosures during Obama's first term so this claim is technically TRUE.

However, the author uses the claim to imply that the foreclosures are evidence of Obama's failure in economic policy. However, the record number of foreclosures began during the mortgage crisis, long before Obama even took office since the end of the crisis there has been a downward trend such that we are now back to pre-crisis levels:



Fore a detailed breakdown of foreclosure trends, see this report from RealtyTrac.

CONCLUSION: Yes, there was a record number of foreclosures during the worst mortgage crisis in history (duh), which began long before Obama took office. Now we're back to pre-crisis levels of foreclosures.

2016-11-02

Are nearly 50 million Americans on food stamps?

As part of my series analyzing the article suggesting that Obama has changed the economy for the worse, let's now move on to the sixth claim: that nearly 50M Americans are on SNAP (food stamps).

According to the Food and Nutrition Service, ~43M Americans (~13% of population) are on SNAP.
This number (both absolute and percentage) has been declining steadily since it peaked ~48M (~15%) immediately following the recession. It seems like a real stretch to call 43M "nearly 50M" so I suspect the author is either sensationally rounding up and/or intentionally using years-old figures because they better fit his narrative. As such, I rate his claim FALSE.

Still the absolute number and percentage are much higher than historical norms - 10 years ago only ~27M Americans (~9% of population) were on SNAP - so why is that?

Analysis by the Congressional Budget Office suggests that ~20% of the increased enrollment in SNAP is due to expanded coverage introduced during the first month of Obama's presidency but that the remainder is due to the economy. The CBO projects that SNAP enrollment will return to pre-recession in ~6 years:


Note that this CBO analysis is from 2012 - but that the number of SNAP participants has indeed fallen as predicted since then.

CONCLUSION: SNAP enrollment increased during the recession and in accordance with expanded coverage in the American Recovery and Reinvestment Act. It is now falling to pre-recession norms but slowly. Given the previous evidence of the general health of the economy and job market, I would conclude that the aftermath of the recession is disproportionately affecting lower-income Americans.

2016-11-01

Are 46 million Americans Living in Poverty?

As part of my series analyzing the article suggesting that Obama has changed the economy for the worse, let's now move on to the fifth claim: that 46M Americans are living in poverty,

First off, what does it mean to be "living in poverty?"

According to the Census's most recent data (2015), to be living "in poverty" a household must have income below:
$11,770 for 1 person
$15,930 for 2 people
$20,090 for 3 people
... and so on.

As a quick aside, let's note that, in many parts of the world, "poverty" is defined as living on less than $1/day so let's take a step back and give tremendous thanks that we live in a country in which our poverty line is orders of magnitude higher than that. This in no way takes away from the plight of the US's lowest earners - but it does remind us how blessed we are even to be here.

Back to work, though, how many Americans are living in poverty according to this standard? In 2015 13.5% of Americans (43M) were in poverty. 43M is less than 46M so the claim is FALSE.

Still, 43M and 13.5% both sound alarmingly high to me so let's look closer at what these figures really mean. 13.5%, it turns out, is in line with recent historical norms.13.5% is a greater percentage of Americans living in poverty than 10 years ago (12.6%) but has been steadily declining since the recession - a good trend.



As one writer points out, though, these Census figures are a little misleading as they measure the number of people who would be in poverty without government assistance (through SNAP - food stamps - and tax credits), rather than those who are literally living in poverty. By his calculations, the percentage of Americans actually living in poverty is ~3.5% (~11M people) while the other ~10% are being buoyed out of poverty through government assistance. Obviously there is a debate about whether such assistance helps lift people permanently out of poverty, does nothing, or contributes to people staying in poverty.

CONCLUSION: the number of people actually living in poverty isn't as high/alarming as it sounds at first blush, but that's only due to assistance from the government. This seems to have been the case for some time without much change over the last decade. I, for one, would rather see investments in programs aimed at addressing the systemic causes of poverty rather than just helping those already in poverty to stay afloat. Such programs may already exist but I would question their efficacy given the low change in poverty rate over the last decade and I would support experimentation with new approaches.

2016-10-31

Has Obama Accrued More Debt Than All Other Presidents Combined?

As part of my series analyzing the article suggesting that Obama has changed the economy for the worse, let's now move on to the fourth claim: that Obama has accrued more debt than all other presidents combined.

When Obama took office January 20, 2009, the national debt was $10.626T(!). As of September 30, 2016, the national debt was estimated to be $19.4T. So it is accurate to say that, while Obama has been in office, the national debt has increased $9.2T, nearly doubling(!). By definition that isn't as much as all previous presidents combined ($10.626T) so this claim is FALSE.

Of course, that's a pretty goofy yardstick against which to be measuring anyway since inflation and GDP influence the relative magnitude of the debt over time and some presidents have even reduced the debt with budget surpluses. Still, it's worthwhile to take a look at our federal debt as one indicator of our governmental spending/health. After all, $9.2T is still an epic amount of debt to accrue over 7 2/3 years.

It's not entirely fair to chalk the entire $9.2T up to Obama, though, because each president inherits the budget of the previous president during his first 9 months in office. A fairer comparison is to look at the sum of budgetary surpluses an deficits for which the president (and Congress) have been responsible. A good summary of Obabma's deficits pegs him as presiding over ~$7T in deficits - still a record by far  and ~2x that of his predecessor, W, who presided over ~$3T of deficits.

Since the President and Congress negotiate the budget together each year, it is perhaps even more instructive to look at the costs of a President's specific policies. According to this quora post, Obama's policies have cost ~$1T (The bailout and extending W's tax cuts were his biggest ticket items.), significantly less than Bush's ~$5T (Tax cuts and wars were his biggest ticket items.):



Rather than looking at debt in absolute $ values (which will necessarily increase with inflation), I think it's more useful to contexualize debt as a percentage of GDP - which, alarmingly - is nearing historic (WWII) levels:



CONCLUSION: Obama has contributed to the increase in debt as a percentage of GDP - but so has Reagan, Bush-41, and Bush-43. Surprisingly, Bill Clinton is the only president to have presided over a debt that did not increase dramatically as a percentage of GDP. No matter who the next president is, he/she and Congress need rein in the budget rather than mortgaging everyone's future to do popular things in hopes of reelection.