Friends, the middle class has not been in decline for 40 years, nor have incomes been flat in America for the past 15. Over the past several months we’ve released a series of reports that show that things are far better today than much of what we’ve heard on the campaign trail this year, and that Americans themselves can feel it. In my new Op-Ed in US News (read here, excerpts below), I argue that since a new age of globalization began in 1989, America has seen periods of growth, lower annual deficits, booming stock markets and real income gains for workers – but only when the right policies have been put into place. There is a need for all of us to get closer to this data, find a better way to talk about the US economy and help reframe the economic conversation in the months and years ahead. The profound economic pessimism we’ve heard from many candidates these past two years neither accurately reflects the true experience of the American economy, nor the perception of American workers themselves. This is particularly true for Democrats, 78% of whom said economic conditions were good (in this same poll the # was 28% for Republicans – a 50 point difference).
For more on this discussion review the Op-Ed below, a series of recent pieces from NDN, and this excellent set of analyses and essays from Dr. Rob Shapiro.
"One of the more important questions in this long presidential election asks whether this new age of globalization has worked and is working for everyday Americans. We've heard many charges – decades of middle class decline, years of no income growth and lots and lots of anger at elites. Given how central this discussion has been to 2016, it deserves a closer look."
"Here at home the data suggests a more complicated picture than what we've heard on the campaign trail. While median income is only $3,000 higher today than in 1989, it has not moved on a straight line. As the graph below shows, it fell under President George H.W. Bush, rose steadily under President Bill Clinton, flatlined and then dropped under the second Bush, then declined as a result of the Great Recession and is now steadily rising again under President Barack Obama. By the end of this year incomes are likely to be 10 percent higher than they were at their recent nadir in 2012, and grew more in 2015 than in any single year of the modern era."
"Other economic data from this period follow similar trend lines – the annual deficit grew under both Bushes, and dramatically improved under Clinton and Obama. The unemployment rate rose under both Bushes, and fell during Clinton and Obama. The stock market had a modest rise under the first Bush, fell under the second and had explosive growth under Clinton and Obama. Three million net new jobs were created in the two Bush presidencies. Thirty million were created under Clinton and Obama."
"So a fairer characterization of this new global economic age isn't one of relentless decline; it is one that acknowledges workers have been able to prosper and make gains, but that two recessions – one the second worst in the past century – wiped out many of those gains. Or to put it another way, when the right policies and team were in place, Americans have been able to prosper in this new age. And the opposite has been true as well. So perhaps it isn't globalization or bad trade deals that have caused the struggle of far too many of late, but policies and leaders not capable of navigating a vastly changed economic, demographic, technological and geopolitical landscape."
"Which is why the choice Americans are about to make for their president matters. The last two presidents who argued for aggressive military action abroad and regressive economic policies at home brought us recession, income losses and larger annual deficits. Those who argued for investment at home, an embrace of this new global age and its opportunities and a restrained multilateralism abroad saw long, sustained periods of growth, lower annual deficits and rising incomes. We've tried this four times now since the wall fell, and we have real data to guide us going forward. Americans have prospered and succeeded in this new age, and can do so again – but only if we follow policies that look far more like Hillary Clinton's than Donald Trump's."
You can find the full report in a PDF at the very end of this post. Below is an excerpt.
The questions of whether we are better off, and safer, are always central to our Presidential elections every four years, and this one is no exception. This report does a deep dive on publicly available data to see if we can answer those questions for this election in 2016.
As you will see from the following summary of the data and the many graphs that follow, our findings suggest Americans are indeed better off today, and safer, than they were when Barack Obama took office in 2009.
We also include portions of very recent polls that confirm that Americans are relatively content with the economic progress that has been made in recent years, and feel that things are getting better. These results are consistent with other recent polls showing President Obama hitting his highest job approval ratings of his second term; and they raise the question of whether this is really a “change election” after all.
This report builds on other recent work by NDN, including our recent economic report, "In A Global Age, Democrats Have Been Far Better for the US Economy, Deficits and Income," Simon's recent column, "On 2016: We Are Better Off Today" and an in-depth analysis, "America Is Better Off and Safer Today".
The US Is Better Off Today
Unemployment Rate – When President Obama came to office the unemployment rate 7.8%. Today it is 4.9%.
Jobs – During George W. Bush's Presidency, the American economy gained 135,000 jobs a year. Under President Obama it has been more than 1.3m a year.
Incomes – After dramatic increases during the Clinton Presidency, incomes fell under President Bush. Incomes have once again risen under President Obama, and preliminary 2016 data suggest that median income for American families will be the highest in recorded history at the close of 2016.
Uninsured Rate – The rate of those without health insurance has dramatically declined in the Obama years and now stands at the lowest level ever recorded, 8.6%. At least 20 million Americans have gained insurance in recent years.
Annual Deficit – When President Obama came to office the annual deficit was $1.4 trillion. Today it is $616 billion.
Stock Market – When President Obama came to office the Dow was at 7,494. Today it is around 18,000 and is repeatedly reaching record highs.
Americans Are Safer Today
The question of “are we safer” is a bit harder to get at than the question of “are we better off.” We choose to look measures that have been raised by Donald Trump himself this year (often erroneously). We fully acknowledge that there may be other legitimate data sets that could be added to this section to help paint a fuller picture.
Two things stood out in the section: by most measures, the Obama Presidency has experienced the lowest levels of crime and violence ever recorded; the large flows of undocumented immigrants into the US we witnessed during the Bush Presidency has not been replicated in the Obama years, and there are now fewer undocumented/unauthorized immigrants in the US than there were in 2008.
Crime Rate – During the Bush Presidency, the violent crime rate was 476 violent crimes per 100,000 people (average of each year). During Obama's Presidency the violent crime rate has been 387 incidents per 100,000 people.
Americans Killed By Terrorists – During the Bush Presidency, 3006 Americans were killed by terrorists, an average of 376 deaths per year. During the Obama Presidency, 91 Americans have been killed by terrorists, an average of 12 per year.
Police Killed In the Line of Duty – During the Bush Presidency, 437 police officers were killed in the line of duty, an average of 55 per year. During the Obama Presidency, 344 police officers have been killed in the line of duty, an average of 49 per year. The Obama Presidency has seen the fewest police officers killed on duty during any Presidency since records began to be kept in the early 1960s.
Flow of Unauthorized Immigrants into US – During the Bush Presidency, the US gained an average 400,000 net new unauthorized immigrants each year. During the Obama Presidency, the average yearly rate is below zero, as there are fewer unauthorized immigrants in the country today than when President Obama took office.
Overview – This report looks at the economic performance of the two American political parties when in the White House since the end of the Cold War. You can find the full report below, as an attachment.
We use 1989 as a starting point for comparison because when it comes to the American and global economies, the collapse of Communism and the non-aligned movement ushered in a new, truly global economic era, one very different from the one that came before. It is thus fair to see how the two parties have adapted to the enormous changes this new era has offered, and whether their policies have helped America prosper or struggle as we and the world changed.
As you will see from the following analysis, the contrast between the performance of the Democrats and Republicans in this new economic era is stark: 2 GOP Presidencies brought recessions, job loss, higher annual deficits, and struggle for workers; the 2 Democratic Presidencies brought recovery and growth, job and income gains, and lower annual deficits.
Based on these findings it is fair to assert that over the past generation the Democratic Party has been far more effective at crafting effective responses to a new economic era than the Republican Party. This case is bolstered, of course, when recalling the GOP’s spirited predictions of economic calamity when opposing both the 1993 Clinton economic plan and budget and the 2009/2010 Obama stimulus and “job-killing” Affordable Care Act.
The Republicans have gotten it wrong now in four consecutive Presidencies.
While it will not be the subject of this short report, our findings raise questions about whether the characterizations of the US economy as one not producing income and wage gains either over 40 years or over the past 15 years are accurate. It would appear that a more accurate description of the US economy in recent years is that with smart policies, Americans can prosper even in a more challenging and competitive global age.
Key Findings From The Report:
Job Growth: Over the Clinton and Obama Presidencies, more than 30m new net jobs were created. In contrast, during the two Bush Presidencies, approximately 3.5m jobs were created.
GDP Growth: Both Democratic Presidents saw the GDP rate rise during their Presidencies. The first President Bush saw GDP hold steady during his tenure. The second President Bush saw GDP decline.
Unemployment Rate: Both Democratic presidents saw more than a 3% point decrease in the unemployment rate during their terms. The Bushes saw increases in the unemployment rate by more than 2% and 3% points respectively.
Income: Both Bush Presidencies saw Americans experience decline in their median income, while during the Presidencies of Presidents Obama and Clinton Americans experienced gains. The newly reported 2015 increase in median income of almost $3,000 is the largest ever recorded since statistics began being kept in 1967.
Deficits: Both Democratic presidents saw dramatic improvements in the annual deficit during their tenures, with Clinton turning large structural deficits into annual surpluses and Obama cutting the annual deficit he inherited by one half. Both Bushes saw increases in the annual deficit on their watches, with the second President Bush seeing a more than ten-fold increase in the annual deficit during his presidency, one of the greatest explosions of debt in US history.
Public Opinion About the US Economy: Survey after survey finds Americans believing that things are far better, and improving. According to one new report, the President’s job approval on the economy stands at its highest mark since 2009. A new report from Gallup finds fully 80% of Americans are satisfied with their current standard of living.
Healthcare: The uninsured rate has plummeted, while the growth of health care costs – a significant driver of the US budget deficit – has slowed. Slower cost growth and healthier Americans are good for the American economy, businesses and the nation as a whole.
Energy: President Obama’s “all of the above” approach has a rousing success for the nation, increasing domestic production, lowering energy costs for American businesses, lessening our dependence on foreign sources of energy while giving the US a leg up on the new energy technologies of the future.
Again, you can find the full report, below, complete with lots of charts and graphs. Enjoy.
“Monday Musings” is a new column looking at the 2016 elections published most Mondays. You can find previous editions here.
2016 Overview – Sticking with the poll average we’ve used all election, Clinton heads into the home stretch up 48.1/42.5 over Trump. The Real Clear Politics “No Toss Ups” Electoral College map has it 340/198 for Clinton. While the race has tightened a bit, and the CNN poll shows Trump up today, I will stick with the data in front of us – Clinton holds a firm lead on Labor Day. It was always inevitable that Trump would claw his way back to the mid 40s from the historically low place he has been in recent months. Part of what we are seeing is the slow, painful “coming home” of Rs who are holding their noses and deciding to vote for Trump. My expectation is that heading into the 1st debate on September 26th Clinton will hold a 3-4 point lead.
The Real Clear Senate “No Toss Ups” has it 50/50, which would give control to the Democrats if Clinton wins. Any way you look at this election right now, we should expect it to be competitive across the board. The ace in the hole for Democrats is their huge financial and organization advantage, which could make a significant difference in close states either for President or Senate. More on the House next week.
We Are Better Off Today – One of the most significant sets of data in the 2016 revolves around the perception of the performance of President Obama. As I’ve said for years now, if folks don’t believe that Democrats did a good job these last eight years there won’t be any reason for them to vote for them in 2016. We know that President Obama’s various approval ratings hover in the high 40s, low 50s, and in some polls are the highest they’ve been in his second term. We know that the employment rate is below 5%; median incomes have been rising in the US since 2011; there is direct evidence now that wages have alos been rising since 2013; the stock market is at historic highs; the annual deficit is less than half of what it was when Obama took office; 20m have health insurance today who didn’t have it and the growth health care costs are slowing: despite dystopian rhetoric from Donald Trump, crime rates in the US have plummeted over the past generation and investment in our cities has soared; energy costs are lower today, domestic production is up and we’ve begun to make the transition to a cleaner energy future in earnest.
To me it is clear and evident that things are better today than when Obama took office.
Helping fill in this picture a bit comes a brand new study from Gallup. We include the key graphs from the study but this shows is that simply isn’t a high level of discontent in the country right now. 80% of Americans say they are satisfied with their current standard of living, and 50% say things are getting better for them. Take a look:
Democrats need to do a better job owning the success of their past two Presidents. Both have left the country far better than they found it. The same cannot be said of the last two Republican Presidents. If Democrats were to move one single message as a party in the final two months of the election it would be this – when they are in power, things better. When the Rs are in power, things get worse. This is both true, and germane to the debate we are having in America right now.
We end with a chart that Jared Bernstein used in a recent Washington Post piece, It shows that median income has been rising since 2011.
“Monday Musings” is a new column looking at the 2016 elections published most Mondays. You can find previous editions here.
2016 Overview – The Huffington Post poll tracker now has the race at 4.8 points for Clinton, a slight drop from her high two weeks ago. While there are some polls showing movement in the last few days away from Clinton, others show large leads. Expect a period of very volatile polls over the next month or so until they settle down a bit in August.
With Sanders coming on board the Clinton campaign today, a central contrast of the 2016 campaign will begin to emerge more clearly – united party/strong team/proven track record/thoughtful agenda vs. isolated Trump/unpopular leaders/failed Presidencies/no forward looking solutions to emerging challenges. This emerging contrast, an inevitable outcome of the next few weeks, will make it far more likely that Clinton and the Democrats make gains and lead heading into the home stretch of this historic campaign.
Part of that contrast has been developed in the deeply respectful and civilized way the Democrats worked through their platform over the past few weeks. While the primary was contentious, and there were meaningful platform fights/disagreement, this process was well within the bounds of our how our politics is supposed to work. The capacity to resolve disagreements is the cornerstone of a properly working democracy. Which is why this contrast with Trump, who remains at war with his own party just days before his own convention, is so important. Trump is missing perhaps the single most critical trait for a leader of a democracy – the ability to work through and solve problems with people you disagree with. His take his ball and go home sensibility, isolationist in the extreme, is one that almost guarantees the failure of a Trump Presidency. Democrats would be wise to make more of how he has conducted himself during this campaign with his own fellow Republicans as a clear signal of his inability to manage the complexities of the Presidency itself.
Are We Better Off?
There is little doubt the questions of are we better off and safer today after 8 years of the Obama Presidency will become central to the coming campaign. To me, this is not even a close call. Let’s review some data and bust some myths along the way:
- Millions More Have Jobs, and Incomes Have Been Rising Since at Least 2013 (link)
- Tens of Millions Have Gained Health Insurance, and the Uninsured Rate Has Dipped to Historically Low Levels (Link)
- Annual Deficits Are One Fourth % of GDP That They Were Under Last Year of Bush Presidency (Link)
- The Stock Market Has Been Hovering at All Time Highes, and Is More Than Twice What It Was When Obama Came to Office (Link)
- High School Graduation Rates Are at An All Time High (Link)
- Crime Across the US Has Plummeted, and the Nation is Much Safer Today (Link)
- There Have Been No Foreign Fighter Attacks on US Soil in 15 Years (Link)
- There Are Fewer Undocumented Immigrants in the US Today than At End of Bush Administration - The Flow Has Dramatically Slowed (Link)
- Far Fewer Americans Have Died in This Decade Due to Terrorists Attacks or Died in Military Actions Overseas (Link, Link)
- The US Could Be Energy Independent By 2020 (Link)
- Greenhouse Gas Emissions Declined in 2015 (Link)
If you look at recent polling data, it is hard to conclude that Americans are angry or giving up hope. They may be anxious, and want more from their country and their leaders, but you can find in the data that people understand that things are improving in America. Here is a good example.
I am not being Pollyannaish here. There are lots of challenges facing our country, and the world today. Yes, we have much work to do. But finding a data stream to counter what I just put up there is no easy thing to do. Should we be satisfied with where we are? Of course not. But are we better off today? Clearly.
Look forward to discussing this in the months to come.