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.
NDN's Globalization Initiative was established to promote economic growth and restore broad-based prosperity in our globalized economy. Chaired by Dr. Robert Shapiro, Under Secretary of Commerce for Economic Affairs under President Bill Clinton, the program works to address the structural changes affecting the American and global economies. NDN argues that a "lost decade," marked by declining household incomes, remains the most important factor in the American economy and politics.
Our agenda for addressing the structural changes inherent in the era of globalization includes three key components: modernizing our healthcare and energy policies, investing in 21st century skills and infrastructure, and accelerating innovation across the economy. NDN also continues to play a major role in the debate over how to best manage the Great Recession and fosters dialogue around renewing the national consensus on global economic liberalization.
Building on recent struggles in Congress to do more for the economy than pass the extension of unemployment insurance, NDN outlines a political and policy framework to take steps in 2010 that promote near-term job creation and economic growth.
In this white paper, Globalization Initiative Deputy Policy Director Jake Berliner describes the rise of new economic powers and the challenges and opportunities they are presenting the American and global economies.
Simon argues that the second generation Obama narrative must be a strategic response to the most significant transformation taking place in the world today, what Fareed Zakaria has called the “rise of the rest.” While the true scope of this transformation is only really becoming apparent now, it leaves our new President with the historic opportunity, and tremendous responsibility, to craft a comprehensive strategic response to this global “new politics” of the 21st century.
In this paper, Jake Berliner, Deputy Policy Director of NDN's Globalization Initiative, argues that everyday Americans are at the end of a “lost decade” and explains the still misunderstood causes of the virulence of the recession.
The last few months have not been good ones for Democrats, but there is a road map for how they can get back on track, and it revolves around staying relentlessly focused on the economy and the struggle of every day people.
Michael Moynihan looks at the current state of public investment in infrastructure and proposes a set of measures to restore our national political will and improve funding mechanisms to rebuild and advance U.S. infrastructure.
This presentation details the results of extensive polling conducted by NDN and Benenson Strategy Group in October of 2007 on the American public's opinions about globalization and the changing economy.
NDN, a progressive think tank and advocacy organization, completed a national survey on the economy and globalization on October 15th. This memo is the second of two memos outlining key findings and analysis from the poll.
NDN, a progressive think tank and advocacy organization, completed a national survey on the economy and globalization on October 15th. This is the first of two memos outlining key findings and analysis from the poll.
We can address the challenges of the 21st century economy without sacrificing the benefits of globalization and technological advance, principally by expanding public investments in critical areas and reforming health care and energy policies.
A Laptop in Every Backpack5/1/07: By Simon Rosenberg We believe that America needs to put a laptop in every backpack of every child. We need to commit to a date and grade certain: we suggest 2010 for every sixth grader.
Crafting a Better CAFTA6/9/05: By Simon Rosenberg We believe that an agreement with Central America is so important to how Americans approach the 21st century that we must commit ourselves to help negotiate and pass a better CAFTA.
Growing the Next Economy12/7/11
On Wednesday, December 7th, NDN hosted the Director of Multi-State Initiatives in the Office of Oregon Governor John Kitzhaber and Karl Agne, a partner at GBA Strategies, for a lunchtime discussion about bottom up economic growth, accelerating the ideas that work, and creating the Next Economy. Joining us were
On July 27, NDN hosted the United States' Ambassador to the Organization for Economic Cooperation and Development (OECD), Karen Kornbluh. Ambassador Kornbluh, who previously served as Senator Barack Obama's Policy Director and as Deputy Chief of Staff at the Treasury Department, discussed a wide range of issues in creating "Growth and Jobs for the Future," from youth unemployment, to innovation, to U.S. engagement at the OECD.
On Wednesday, June 16, NDN hosted a speech by Congressman Ron Kind (WI-3), Vice-Chair of the New Democrat Coalition and Co-Chair of the NDC Task Force on Innovation and Competitiveness. Kind spoke about the value of innovation to the American economy and the recently released New Dem Agenda for Innovation and Entrepreneurship. Kind was joined by NDN President Simon Rosenberg.
On June 10 NDN hosted a speech from the Chairman and President of the Export-Import Bank, Fred Hochberg, on the National Export Initiative and the work of the Export-Import Bank. NDN Globalization Initiative Chair Dr. Robert Shapiro moderated a discussion and Q&A following the Chairman's remarks.
On Thursday, March 18, Senator Mark Warner joined NDN to address America's economic competitiveness in a rapidly changing global economy. He discussed the role of innovation in creating prosperity and offered his perspective on the Senate's work to craft a new economic strategy for America, which includes reforming the nation's health care and financial sectors.
On Tuesday, February 2, NDN hosted an address from Phil Angelides, Chairman of the Financial Crisis Inquiry Commission. Formerly the Treasurer of the State of California, Mr. Angelides has been charged by Congress to lead the effort examining the causes of the worst financial crisis since the Great Depression. He discussed the commission's work, which began in earnest in February with much anticipated hearings. NDN Globalization Initiative Chair Dr. Robert Shapiro introduced Mr. Angelides and opened the event with contextual remarks.
The Globalization Initiative was established to promote economic growth and restore broad-based prosperity in our globalized economy, with a focus on modernizing economic policy, investing in workers and students, and accelerating innovation.
The weekly Kos track has the landscape essentially unchanged this week - Obama strong,Congressional Dems in an improved position, the Congressional GOP at catastrophically low levels.
The Congessional GOP is at 16 percent approval this week. Recalling that John McCain received 46 percent of the vote last year, 30 percent of the country is now in a position to have voted for McCain in 2008 and be currently disapproving of the Congressional GOP. At some point the national media is going to come to terms with how incredibly unpopular, ineffective and intellectually bankrupt the modern GOP is today. Only a few times in this past century has a poltical party in the United States been so unpopular.
So Obama has prevailed in this first round. But a new and very important round of public engagement with Congress and the GOP begins now. For the next month or so, even while the Administration starts to very publically engage with the rest of the world (G20, Summit of the Americas, Biden and Clinton trips), there will be a very consequential battle over the President's budget.
The President begins this next round in very good shape. But my sense is that the Administration will have to do a better job now at distilling down to the essence of what they are asking the country to do - is it recovery? To invest in the future? Get the budget under control? Tame Washington? I think the President's plan needs a name and single message. Not sure it should be "recovery," Do we really believe the country wants to go back to where we were - 81 percent wrong track? No. Increasingly I get the sense that these economic and fiscal terms - recovery, stimulus, deficits, investment, budget plan - are the wrong words for this next phase. Feels like it should be more about adopting the President's plan for America; embracing the President's strategy for a strong America in the 21st century; etc.
In reviewing the budget blueprint, it is clear that the President has a far-sighted plan to ensure America prospers in the 21st century. That is what we are going to debate over the next month - and all components of it are means to the end, and not the end in itself. What the Obama team must do at all costs is to prevent the GOP from doing what is has done so effectively these past few years and reduce this big conversation on what our economic strategy for the future needs to be into a overly simplistic debate about numbers, deficits and taxes. All of that is tactical, means to an end - and that end is broad based growth, a strong America, a successful America of the 21st century. Remember that in the Clinton era we raised taxes on the wealthiest among us and saw extraordinary growth and broad-based prosperity. In the Bush era we radically cut taxes for the wealthiest and saw the incomes of every day people decline. Tax rates are only part of the overall strategy our nation uses to create growth, broadly shared, and this old canard that tax cuts automatically create growth has been disproven once and for all.
Larry Summers began laying out the terms of this next debate in an important speech yesterday. But I still feel what is missing in the emerging Obama argument is 1) old bad economy vs new better economy - a forward/backward main thrust vs the concept of recovery; 2) we still have not done nearly enough to account for and explain why incomes went down during the years of recovery before this recent recession. There is a mountain of data that shows that for the American people this period of losing ground was traumatic, that it helped drive the wrong track number to 81 percent, the highest ever recorded, prior to the recession and financial crisis. For many Americans what this means is that we don't need recovery - a return to a period of declining wages - or growth which excluded them - but we need a different and better type of growth that this time, now, raises all boats and helps them manage this more competitive economy of this new century. What we need is a new and better economy; an economic strategy for the 21st century; a strong plan for a strong America; a plan to make globalization work for all Americans, etc.
The idea that we had growth under the GOP that saw a declining standard of living for the typical American family is the strongest rationale for the plan the President is promoting. In this much more competitive economy of the 21st century America will need to invest more be smarter and try harder to maintain our standard of living. We will need to equip America to be successful in a very different 21st economy - one that must be more energy effecient, low-carbon at its base, is technology tense, and globally competitive and interconnected. For America Inc. to propser in that economy we need a new and comprehensive strategy; one that invests in our infrastructure and people; that encourages accelerates innovation and new job creation; that cuts health care costs and encourages better health; that modernizes our electricity network, invests in renewable energy sources and makes a national crusade to make our homes and businesses more energy effecient.
All of this will take time, years in fact. But in his desire to be honest with the American people it is critical for the President to continue to emphasize the long term structural changes and investments we are making, and to not let short term metrics like "recovery," "stimulus" or the stock market be the way he defines success. A tall order all this, but it is one I truly believe the President is up for. The real question is - is Congress?