The Obama administration has a new talking point for the economy: At least we’re not Europe.
President Obama is making the struggles of other advanced economies such as Europe and Japan the main feature of his latest economic pitch to voters, highlighting the relative strength of a U.S. economic recovery that is weak by historical standards.
“The fact is, the president’s policies and the hard work of the American people have helped America come back farther and faster from recession than almost any other advanced nation,” White House adviser Dan Pfeiffer wrote in an email previewing the president’s speech on the economy last week.
One of that speech’s top applause lines came when Obama said that in the past six years “the United States has put more people back to work than Europe, Japan and every other advanced economy combined.”
It’s an impressive-sounding claim. But it loses some of its punch when the data show that the euro area is facing a triple-dip recession and has continuously shed millions of jobs since 2008, with Italy and other countries suffering shrinking output for years and even Germany appearing to be on the brink of a downturn. Meanwhile, Japanese employment also has shrunk, thanks to a rapidly aging population and a multi-decade period of stagnation. Only the United Kingdom and Canada are among major advanced economies that could claim to outstrip the U.S., but both have added only under a million new jobs since the recession.
“You might say that those countries are doing pretty badly, so the bar is pretty low,” said Desmond Lachman, a scholar at the right-leaning American Enterprise Institute who focuses on global macroeconomics. “This has been a very weak recovery by historical standards.”
Nevertheless, the White House has moved aggressively over the past week to draw attention to the fact that it has improved on Europe’s disastrous economic performance.
The White House pushed its claims via social media, with the White House Twitter account promoting links to media reports that favorably contrasted the U.S. economy to other countries. One story linked by the account Tuesday reported on the International Monetary Fund’s projection that the euro area faced a 30 percent chance of recession in the next six months.
Treasury Secretary Jack Lew took credit for the U.S. avoiding a similar scenario in an appearance in Washington Tuesday morning.
“We took definitive steps, beginning in 2008, to staunch a financial crisis. We took more steps than most of the rest of the world did,” he said at an event hosted by the Peterson Institute for International Economics ahead of the IMF’s fall meeting, which began Tuesday. “We’ve seen in other countries that there’s been a less determined response to their own economic conditions,” Lew added.
But Bentley University’s Scott Sumner, a macroeconomist who has written prolifically about fiscal and monetary policy, challenged Lew’s interpretation of the administration’s role in the recovery, which Sumner said was “very, very slow by historical standards.”
That the U.S. recovery has come despite undergoing more fiscal austerity through spending cuts than Europe “pretty much undercuts [Obama’s] argument,” given that the president favored stimulus, Sumner said. “The only thing that’s been different in the U.S. is that we’ve had a more expansive monetary policy” than Europe, he added, referring to the Federal Reserve’s efforts to stimulate the economy through massive bond purchases and near-zero interest rates.
“It is true that the United States is doing a lot better than western Europe, though,” Sumner acknowledged. “I guess if I were in his shoes I’d make that argument.”
Nevertheless, it’s a tough pitch to make to skeptical voters who in November might hold congressional Democrats responsible for Obama’s performance.
The public’s assessment of Obama’s handling of the economy hit a record low in a survey released Monday by CNBC, with just 24 percent saying they were “extremely or quite confident” in the president’s economic policies and goals.
Obama remains deeply underwater in the RealClearPolitics average of economic job approval polls, with 41 percent approval and 55 percent disapproval.
Despite the recent attempts to contrast the U.S. economy with foreign countries’ struggles, Obama has acknowledged that U.S. families are focused on their own household finances, not the workings of the global economy.
“They don’t feel it,” Obama said of families’ perceptions of the recovery in an interview on CBS Sept. 28. “And the reason they don’t feel it is because incomes and wages are not going up.”
