For those tired of seeing this popular internet meme, lets address the 3 misleading claims it references: • Obama doubled the stock market. • Obama created 9.2 million jobs. • Obamas had 50 consecutive months of job growth. ► THE STOCK MARKET INCLINE: The stock market incline in not necessarily indicative of a good economy. In THIS case, stocks have risen but purchases of new BONDS have declined. The truth is, the Federal Reserves policy of low interest rates, whether one is to approve of it or not, has more to do with this than youd suspect. As an unintended consequence to remarkably low interest rates, investment in NEW bonds become highly unattractive. This is because bonds are similar to loans, and people cant make money by loaning capital they arent allowed to charge interest on. So when interest rates are held at artificially low rates (which the FED has done so, at slightly above 0%) few will seek to invest in new bonds. Investors, therefore, shift their investment portfolios away from bonds and towards the alternative of stocks. To only reference the stocks, however, is to not acknowledge the decreased investment in bonds. Around 2009, our effective interest rates had fallen to near zero percent. Thats the point at which the incline in the stock market began and THIS is mostly what were seeing (See our corresponding charts) ► OBAMA CREATED 9.2 JOBS: Creating 9.2 million jobs is actually NOT decent job creation during an economic recovery. Reagan inherited a recession and created nearly 20 million jobs. During the seven-year long Reagan recovery, the economy grew by almost one-third, U.S. civilian employment increased by almost 20%, unemployment fell to 5.3% by 1989, real per-capita disposable income increased by 18% from 1982 to 1989, the American standard of living increased by almost 20% in just seven years, and the poverty rate declined...dropping one-sixth from its peak. ► OBAMAS HAD 50 CONSECUTIVE MONTHS OF JOB GROWTH: This is the most dishonest part of the meme. Dont be fooled. What we are observing is not 52 months of excellent economic growth resulting from Obamas excellent economic policies, but 52 months of uniquely SLOW recovery resulting from a uniquely SEVERE loss of jobs. The number of jobs lost just happened to be so devastatingly deep that it became mathematically possible to have 52 consecutive months of relatively slow job growth before we finally reached levels experienced BEFORE the Great Recession. You want the facts? Heres how long it took for us to regain the jobs lost in prior recessions: 2001 Recession took 46.5 months to regain job losses. 1990 Recession took 32 months. 1981 = 31 months 1980 = 9.5 months 1974 = 15.5 months 1969 = 17.5 months 1960 = 19.5 months 1957 = 23.5 months 1953 = 22 months 1948 = 21.5 months In contrast, it has taken us approximately 75.5 months to regain the jobs lost since the 07-08 recession. Of that 75.5 month span, 52 months were consecutive gains, and THATS where this misleading claim originates from. But its because we took an EXTRAORDINARILY long to recover from our job losses that Obama supporters get to make such a statement. Its NOT because weve had 52 months of fast growth. Had the president more quickly returned our job market to pre-recession levels, as ALL of his predecessors managed to do, people wouldnt be able to make such a misleading claim. To cast such a SLOW recovery as a record breaking span of growth, is entirely disingenuous. --------------------- Sources: calculatedriskblog/2014/05/april-employment-report-288000-jobs-63.html forbes/sites/peterferrara/2011/05/05/reaganomics-vs-obamanomics-facts-and-figures/ m.research.stlouisfed.org/fred/series.php?sid=FEDFUNDS&show=chart&range=10yrs&units=lin m.research.stlouisfed.org/fred/series.php?sid=DJCA&show=chart&range=10yrs&units=lin Please also see our expanded articles addressing each of these claims in greater detail: https://facebook/WeAreCapitalists?fref=photo https://facebook/WeAreCapitalists/photos/pb.157541337750750.-2207520000.1408750318./282173815287501/?type=3&permPage=1 https://facebook/WeAreCapitalists/photos/pb.157541337750750.-2207520000.1408749733./294329440738605/?type=3&permPage=1
Posted on: Sat, 20 Sep 2014 23:05:09 +0000
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