That Joke about Obama being Responsible for the Great Economy
Did you hear that great joke about Obama being responsible for the amazing economic growth of 2017? What a zinger! That joke never fails to get a good laugh from anybody that paid attention to the economy during the eight year Obama administration.
To be sure, President Obama came into office during economic recession. With many actions already undertaken by President Bush, Obama spent trillions of dollars to shore up our economy. Much of it was utterly wasted on liberal programs (Solindra) but when you throw a couple of trillion dollars at a wall, something is bound to stick. So our country entered into a very weak recovery from the recession.
The economic strength during the recovery from the recession was historically weak. Typically as a recession ends, economic confidence creates a sort of self-fulfilling prophecy in which people are feeling better about the economy and that makes them take actions that actually do improve economic conditions. This did not happen at all during the Obama administration because they kept imposing new regulations that further stifled economic growth. The economy was like a boat with its engine running that is tied to a dock. The ropes in this case were onerous regulations holding back the economic boat.
President Obama was so bad for the economy that Donald Trump didn’t actually have to do anything in his first quarter as president to get get the economy growing. All he had to do was promised to undo what Obama had done and the economy started to take off. To continue with our boat metaphor, he cut the rope regulations that was holding back the economic boat and it began to surge forward.
To those who are trying to give Obama credit for the amazing improvement in the economy during Donald Trump‘s first year as president, I asked a simple question: if it was Obama policies that created the economic growth, then how come it only began once those policies started to be reversed by Trump?
The economy produced an average annualized growth of 1.5 percent during the final 6 quarters of the Obama administration. The second and third quarters of 2017 produced above three percent growth.
The Dow Jones Index closed at almost 25,000 at the end of 2017. It passed 26,000 less than 3 weeks later. About $6 trillion in value was added to the various stock market indexes since President Trump came into office. Homeowners across the country saw their home values increase the total of almost $2 trillion in 2017. If you have a 401(k), IRA, government or organization pension plan, you are looking at your statement with the smile at the end of 2017. If you are one of the estimated 2 million US workers that have received a large bonus that employers are directly attributing to the recent tax cut, then you probably are continuing to smile.
In other words, the economy is booming and Americans of all economic levels have President Trump to thank. If anyone tries to tell you that President Obama is responsible for this great economy, tell them that you’ve already heard that joke.