A Graph That Makes Obamanomics Look Good


Pretty much everyone seems to agree that President Obama's biggest electoral handicap is the economy. Pretty much everyone also seems to agree that, actually, assigning blame (or credit) for the economy entirely to a president is unfair for a couple of reasons: (1) the president doesn't have anything like full control over national policy levers; and (2) national policy levers don't have anything like full control over the economy, which is also influenced by things ranging from technological change to international boom and bust cycles.

There's no easy way to tease apart all these factors. But there's one simple operation that partly clarifies the picture, and it's especially useful when the economy suffers from troubles that are international in scope: compare the performance of the American economy to other similar economies--i.e., "mature" market economies, with high per capita GDP. With that in mind, take a look at this graph of unemployment rates over the past 12 years, and at my comments on it below.


Focus on the maroon, yellow, and light blue lines. (You can ignore the dark blue line, because it represents the 17 Eurozone countries, which are included in the 27 European Union countries represented by the yellow line.) Let's look at three phases:

[1] The Bush years. When George W. Bush took office, US unemployment was a bit lower than Japan's and about four percentage points lower than Europe's. When he left office, US unemployment was about the same as Europe's and about four percentage points higher than Japan's. So: things got way worse compared to both Europe and Japan.

[2] The Obama years. When Obama took office US unemployment was one fifth of a percentage point below Europe's, and as of last month it was more than two percentage points below Europe's. When Obama took office US unemployment was 3.6 percentage points higher than Japan's and as of last month it was four percentage points higher than Japan's. So: things got much better compared to Europe, somewhat worse compared to Japan.

[3] The Stimulus Years. Of course, it takes a while for a newly sworn-in president to actually do anything that might improve the economy, so maybe starting the clock in January is unfair. If you start it in February--Obama's first full month in the White House--then the US unemployment rate has improved relative to both Europe's and Japan's. UnemplMay09.JPGAnd, if you want to capture the impact of Obama's signature attempt to combat the great recession--the stimulus bill--starting the clock a bit later makes sense. The bill was passed in February of 2009, and by the beginning of May, only 3 percent of stimulus expenditures had been made--and, of course, given that some of the employment attributable to this spending comes from second-order effects, you wouldn't expect even 3 percent of the impact by then. So let's take May 1 as the date when you could start realistically looking for appreciable stimulus impact.

What do you see as of May? You see the sharp upward slope of the unemployment curve, which Obama inherited from the Bush years, begin to moderate. And within five months the unemployment rate has reached its acme, after which it drops considerably. Of course, it would be great if it had dropped further, but it would be a lot easier to blame its failure to drop further on president Obama had Europe's unemployment rate, in the same period, not risen by a full percentage point; or had Japan's unemployment rate fallen more sharply than, or even as sharply as, America's.

Again: Neither Obama nor Bush is, in fact, anywhere near wholly responsible for the performance of the economy during their administrations. For example, both Democrats and Republicans, as well as other players, bear some blame for the housing bubble whose bursting marred the end of the Bush years and the beginning of the Obama years.

Still, the first step toward getting clearer on what a president is responsible for--especially during a period of global economic trouble--is to compare America's performance to the performance of similar economies. By that standard, Obama's handling of the economy starts looking pretty good. Maybe not so good that it should be a big political asset, but good enough that, in a just world, it wouldn't be much of a liability.

[Sources: The graph comes from here. My number for stimulus expenditures as of May 1, 2009 comes from the "average" line on this interactive stimulus expenditure chart prepared by ProPublica.]

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Robert Wright is the author of, most recently, the New York Times bestseller The Evolution of God and a finalist for the Pulitzer Prize. He is a former writer and editor at The Atlantic. More

Wright is also a fellow at the New America Foundation and editor in chief of Bloggingheads.tv. His other books include Nonzero, which was named a New York Times Book Review Notable Book in 2000 and included on Fortune magazine's list of the top 75 business books of all-time. Wright's best-selling book The Moral Animal was selected as one of the ten best books of 1994 by The New York Times Book Review.Wright has contributed to The Atlantic for more than 20 years. He has also contributed to a number of the country's other leading magazines and newspapers, including: The New Yorker, The New York Times Magazine, Foreign Policy, The New Republic, Time, and Slate, and the op-ed pages of The New York Times, The Washington Post, and The Financial Times. He is the recipient of a National Magazine Award for Essay and Criticism and his books have been translated into more than a dozen languages.

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