Economy & Budget

Are we really better off than four years ago?

Are we really better off than four years ago?

As Michael Kinsley wrote in 1984, “a gaffe occurs not when a politician lies, but when he tells the truth.”

According to that definition, one prominent speaker at the Democratic National Convention, Maryland Governor Martin O’Malley, recently committed a gaffe when asked, “Can you honestly say that people are better off today than they were four years ago?”

“No,” admitted O’Malley, “but that’s not the question …”

By the next day, O’Malley had gotten on message, saying “We are clearly better off as a country …”

The same message has been repeated by a number of DNC spokespeople: We are better off today than we were four years ago.

BUNK.

According to registered voters, O’Malley got it right the first time. Asked in a recent Gallup poll, “Would you say you and your family are better off than four years ago, or not?” a majority (55 percent) answered, “No, not better off.” Just 42 percent disagreed.

The question harks back to 1980, when candidate Ronald Reagan pointed to Jimmy Carter’s “misery index,” the sum of the unemployment and inflation rates. Asked, “are you better off today than you were four years ago?” most voters answered “No” back then too: Reagan swept into office in a landslide.

How has the misery index fared under President Obama?

Since Obama was inaugurated, the unemployment rate has risen from 7.8 to 8.3 percent, and the inflation rate from zero to 1.4 percent. Added together, the misery index has increased from 7.8 to 9.7 percent. In another throwback to Jimmy Carter, since Obama’s inauguration, the price of gas has more than doubled, from $1.81 to $3.79 per gallon.

Obama’s troubles go beyond the misery index and gas prices. When he was campaigning during the recession in 2008, Obama said we were experiencing “the worst economic crisis since the Great Depression.” Yet, four years later, the situation is even worse: According to the latest data, 1.6 million more Americans are now involuntarily out of work, 6.8 million more are living in poverty, and 16.5 million more are on Food Stamps.

For the average American, Obama’s recovery has been worse than what he called “the Great Recession” – which ended in June 2009. The employment-to-population ratio has flatlined during the recovery, at a level below the lowest point of the recession; the labor force participation rate has fallen more than six times as much during the recovery as it did during the recession.

In this recovery, not only are food and gas prices up, but – according to two studies released in June 2012 — income and net worth are down. The first study, by the former chief of the Census Bureau’s governments division, found that, after more than three years of Obama’s recovery, the typical household earns some $2,500 per year less than in the recession; incredibly, its income has fallen 80 percent more during this recovery than it did during the recession. The second, a Federal Reserve study, found that the average family has lost 40 percent of its net worth since 2007.

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