The Gallup Organization recently released a poll where they asked Americans how they feel about their circumstances today.
Even with the COVID-19 virus, the resulting deep recession and the ongoing division surrounding the upcoming elections, the majority of Americans feel better off today, when compared to four years ago.
The poll found 56% of Americans say they are better off now than they were in 2016 when Obama-Biden were in office. Even more surprisingly only 32% of Americans said they were worse off now. The 56% is a record high when the poll was conducted during the election of a sitting president.
The high better off number is really not surprising. Indeed, had the virus not caused the economic and social devastation, it is easy to imagine that the better off number could have exceeded 60%.
The reason for this is easy to see. Most Americans judge whether they are better off by looking at economic, security and general living conditions, including personal freedom. In each of those three areas, Americans are far better off.
The Obama-Biden economic recovery was by far the worst recovery ever. A deep recession from mid-2008 to mid-2009, resulted in high unemployment, stagnant wages and a general lack of opportunity. The correct economic policy would have been geared to increase economic growth as the primary priority.
Instead, Obama-Biden policy set the top priority as curing perceived social injustices. Each time they acted to cure those injustices, economic growth slowed. The result was that during the eight-year tenure of Obama-Biden, the U.S. economy averaged its lowest growth rates since the great depression. The growth rate averaged less than 2%.
The unemployment rate peaked at 10% in 2009. The rate would have been much higher, but more than 3% of workers dropped out of the labor market, so even though they weren’t working, they were not counted as unemployed.
The typical growth-oriented policies after recession are to use expansive Monetary Policy, increased government spending, reducing counter-productive regulations and reducing tax rates. Instead, Obama-Biden nullified the effect of expansive Monetary Policy by passing the Dodd-Frank bill which severely limited banks’ ability to make loans. Without lending there is no multiplying effect of Monetary Policy, so the expansive Monetary Policy was ineffective.
Obama-Biden did pass a massive $831 billion spending package. But the spending was geared toward specific industries (like solar panels) and toward social programs. This too minimized the multiplying effects. The shovel ready jobs that were promised turned out to be “not so shovel ready.”
By 2012 the unemployment rate remained above 8%. The slow recovery continued so it took four more years for the unemployment rate to fall below 5%. Most economists called this a full employment level. It took eight weary, slow-growth years to get there.
Instead of cutting taxes to stimulate growth in 2009 or 2010, Obama-Biden passed the Affordable Care Act. This law increased the percent of Americans who had health insurance from 85% of households to 91% of households, meaning about 20 million households were helped.
The problem was that the law contained 21 new or increased taxes. In addition, in 2011 taxes were raised by 10% on the highest income earners. Those are the people that create new capital. With higher taxes and the reduction in capital formation, our capital-intensive economy struggled to grow.
In addition, by 2016, Obama had passed thousands of new growth-stifling regulations. At the end of his term, Americans were feeling no better off than they did in 2012 or even 2008.
Then Donald Trump was elected. He eliminated thousands of regulations allowing the economy to grow and allowing Americans to feel more freedom. He convinced Congress to cut taxes for all income earners by 10%. He reduced corporate tax rates to create more capital for expansion.
Trump increased government spending, primarily for the military. Monetary Policy was again expansive and effective since Trump reversed the growth-stifling portions of the Dodd-Frank law.
Even though most economists said the economy was at a full employment level at the end of 2016, Trump was able to create enough new opportunities, that the unemployment rate fell to a non-war historic low of 3.5%. Real wages increased for the first time in decades and medium household income increased by more than $6,000 per year. All done in less than four years.
During the eight years of Obama-Biden, median household income increased by about $2,000. It is not surprising that Americans are feeling better off economically today.
On the security issue, out national defense has improved. ISIS has been eliminated, North Korea is not firing missiles, Iran is on the verge of an economic collapse which limits their terrorism activities and sanctions have been placed on Russia. Trump has confronted China. Americans feel safer.
Even with the virus issues and the domestic unrest, Americans generally feel more secure, better off economically, feel much more freedom and are more optimistic than they did four years ago. When confronted with this information candidate Biden said of the 56%, “They probably shouldn’t vote for me.’
On Election Day, he will be right. The 56% will follow his suggestion and vote to re-elect Trump.