Obamanomics, Revisited (Updated)

| June 4, 2019

Author’s Note: this article has been updated to account for new data relating to one of the original Gateway Pundit article’s charts. Hat tip to Ex-PH2 for the assist.

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Yesterday, AW1Ed posted a guest article titled “Obamanomics.  While I agreed with the article’s thrust, from my perspective there were a couple of problems.  The original source for the article wasn’t linked, and the accompanying graphics were a screen capture from the original that was at too low a resolution to allow someone to read the graphs’ scales, units, and labels.  Being able to do that is key in interpreting any graph.

The article generated some discussion, and I was curious.  So I decided to do some digging and see if I could find the original article.

I found it; the article was from Gateway Pundit, and can be found here.  And after reading it, what I’d found gave me pause.

The source article – hereafter “GP article”, which was NOT authored by Poetrooper (for whom AW1Ed acted as facilitator in posting his guest article) – IMO had several significant issues.

  • The GP article also had a relatively low-resolution image of its graphics (but one which was better and which could, with difficulty, be mostly read when displayed at higher resolution; it can be found here).
  • The GP article seemed to reference an apparently-recent “St Louis Federal Reserve Report”, but failed to provide a link to same.
  • The data on which the GP article’s charts are based wasn’t fully sourced, which meant that the reader could not independently replicate the article’s graphics.
  • The data on which the GP article’s charts are based did not cover the entire 8 years of the previous      gang of fools      clown crew      bunch of naïve dilettantes    Administration.

The last two truly bothered me.  Taken together, it meant that the GP article gave the appearance of being either very sloppily written – or having deliberately “cherry-picked” data vice presenting reality.  Neither is acceptable.

So I decided to do some more digging and see what I could find.  What follows are the results.

. . .

In an attempt to replicate the charts in the GP article over the full period of the regime headed by the previous Occupant, 1600 Penn Ave, Wash DC, I searched their apparent source – the St Louis Federal Reserve’s FRED website.  (FRED appears to be an acronym for either “Federal Reserve Economic Data” or “Federal Reserve Economic Database”.)  Since most data was available with either quarterly or annual granularity, with one exception I used 2009-01-01 as the start date for my investigation; end dates were all 2017-01-01 or later. This covers the vast majority of the prior Administration, and allows an evaluation of the GP article’s charts (and their implicit claims) over virtually the full 8-year period of that previous Administration.

BLUF:  the GP article’s implicit claims appear largely correct.  However, the presentation is at times misleading.  The conclusions are not fully supported by the charts in the GP article, and some may well be flat wrong.  Data corresponding to 3 of the 9 charts could not be located, though similar data was located for both.  In one case, this similar data was consistent with data presented in the GP article; in the other case, it was not.

I have not included charts in this article.  If you desire, you can recreate the charts I used for my analysis yourself by going to the FRED links below and using the date ranges indicated.  If you want to compare those to the charts in the GP article, use the link to the GP article’s charts avove.

Each of the original GP article’s charts will be discussed next.

. . .

The numbers below refer to the charts in the GP article.  Starting at the upper left, the first row of charts in the GP article is 1 through 3; the middle row is 4 through 6; and the bottom row is 7 through 9.  Original titles from the GP article are underlined below.  The specific data I examined is identified by “Source:”, followed by the URL to the specific FRED dataset and the date range examined.

1. Student Loans:  This original graph in the Gateway Pundit article makes a valid point – and if anything underplays the situation.  The USG guaranteed $146.9B worth of student loans on 1 January 2009.  On 1 January 2017, the USG guaranteed just under $1,0493B – or $1.0493T, an increase of roughly 714% in 8 years.  The trend throughout nearly the entire 8-year term of the previous clueless administration was a massive increase in Federal student loan guarantee liability.  (Sadly, the trend has remained essentially constant during 2017 and 2018, with at best a slight decrease in the curve’s rate of increase.

Source: https://fred.stlouisfed.org/series/FGCCSAQ027S, select date range 2009-01-01 to 2018-10-01.

2. Food Stamps. This original graph in the Gateway Pundit article exaggerates the problem.  However, the problem does appear to be real.  On 1 January 2009, the USG was spending $54.762B on the SNAP program.  Eight years later, the USG was spending $63.976B on the same program – supposedly after 7 ½ years of “economic recovery” and low inflation.  One would expect that the total should be lower after 7 ½ years of recovery than during the height of the 2007-2009 recession.  That’s not what the data shows – it shows an effectively increasing program throughout the first 3 ½ years of the “recovery”.  It’s exceedingly doubtful that population increase between 2009 and 2017 explains the increase, either.

Source: https://fred.stlouisfed.org/series/TRP6001A027NBEA, select date range 2009-01-01 to 2017-01-01.

3. Federal Debt. This original graph in the Gateway Pundit article exaggerates the scope problem by presenting only partial data, implying runaway Federal debt increasing wildly.  However, the problem does appear to be real.  On 1 January 2009, the USG had a Federal debt equal to just under 77.3% of the US GDP.  Eight years later, Federal debt was just under 105.3% of the US GDP – supposedly after 7 ½ years of “economic recovery” and low inflation.  (The Federal debt appears to have stopped increasing as a percentage of US GDP in Jan 2017 and has remained at roughly the same level as a percentage of US GDP  – e.g., somewhere around 104%, +/- about 1.5% – for the last 3 years).

Source:  https://fred.stlouisfed.org/series/GFDEGDQ188S, select date range 2009-01-01 to 2018-10-01.

4.  Money Printing (Monetary Base).  The original graph in the Gateway Pundit article exaggerates the scope of the problem.  However, the problem does appear to be real.  On 25 January 2009, the US had an adjusted monetary base of just over $1.7525 T.  Roughly eight years later, the adjusted monetary base was  just under $3.6756 T – an increase in excess nearly 110% – supposedly after 7 ½ years of “economic recovery” and low inflation.  While some degree of “pump priming” should be expected during a recession and the early stages of recovery – and an enlarged economy would require a larger monetary base for normal operations – this increase seems far larger than justified.

Source:  https://fred.stlouisfed.org/series/BASE, select date range 2009-01-28 to 2019-05-22.

5. Health Insurance Costs: I have significant questions about this one, as I can’t find this particular data set on the FRED site.  However, I did find what appears to be similar data (Producer Price Index by Commodity for Insurance and Annuities: Health and Medical Insurance).  This data does not agree with the chart presented in the Gateway Pundit article; however, it does show what appears to be a constant annual rise in Health and Medical Insurance costs since 2009.

Since it’s not precisely the same data, a direct comparison is not possible.  However, the chart in the GP article implies that Healthcare Insurance costs rose substantially between Jan 2011 and Jan 2013 – by nearly 20%.  The data I found at the St Louis FRED site contradicts that, showing a much smaller increase (roughly 4%) during that same period.  So my take here is that this chart is unsupported and misleading – and should be ignored.  I can’t find the underlying data, and the data I can find seems to contradict it. (If anyone can find the precise FRED dataset that might have been used for the GP article’s “Health Insurance CPI” chart, please post it in comments and I’ll revise this section.)

Source:  https://fred.stlouisfed.org/series/WPU41110301, date range 2009-01-01 to 2019-04-01.

6. Labor Participation Rate: This original graph in the Gateway Pundit article makes a valid point – and perhaps underplays the situation somewhat.  While the Previous Occupant, 1600 Penn Ave, Wash DC inherited a recession, it wasn’t until 3Q  2015 that the US Civilian Labor Participation Rate  “bottomed out” – at 62.4%, a level not seen since the Carter Administration.  From 3Q 2015 until today, the US labor participation rate has remained roughly constant, varying between approximately 62.5% and 63.2%  – down roughly 3.5% from the end of the Bush(43) Administration.  Since we’ve had an economic “recovery”, one would expect the Labor Participation Rate to have begun climbing; however, that hasn’t happened.

Source: https://fred.stlouisfed.org/series/CIVPART, select the date range 2009-01-01 to 2019-04-01.

I guess that means some of those changes made by the previous SCoaMF Administration have convinced 5M+ Americans that sitting on their butt on a couch at home while eating Cheetos and watching the Kardashians on TV is better than honest work.  Great.  Just freaking great.

7. (UPDATED) Worker’s Share of Economy. I couldn’t find the exact data used to create this GP chart on the FRED site. However, one of our other authors found what appears to be very closely related data that is consistent with the GP chart and which continues through 1 Jan 2017. So I’ll discuss that data. (The FRED data I’ll discuss is annual, while the GP chart apparently was based on quarterly data – so the GP chart will show more rapid variation.)

The chart from the GP article is apparently accurate, but incomplete. It does show a decline from Jan 2009 to approximately mid-2013 – but such a decline is common in most recessions and during the early part of most recoveries, so that’s not unexpected. However, examining the full period of the previous Administration (Jan 2009 to Jan 2017) shows that this metric recovered substantially during the next 3 ½ years – though it still never recovered to Jan 2009 levels. And an examination of historical data shows that this metric has been generally declining since 1970. In short: the GP article chart is accurate, but misleading and doesn’t tell the whole story.

Source: https://fred.stlouisfed.org/series`/W270RE1A156NBEA, data ranges 2009-01-01 to 2017-01-01 and full period (1948 to 2017-01-01).

8. Median Family Income. The chart in the Gateway Pundit article is accurate as far as it goes, but presents only a small and, frankly, misleading part of the picture.  In truth, US real median household income did decline during the first 3 years of the previous administration, and remained below 2009 levels for an additional 2 years.  However, by 2015 the US real median household income had surpassed 2009 levels.  It continued to rise during the next two years.  Please note that direct comparisons with past data may be difficult or misleading without adjustment – the FRED site is now indexing real median household income using 2017 CPI-U-RS adjusted dollars as the base year vice 2012 CPI-U-RS dollars (used previously and referenced on the chart in the original GP article).

Source:  https://fred.stlouisfed.org/series/MEHOINUSA672N, date range 2009-01-01 to 2017-01-01.

9. Home Ownership: The original graph in the Gateway Pundit article makes a valid point – and if anything underplays the situation with respect to the Home Ownership Rate.  While the Previous Occupant, 1600 Penn Ave, Wash DC inherited a recession, it wasn’t until 2016 that US home ownership “bottomed out”.  The trend throughout virtually the entire 8-year term of the previous clueless administration was downward (quarterly data shows the absolute bottom was 4Q 2016); quarterly data shows it’s been generally rising since.  And 2016 represents the lowest US home ownership rate on record (FRED data for home ownership rate only goes back to the mid-1960s).

Source:  https://fred.stlouisfed.org/series/USHOWN, with date range 2009-01-01 to 2017-01-01.  This is unadjusted annual data, which for some reason doesn’t seem to be available yet for 2018 on the FRED site.

. . .

So, what’s my take overall?  The original GP article is a mixed bag.  Its charts are all over the board – some are spot on, while others are accurate as far as they go but fail to tell the whole story.  Some are misleading, and one may be flat-out inaccurate.  And none cover the entire prior Administration; some cover barely half of it.

Nonetheless, many if not most of the conclusions implied in the GP article are IMO valid. That’s true even though there’s nowhere near enough data presented in the GP article to support its claims.

The Labor Participation Rate indeed fell precipitously during the prior Administration – then remained at this new, lower level afterwards.  That’s NOT a good thing.  The US Home Ownership Rate fell throughout the entire prior Administration, finally “bottoming out” at the very end of the prior Administration – again after years of so-called “recovery”.  And the Federally-guaranteed student loan program appeared to have been completely out of control, increasing federal financial liability in this area by over 700% – to over $1 trillion – in roughly eight years.

The Federal debt burden (as a percentage of GDP) increased by more than 1/3 during the previous Administration.  The US adjusted monetary base increased far beyond what would be expected due to population and GDP increases – though, thankfully, without triggering massive inflation.  The cost of health insurance appears to have far outstripped the general rate of inflation as well. Finally, the cost of the SNAP program (“food stamps”) in 2016 remained at levels suggesting hard economic times – even though we’d had 7 ½ years of “recovery” by then.  Even given 8 years of population growth, that’s not what you’d expect to see.

In short, an examination of data over the full period of the prior Administration shows that the GP article’s implied conclusions are largely correct.  That’s true in spite of the fact that the GP article is badly documented, provides insufficient data to support its claims, and is in places misleading or inaccurate.

The GP article’s shortcomings could have been the result of either sloppy writing (e.g., re-use of old data without updating and re-analyzing same), or those shortcomings could have been intentional.  I’d guess sloppy writing, but I can’t rule out the other possibility.

This also should be a cautionary tale that’s generally applicable.  As the old proverb says: “Doveryai, no proveryai.” (Translation: “Trust, but verify”.) That’s alway a good strategy.  Blindly accepting something as fact from an individual or source you don’t know well without double-checking its accuracy can be . . . risky.

Category: Economy

Comments (31)

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  1. ChipNASA says:

    Hey, It was on the Internet. it’s gotta be true.
    *smirks*

    If you haven’t already learned that not everything on the Web is true, then well, let’s just say you get what you deserve.

    That’s a *HELL* of a lot of work you put into this Hondo.

    Yay!

  2. Ex-PH2 says:

    Here’s what I found when I typed in ‘workers share of the economy federal reserve’, as gross domestic income.

    https://fred.stlouisfed.org/series/W270RE1A156NBEA

    The chart starts with postwar date from 1948 and shows a rise during the post WWII years, takes into account the recession and recovery in the 1960s, and then bottoms out in 2015.

    I don’t know if that is exactly what you were looking for, but it covers several decades.

    • Ex-PH2 says:

      Nice job, Hondo, BTW.

    • Hondo says:

      Not exactly the same data (the GP article’s chart seems to be slightly higher – by maybe 1/2 to 1 cent – and based on quarterly data vice annual). But it’s close enough to be used as the basis for an update later today.

      Thanks – for both the link and the compliment.

  3. 5th/77th FA says:

    “Blindly accepting something as fact from an individual or source you don’t know well without double checking its accuracy can be…risky.”

    Isn’t that what the seagull expects us to do with his blather?

    Good follow up Hondo, cleared the murkiness a bit. I 4..er.. re pete my FIRST comment from yesterday. My personal economy has done very well under dTrumpster, Thank you very much.

    • Ex-PH2 says:

      “My personal economy has done very well under dTrumpster.”

      Frankly, mine has also done well under dTrumpster. It’s strange that this is ignored by some people because it does matter, in regard to spending power.

      All marketable goods, especially foodstuffs, move better in a prosperous marketplace. I wonder why that happens that way.

      • akpual says:

        Mine has done very well with President Trump in office. But, I guess nobody gives a damn about slugs like me who have was in the service and then worked for 40+years. We should just shut up and pay our taxes.

    • Hondo says:

      Isn’t “re pete” something artillerymen aren’t supposed to say over open communications networks? (smile)

  4. Wilted Willy says:

    Thanks Hondo, as usual, a well thought out and well documented article. Great Job!

  5. HMCS(FMF) ret says:

    For all to look at and opine about – U6 (unemployment) data:

    http://portalseven.com/employment/unemployment_rate_u6.jsp

  6. AW1Ed says:

    For the record, there was some back and forth between Poe and myself, and my reluctance to post up statistics without the background data. I acquiesced for a couple reasons. I like Poe and enjoy posting his thoughts, but he can be a handful pushing my envelope. This he gleefully admits. He talked me though the chain and it seemed reasonable that the charts were adequate, and I would take them at face value until the data behind them was provided. Hondo has done this in spades.

    But most of all, I knew Lars would be on this post like a duck on a June bug.
    *grin*

    • 11B-Mailclerk says:

      Most places I know, hunting over bait is illegal.

    • A Proud Infidel®™ says:

      Next thing you know he’ll be telling us ALL about how President Trump has been selling Tribbles to the Klingons as a food source in violation of Starfleet Laws and Regulations!

  7. Stacy0311 says:

    It’s clear from all of the research that economics are inherently racist. And facts don’t matter anyway because we could finally be proud of America for electing a black man president…

    Just getting ahead of the curve on comments from a certain individual

    • OldSoldier54 says:

      If it had been an actual black man, I could have, perhaps, done that.

      What we got, instead, was a back-stabbing, two-faced, metrosexual with delusions of grandeur and a large dose of megalomania mixed in like the proverbial salt-in-the-wound.

      I and thankful that we somehow dodged the Hillary bullet.

  8. Mike W. says:

    Obama sucks.
    MATH.
    TRUMP better much of the time for the economy.

  9. DefendUSA says:

    Thanks, Hondo. great analysis.
    The individual situation when it came to the health care costs? I was self-employed when the ACA passed. And promptly, could not afford renewal of my policy because the increase would mean taking something away from my kids. So, I went without and found ways around. Paid cash for all visits, and used a private lab. All in all, I was not out any more money than before-6k for the year. But, given the my spouse was a CPA, he wanted to follow the law. My premium doubled by 2013 which meant, with ACA I would have paid 1000/month, for nothing- just to be able to say I got booted from what worked for me, I did not get to keep my doctor and by the way…you people who cheated the system got what I was willingly paying for. In 2015 when Martin lost his job, I would have been forced to pay 2250./month for nothing. I did the work around thing, again. And still my cost with the penalty was less than 10k. After all, the “penalty” TAX was to opt out of the shit called Obamacare and I had to fight Martin on that. But it was either pay the mortgage or health insurance. And that was MORE than the mortgage. F…Obama and the ACA..and everything else he did, honestly.