The fact that President Obama’s policies didn’t kill the recovery should be self-evident now. The unemployment rate is at 5.3%, and the U.S. economy looks about the most stable of any in the world these days.
But it took a while to get here. GDP growth has been choppy, and wages still aren’t rising. So you can still make the case that the recovery was slower than it should have been. And if you were looking for a reason why the recovery wasn’t materializing a few years ago, there were plenty of people offering the same one: President Obama, and his confidence-killing, uncertainty-producing policies.
Ed Prescott, a Nobel laureate in economics, blamed the entire Great Recession on “Obama shock,” and the possibility that taxes would rise. Never mind the whole financial crisis, and the fact that the actual recession started more than a year before Obama took office. Gary Becker and and two other University of Chicago economists wrote in The Wall Street Journal in 2010 that President Obama’s policies were creating uncertainty for businesses and slowing what could have been a rapid recovery.
Robert Samuelson in The Washington Post said that Obama’s anti-business rhetoric and controversial health reform had compounded the economy’s problems. “The administration believes these various policies don’t hamper economic recovery,” wrote Samuelson. “Historians, more detached and better informed, may conclude otherwise.”
It turns out they probably won’t.
A study published this week by the National Bureau of Economic Research found that people’s opinions of Washington and the president, and the policies of the party in power, have little effect on their willingness to spend. And that wasn’t only the case in the immediate aftermath of President Obama’s election. The authors of the study, which is titled “Government Economic Policy, Sentiment and Consumption”, say their findings extend to the 2012-2013 fiscal cliff as well, which was widely cited as a cause of economic stagnation at the time as well.
Some shocks in sentiment might matter to the economy, say the authors, like the ones that came after Sept. 11 or the Japanese Tsunami. But the “Obama shock?” Nope. Not a thing.