In response to Mitt Romney’s inevitable criticism of President Obama’s economic record following Friday’s bleak
report, the pro-Obama PAC American Bridge is circulating the following video, taken from a Romney press conference on June 24, 2006 (via Andrew Sullivan): The takeaway, as Alexander Burns puts it, is that “rhetorically, there’s not much space between Obama ca. 2012 and Romney ca. 2006.” But how much space was there economically? Let’s look at a couple of Romney’s key claims and compare them against Massachusetts’ economy when he was governor and the U.S. economy during Obama’s tenure as president to find out.
Romney: “I came in and the jobs had been just falling right off a cliff, I came in and they kept falling for 11 months.”
Romney is actually a little too hard on himself. Employment was rising by 11 months into his tenure, and the unemployment rate was 5.6 percent, down from a peak of 6 percent. Obama had to deal with a much more severe economic downturn – unemployment maxed out at 10 percent, not six – and the situation was still deteriorating 11 months into his tenure.
Romney: ”We’ve turned around and since the turnaround we’ve added 50,000 jobs.”
Employment bottomed out seven months into Romney’s tenure, and 13 months into Obama’s. Let’s index payrolls to their worst months and see how things changed since then:
Romney’s right that employment was increasing later in his term. What’s more, when he made the above remarks in June 2006, employment was up by 52,025 from its trough in August 2003, so his claim of 50,000 jobs gained is accurate. But job growth has been swifter in the United States under Obama than it was in Massachusetts under Romney, so by 2006 Romney’s standards, Obama’s doing a bang-up job. Of course, job growth under Obama has been perhaps not swift enough, given the huge output gap left by the economic downturn, and Romney was governing during a period of full employment in which dramatic job gains aren’t going to be forthcoming. But again, if Romney thinks the pace of job growth during his tenure suggests his policies were working, then it follows that the pace of job growth under Obama suggests the president is really doing something right.
Romney: “We’re the, you know, we’re one part of that equation, but not the whole equation. A lot of it is outside of our control, it’s federal, it’s international, it’s private sector.”
Here Romney is totally right. The federal government has a lot more power over the national economy than state governments do over state economies. A lot is outside of governors’ control. Perhaps the most important thing they can’t affect is the value of money. Just like the euro zone countries, U.S. states have ceded monetary policy control to a central actor, to wit the Federal Reserve, that deserves much of the credit and/or blame for those states’ economic performance. So when evaluating both Romney’s and Obama’s economic records, bear in mind that Ben Bernanke and, during Romney’s tenure, Alan Greenspan, bear at least as much if not more responsibility for the employment numbers as do the guys leading the federal, and especially the state, executive branches.