In the heat of the presidential election, determining fact from fluff can be a challenge. Both candidates seem to tell a tale of two unions, vilifying each other in the process. Every spoken word is dissected and thrown into the spin cycle by political pundits in every form of media. When President Obama has had to defend his record on the campaign trail, he was met with bitter rivalry and absolute rejection. Mitt Romney, John Boehner, and basically every Republican in Congress have all condemned the President's chosen path to recovery, claiming it had done more harm to the nation than good. As far as the economy is concerned, their party platform was based on claims of out-of-control government spending, complaints of high taxes and a failure to create jobs. Alas, if it is the truth you seek, skip the networks and go straight to the data: therein lies what Republicans have ignored, and the reason President Obama won reelection.
First: the 2012 jobs reports. These monthly reports are evolving things, as precise results do take time to compile. Today we saw final revisions to the November and December numbers, which added 146,000 and 155,000 jobs respectively. This brings the total number of jobs created in 2012 to 2.17 million. That's the best year in job creation since 2005, and bests the numbers from 7 of the 8 years of the Bush years. President Obama's own jobs bill - The American Jobs Act - which Republicans flat-out rejected, was applauded as "a significant boost to GDP and employment." Had it passed, 2.1 million more jobs would have been created. All of this considered, Republican claims of inaction are a tough sell.
Second: the January 2013 jobs report. The addition of 157,000 jobs in January was expected, as was the basically unchanged unemployment report, ticked up to 7.9% from 7.8%. What was revealing in this report was a continued trend of job losses in the public sector, or government jobs at local, state and federal levels. In the last three months of 2012, government employment dropped by 24,000 jobs. January brought that number to 33,000. This is a result of something obvious: cuts in government spending, a federal tightening of the belt. Failed austerity measures in the Eurozone have not helped to change the opinion that this is the most effective way forward, yet it is how Republicans propose we deal with our own recession. In fact, history has not helped sway their opinions either. Indeed, in the past, efforts to recover from economic downturns have been dependent on a boost in public sector employment, as the government is always capable of expanding its workforce to aide the recovery process along. This time, claims that the government is too big under Barack Obama have led to staunch opposition to such an approach. The irony here is that government spending and employment have dropped drastically under President Obama, compared to President Bush (who?) and even the Republican deity, President Reagan, as shown below:
School teachers, police officers, firefighters have taken the brunt of the cuts, along with about 1.1 million other government workers over the course of the past 3 years. Of course, not every one of the jobs cut provided essential services, so not every cut made was a bad decision. It is, however, an extreme misrepresentation of the facts when one claims that President Obama refuses to negotiate.
That brings me to the third point: taxes under President Obama. In February of 2012, the President announced a $4 trillion deficit reduction plan, which acknowledged demands for spending cuts but also included tax increases on the wealthiest Americans. (it was argued that how this would be achieved was dishonest, but economists (and I) disagree, and I won't get into that debacle here.) The revenues side of his proposal included over a trillion dollars in deficit reduction, and at a time when the distribution of wealth drastically favors the top 20%, it seems a fair suggestion that historically low taxes go up on those lucky few. Revenues, supplemented by spending cuts, was the approach favored by Democrats; cuts alone were favored by Republicans, who saw no value in the $1.3 trillion loss of revenue due to the Bush Tax Cuts. This was a major debate during the 2012 election, but the American people reelected President Obama, showing clear support for a balanced approach to dealing with our deficit. In recent public sector jobs numbers, we see proof of the effect of cuts alone: contractions in the economy and stifled growth. Why, as a nation which prides itself on being a world leader, would our government choose to ignore necessary infrastructure investments or an ability to create jobs, and hope sudden stinginess on all fronts will lead to growth?
The real question here is not whether one party is truly fighting to end this recession and get Americans back to work; it is simply how each party plans to make that happen. Where Republicans favored austerity, Democrats favored investments. Plain and simple. Luckily for President Obama, history shows that investing in infrastructure, raising revenues and boosting social programs have been the major factors contributing to growth in economic recoveries. Projections of future growth under his plan mirror that. On the flip side, the majority of Republicans in Congress have chosen to ignore history and basic arithmetic in their approach, and have successfully convinced their constituency to do the same, so they may continue living in their land of make believe, where a Kenyan, Muslim, socialist runs the show, cooking the books monthly and hating American values.