The Commerce Department released revise first-quarter GDP numbers this morning. They were expected to show that the economy had actually shrunk a bit, instead of expanding by 0.1 percent as the initial report showed. The contraction was predicted to be somewhere around .5 percent. And while this was not something to be celebrated, it could be written off as the consequence of a particularly harsh winter. Climate change strikes again.
President Obama likes to talk about income inequality, but what matters far more is the actual income of the typical American. And how has the typical American household income fared on Obama's watch? Well, the economic "recovery" has now spanned an Olympiad, and during that time the typical American household income has not only dropped—it has dropped more than twice as much as it did during the recession.
In response to the news today that the economy contracted -.1 percent in the final quarter of last year, Democrats are touting the claim that this is "the best-looking contraction in U.S. GDP you'll ever see." The claim was originally made by chief U.S. economist for Capital Economics Paul Ashworth.
Americans must be wondering how much more of this “recovery” they can afford. New figures from the Census Bureau’s Current Population Survey, compiled by Sentier Research, show that the typical American household’s real (inflation-adjusted) income has actually dropped 5.7 percent during the Obama “recovery.” Using constant 2012 dollars (to adjust for inflation), the median annual income of American households was $53,718 as of June 2009, the last month of the recession. Now, after 38 months of this “recovery,” it has fallen to $50,678 — a drop of $3,040 per household.
Bill Clinton, who rode a recession into office and left the scene just before another one began, knows something about the blame game. Addressing the Democratic convention on Wednesday night, he made a full-throated effort to defend the Obama presidency by putting it in the context of past Republican failure.
Why would the president oppose raising taxes when economic growth was 5.6 percent but propose raising taxes when it’s at 1.9 percent? When it’s politically advantageous to be seen as raising taxes on the rich.
When did President Obama change his mind on the wisdom of raising taxes in an economic downturn? And, perhaps more important, if the U.S. economy slipped back into recession, would the president abandon his proposals to raise taxes on the wealthy?
President Obama just announced from the White House a plan to maintain current tax rates for the middle class, while hiking the tax rates for those earning above $250,000 per year. And while Republicans have already voiced opposition to the president's plan, Democrats are now beginning to express their dissatisfaction.
Today, President Obama said, “It has typically taken countries up to ten years to recover from financial crises of this magnitude.” In truth, however, the historical norm has been as follows: the deeper the recession, the stronger the recovery.
Last year, the mega-law firm Dewey & LeBouef generated revenue totaling $782 million. It was the 20th largest firm according to the National Law Journal. Its clients included the Los Angeles Dodgers, the NFL Players Association, and eBay. But over the last five months, 206 of its partners defected. It currently owes approximately $315 million to creditors. There is a criminal investigation involving a pension plan allegedly underfunded by $80 million. Last week, the legacy firm, which dates back to 1909 (and whose "Dewey" refers to the Thomas Dewey), filed for Chapter 11 bankruptcy protection.