Since President Obama left office, his eight year performance in the White House is being evaluated for a number of different issues by a number of different folks. I wish to evaluate Obama’s performance concerning the measure of the annual gross domestic product rate.
The one basic assumption I am making is that the expected average GDP growth rate, including periods of economic decline and expansion, is 3.0 percent. Also, I thinks it is time now to make my study public since the 2016 annual GDP rate was recently published by the Bureau of Economic Analysis.
In order to make my evaluation of Obama’s average GDP growth rate relevant, I decided that I needed to compare it to other times when either a president or political party controlled the presidency for two terms in a row. Since World War II, this situation has occurred seven times. The two-term presidents are: Eisenhower (1953-1960); Reagan (1981-1988); Clinton (1993-2000); Bush II (2001-2008); and Obama (2009-2016). The same party was in control for eight consecutive years for Kennedy/Johnson (1961-1968) and Nixon/Ford (1969-1976). The most important/critical characteristic, which had to be present in order to make a relevant comparison to Obama’s eight years in office, was that a serious period of economic decline (recession) needed to have occurred.
The benchmark I used was a negative annual GDP growth rate of at least minus 1.5 percent. This has happened only twice in the last 66 years; a negative GDP growth rate of 1.9 percent was recorded in 1982 and a negative GDP growth rate of 2.8 percent was recorded in 2009. Thus, based on this evidence the only term that compares well to Obama’s term, is the time period when Reagan was in office.
One other similar characteristic for the Reagan and Obama terms, which supports comparing the results of these two terms, was that they both inherited periods of negative GDP growth rates from the previous president.
The data used for this analysis was obtained from the BEA. This data was entered into a table titled “Comparing Annual GDP Growth Rates.” The result of this analysis shows that during Reagan’s eight years in office, the annual growth rate was 3.5 percent, which was significantly higher than the expected annual GDP growth rate of 3.0 percent. During the eight years Obama was in office, the annual GDP growth rate was only 1.5 percent, which is significantly below the expected annual GDP growth rate of 3.0 percent.
There are two other significant facts about Obama’s GDP growth rate. First, it is the lowest rate of all modern GDP growth rates for any two-term president or party, seventh out of seven. Second, for the first time in American history, we have recorded eight years for the one president or party, in which the annual GDP growth rate never exceeded or matched the expected average GDP growth rate of 3.0 percent.
Therefore, my grade for Obama’s economic performance in terms of the GDP growth rate has to be an F.
Why the GDP growth rate was so low during Obama’s eight years in office and the consequences on households and businesses deserves further evaluation.