Obama's economic legacy: Crisis overcome; malaise worse than ever

As President Obama gears up into legacy mode, there has been a raft of stories this week about the president's ongoing struggles with "the narrative." The most prominent of these is Andrew Ross Sorkin's New York Times Magazine story on Obama and the post-2008 economy:

"Two months ago, across an assembly-room table in a factory in Jacksonville, Fla., President Barack Obama was talking to me about the problem of political capital. His efforts to rebuild the U.S. economy from the 2008 financial crisis were being hit from left, right and center. And yet, by his own assessment, those efforts were vastly underappreciated. 'I actually compare our economic performance to how, historically, countries that have wrenching financial crises perform,' he said. 'By that measure, we probably managed this better than any large economy on Earth in modern history.'

"... Obama is animated by a sense that, looking at the world around him, the U.S. economy is in much better shape than the public appreciates, especially when measured against the depths of the financial crisis and the possibility - now rarely even considered - that things could have been much, much worse. Over a series of conversations in the Oval Office, on Air Force One and in Florida, Obama analyzed, sometimes with startling frankness, nearly every element of his economic agenda since he came into office. His economy has certainly come further than most people recognize. The private sector has added jobs for 73 consecutive months - some 14.4 million new jobs in all - the longest period of sustained job growth on record. Unemployment, which peaked at 10 percent the year Obama took office, the highest it had been since 1983, under Ronald Reagan, is now 5 percent, lower than when Reagan left office. The budget deficit has fallen by roughly $1 trillion during his two terms. And overall U.S. economic growth has significantly outpaced that of every other advanced nation."

Now as the author of a book called "The System Worked," I'm extremely sympathetic to Obama's claims. His greatest economic legacy is that historians will call this era the Second Great Depression, despite an initial shock that was far worse than 1929. And the president is correct about U.S. economic performance relative to the rest of the global economy.

The problem, however, is that Americans don't compare themselves to the rest of the world. They think about how they are doing relative to:

1. How they think they should be doing;

2. How they did in the past;

And here we run into Obama's losing fight against the narrative. There is ample data suggesting that the Obama administration and the Fed did yeoman's work in rescuing the American economy from the 2008 financial crisis. But there is equally ample data suggesting that the Obama administration has done very little to address the secular changes to the American economy that began way before the current president was ever inaugurated.

Sorkin's story refers to some of these changes, like automation in the manufacturing sector leading to fewer manufacturing jobs. Sorkin, however, doesn't go far enough in discussing the structural shifts in the U.S. economy and the political effects those shifts have wrought. For that you would have to read Robert Putnam's "Our Kids" or Charles Murray's "Coming Apart." If you're too busy making ends meat to read entire books, you could read the Post's fascinating story on America's real estate divide or Tom Edsall's New York Times essay on how the "self-segregation of a privileged fifth of the population is changing the American social order and the American political system."

Or you could just read the beginning of Neal Gabler's May 2016 cover story for the Atlantic, which opens with this stunning fact:

"Since 2013, the Federal Reserve Board has conducted a survey to 'monitor the financial and economic status of American consumers.' Most of the data in the latest survey, frankly, are less than earth-shattering: 49 percent of part-time workers would prefer to work more hours at their current wage; 29 percent of Americans expect to earn a higher income in the coming year; 43 percent of homeowners who have owned their home for at least a year believe its value has increased. But the answer to one question was astonishing. The Fed asked respondents how they would pay for a $400 emergency. The answer: 47 percent of respondents said that either they would cover the expense by borrowing or selling something, or they would not be able to come up with the $400 at all. Four hundred dollars! Who knew?"

Now that survey is two years old, so one hopes that the percentage has declined since then as the economy has improved. The underlying point remains, however.

In talking about Obama's legacy, however, it is impossible to ignore the structural forces at work that the financial crisis temporarily obscured. Ironically, the improving U.S. economy allows analysts and Americans to stop thinking about the crisis and start thinking about what remains wrong with the country — and what, if anything, can be done about it all.