The nearly 40 percent drop in median household net worth between 2007 and 2010 the Federal Reserve reported earlier this week was unarguably an arresting statistic. It confirmed for millions what they already knew, that the Great Recession and its aftermath have been a financial setback with few parallels.
It being an election year, partisans quickly looked for someone to blame and political advantage. Many conservatives quickly pointed the finger at President Obama, even though the net wealth of many Americans began circling around the drain as housing values plummeted well before he took office.
For many Democrats, it was about blaming President Bush, despite many of the housing and financial deregulation policies that contributed to the crisis predating him too. As the bipartisan Financial Crisis Inquiry Commission concluded in its 2011 report, the policies of both Democratic and Republican presidents and Congresses were handmaidens to the financial calamity.
In any event, White House officials weighed in Wednesday with their most detailed response yet to the Fed data.
In a White House blog post by Gene Sperling and Jason Furman, the director and deputy director of the National Economic Council, the officials looked beyond the data in the Fed's Monday release and, using other data from the central bank's researchers, showed that household net worth has actually improved since Obama took office.
An excerpt (emphasis and links in the original):
"This week, the Federal Reserve released its Survey of Consumer Finances showing the depth of the recession's impact on family finances. The numbers are a tough and brutal snapshot of the financial crisis and housing bubble that President Obama inherited. Based on other, more frequent data, the entire decline in household wealth took place before President Obama came into office and it has risen every year since he came into office. Nevertheless, these data show that wealth still has not fully recovered from the worst recession since the Great Depression and reinforces how much more work we have to do.
"The Federal Reserve conducts the Survey of Consumer Finances every three years so the latest numbers compare family finances in 2007 and 2010. Although the Survey of Consumer Finance is a useful gauge of household finances, it does not record exactly when the changes took place nor does it provide the most timely data. To look more deeply into these questions, this blog post uses another Federal Reserve survey—the Flow of Funds—which has the advantage of providing quarterly numbers and covering the period up through the first quarter of 2012. These data show:
- The entire drop in household wealth between 2007 and 2010, the period covered by the Survey of Consumer Finances, occurred in 2008—before the President took office...
- Household wealth has risen every year President Obama has been in office—by a total of 23 percent overall..."
The officials were quick to note in the post that they were by no means saying that all was rosy, or as their boss recently said to the chagrin of even many a supporter of his, that "the private sector is doing just fine."
Their point was more to note that there's been real progress by many Americans towards restoring their household balance sheets. And, yes, they also wanted to claim credit for the president for some of that and to argue, though not in as many words, that he needs four more years in the Oval Office to keep the recovery on course:
"We need to do everything within our power to help more families regain the wealth they have lost and to give more opportunities to larger circle of families to gain the level of net worth they need to provide security and opportunity for their families, which is why the President remains focused on creating jobs, strengthening the housing market, and improving the overall economy."