For most of his first term, President Obama successfully sold a line to the public that economists will tell you is, at least in part, intellectual snake oil. He managed to blame our historically slow economy almost entirely on President George W. Bush. Polls taken right after the 2012 election showed that one of Mitt Romney’s biggest failures—and the GOP presidential candidate had staked almost everything on this point—was persuading U.S. voters otherwise.
But this week’s dramatic economic news, timed with the start of Obama’s second term, suggests that the political debate, if not the actual economy, is at an important milestone. On Wall Street, the Dow Jones industrial average reached new levels, shooting well above 14,000 and exceeding the closing records set in October 2007 just before the Big Crash. On Friday, a new jobs report finally gave Obama what he’s wanted for four years: an unemployment rate that’s below where he started as president, 7.7 percent. The Labor Department said nonfarm payrolls vastly outpaced expectations by increasing 236,000 in February, dropping the unemployment rate to the lowest level since December 2008, from 7.9 percent in January. Also this week, the Federal Reserve Board reported that Americans have recovered the staggering $16 trillion lost in wealth since the recession.