How Has The Economy Changed Since 2008 Elections?
MICHEL MARTIN, HOST:
I'm Michel Martin and this is TELL ME MORE from NPR News. Coming up, the NFL is in the middle of another lockout, but it's not the players. We'll get more from Sports Illustrated's Pablo Torre in just a few minutes.
But, first, as we've mentioned, the Republican National Convention is taking place this week in Tampa, weather permitting. The main theme figures to be the economy, with good reason. In a New Washington Post ABC news poll, 71 percent of respondents said President Obama's handling of the economy will be a major factor in their vote.
Now, you've probably already figured out the two major parties' respective arguments. Republicans say President Obama is at fault for or hasn't done enough to fix poor economic conditions. Democrats say things are getting better under their watch and, in any case, are just trying to clean up eight years of mess from George W. Bush's presidency.
We figured this was a good time to try to get a sense of the economy, so we want to look at some numbers with NPR senior business editor Marilyn Geewax. Marilyn, welcome back. Thanks so much for joining us once again.
MARILYN GEEWAX, BYLINE: Hi, Michel.
MARTIN: So let's go back four years to August of 2008, the convention season four years ago. What was the economy like then?
GEEWAX: But that was really one of the most frightening times in American economic history. You have to go back to, really, October of 1929 to see a period that was as tumultuous as that period was in 2008 for the last conventions.
So, you know, you really are coming off a situation. At that time, the housing market was collapsing. Employers were laying workers off and, really, all of our big financial institutions were lurching towards a kind of chaos. Institutions were filing for bankruptcy. Fannie Mae and Freddie Mac had to get put into a government conserva - ship(ph).
So it was a very difficult time, so bad that, on September 24th, John McCain who, at the time, was the Republican presidential candidate - he actually said he was going to suspend his campaign for a few days just to come back to Washington and try to deal with this crisis.
So, this year, where are we? It's a very different kind of economy. It's sort of an ongoing and persistent problem, but it's not the kind of chaos we were seeing in 2008.
MARTIN: You talk about jobs, particularly. Let's just sort of focus on employment.
GEEWAX: Yes. Just to narrow it down on jobs, because, of course, that's obviously the main issue, all of this year, we've been seeing the economy veering back and forth between 8.1 percent and 8.3 percent, so that's a very narrow range and, mostly, it just goes up a little bit, goes down a little bit. But the thing is it's not good. It's - you know, we've got 12.8 million people still unemployed. It's bad.
But, on the other hand, if you wanted to argue, four years ago in 2008, the economy was really falling apart then.
MARTIN: So the economy's adding jobs, but not fast enough to soak up...
GEEWAX: But just not fast enough.
MARTIN: ...to soak up all the people who had...
MARTIN: ...already been laid off.
GEEWAX: When President Obama came into office in January of 2009, that month alone, the country lost more than 800,000 jobs. This year, the country has been, on average, adding a little bit over 150,000 jobs every month, so - yes - jobs are up, but is it enough to make up for all those jobs that were lost in the past, all the people who've been unemployed for two, three, four years? No. The growth is not fast enough yet to absorb all the people, so a fair argument could be made in either direction, that the economy is pretty bad, but then it's better than it was.
MARTIN: We're talking about the economy on the eve of the beginning of the first convention, the Republicans who are meeting in Tampa starting tomorrow. We're talking with Marilyn Geewax, NPR senior business editor. We're talking some of the numbers. What about housing? You know, housing - the housing market has so much to do with how people feel about the economy...
GEEWAX: Yes, absolutely.
MARTIN: ...as well as kind of the objective - you know, as well as unemployment and all these other things and, also, all these other businesses like carpeting and accessories and furniture and all these other things.
GEEWAX: Right, right.
MARTIN: Talk about housing, if you would.
GEEWAX: Drapes, all of that. Landscaping. So many things are tied to housing. So, again, where are we compared with 2007? Home prices are still down by, like, a third. That's huge. That's very depressing. That means a lot of people out there are underwater, still lots of foreclosures, lots of short sales, so we have distressed sales and distressed homeowners who feel, really, pretty frightened.
On the other hand, after having gone through such a bad cycle, we seemed to have hit bottom. I would say that the general opinion of economists is that the market has bottomed. It's coming up a little bit. There are some places that are actually really robust. The Washington, D.C. market is pretty strong. Bismarck, North Dakota, parts of Seattle, Texas. There are places where the housing market is doing actually quite well.
MARTIN: What about nationally? What's the average sales price this year, right now, compared to last time? Compared to four years ago?
GEEWAX: Well, this summer, the National Association of Realtors said that the average sale price for an existing home is up seven percent from last year. So again, you know, remember that we're down by a third, but we're up seven percent in the past year so that I would say most economists would have to describe the housing market as stabilizing and somewhat improving.
MARTIN: What about the stock market? I mean, that's something that a lot of people pay attention to, even if they don't have a lot of money invested in the market. Many people have their pension funds or 401Ks invested in the stock market and it's something that a lot of people take a look at on, you know, television, on the news shows. How's that?
GEEWAX: You hear about it a lot and a lot of people - even if you don't think you're a very wealthy person or whatever, you may have a lot more money in stocks than you think because that's where your pension is invested. So, if you're expecting a pension or for your 401K to pay off when you're an older person, you need to have the stock market growing.
Well, in 2008, we were in such a choppy period that, one day alone - I was looking at just September 29th, 2008. The stock market lost seven percent of its value, just in an afternoon. So we're nowhere in that kind of realm. Right now, the stock market has actually been doing pretty well this summer.
Compare this. The Dow Jones Industrial Average - that's a measure of how well the stock market is doing. In October last year, it was at 10,400. Right now, it's over 13,000. So if you go from 10,000 to 13,000, that's pretty good. On the other hand, you could look at it and say, you know, we're still below where we were in 2007. So are things better? Yes, they are. They've gotten better. Are they as good as one would hope? No. We're still not even back to where we were five years ago. So again, it's kind of a mixed picture.
MARTIN: So, Marilyn, how do you think people are using this data? I mean, you know, we look at this data. Certain people look at this data and just look at the numbers for the numbers, but how do you think voters are using this data? You think they're looking at it in terms of how they personally feel, what their personal circumstances are or do you think they're looking at it in terms of kind of what their political world view is, anyway, or the character of the two candidates? How do you think that voters are looking at this?
GEEWAX: Political scientists look back on election results and the studies show that, when the unemployment rates is as bad as it is right now, that the incumbent is not likely to be reelected, that this is a very tough environment because people do internalize these numbers. For example, that business of more than 12 million people being out of work, even if you yourself are not out of work, you know you're not in a strong position to demand a raise. There's a lot of other people who would take your job for you.
So, even if you're not unemployed, it weighs on you and it does affect your view of the election. However, if you think back to where you were in 2008 and how frightening that period was, well, maybe you feel more reassured. So it's a very open question, how people will interpret the handling of the economy.
MARTIN: Marilyn Geewax is a senior business editor with NPR. She was kind enough to join us once again in our studios in Washington, D.C. Marilyn, thanks so much for being here.
GEEWAX: Oh, you're welcome. Always fun to be here. Transcript provided by NPR, Copyright NPR.