Posted by Joseph Y. Calhoun, III

That’s what this Bloomberg article seems to imply:

March 10 (Bloomberg) — The political consensus may be that President Barack Obama’s handling of the economy has been weak. The judgment of money in all its forms has been overwhelmingly positive, and that may be the more lasting appraisal.

One year after U.S stocks hit their post-financial-crisis low on March 9, 2009, the benchmark Standard & Poor’s 500 Index has risen more than 68 percent, and it’s up more than 41 percent since Obama took office. Credit spreads have narrowed. Commodity prices have surged. Housing prices have stabilized.

“We’ve had a phenomenal run in asset classes across the board,” said Dan Greenhaus, chief economic strategist for Miller Tabak & Co. in New York. “If he was a Republican, we would hear a never-ending drumbeat of news stories about markets voting in favor of the president.”

The economy has also strengthened beyond expectations at the time Obama took office. The gross domestic product grew at a 5.9 percent annual pace in the fourth quarter, compared with a median forecast of 2.0 percent in a Bloomberg survey of economists a week before Obama’s Jan. 20, 2009, inauguration. The median forecast for GDP growth this year is 3.0 percent, according to Bloomberg’s February survey of economists, versus 2.1 percent for 2010 in the survey taken 13 months earlier.

And what exactly has President Obama’s administration done that warrants credit for the improvement in the economy? The stimulus package? That’s an ongoing disucussion and those who approved of it beforehand claim it has done wonderful things and those who didn’t approve (including me) say it has provided marginal support at best if not an outright headwind to the economy. Economists can’t agree on the impact, but the public has decided that it was ineffective. Why? Well, my guess is that the various corruption scandals surrounding politicians at all levels means that the public just doesn’t trust anyone in government to tell the truth about the impact. Indeed we have reached a point where if a politician says one thing, the knee jerk reaction of the public is to believe the opposite. In other words, the trust deficit is why Obama gets no credit for any stimulus effects. Effective or not, the public doesn’t trust the administration to tell the truth.

All of the things cited above can actually be credited to the Fed’s efforts. It isn’t coincidence that the economy started to improve at the same time the Fed announced their Quantitative easing program last March. It was around the same time that Geithner announced his stress tests and later the PPIP, but the stress tests were a joke and the PPIP is basically non existent. Call that another strike out for the administration.

I am willing to concede only that the stimulus has had a minor effect, primarily on disposable income due to the tax rebates. Everything else the administration has done has been, at best, ineffective and at worst a hindrance to recovery. Cash for clunkers merely pulled auto sales forward and paid people to do what they would have done anyway. The same is true of the first time home buyer’s tax credit. We are experiencing the hangover from both those programs right now and it should be noted that the economy hasn’t fallen back into recession because cash for clunkers expired. And it won’t fall back into recession when the tax credit expires.

Obama’s approval rating isn’t in the toilet because of what he has done. It’s in the dumper because of the things he’s tried to do but failed at - so far - such as health care reform and cap’n trade. If he actually had passed those two pieces of legislation in the form preferred by the Democratic Congress, there wouldn’t be a debate about who gets credit for the recovery because there wouldn’t be one.

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