Obama, Geithner Get Low Grades From Economists
By PHIL IZZO
U.S. President Barack Obama and Treasury Secretary Timothy Geithner received failing grades for their efforts to revive the economy from participants in the latest Wall Street Journal forecasting survey.
In striking contrast to President Obama's popularity with the public, a new Wall Street Journal survey of economists gives the president and his treasury secretary failing grades. WSJ's Phil Izzo and Kelly Evans discuss.
The economists' assessment stands in stark contrast with Mr. Obama's popularity with the public, with a recent Wall Street Journal/NBC poll giving him a 60% approval rating. A majority of the 49 economists polled said they were dissatisfied with the administration's economic policies.
On average, they gave the president a grade of 59 out of 100, and although there was a broad range of marks, 42% of respondents rated Mr. Obama below 60. Mr. Geithner received an average grade of 51. Federal Reserve Chairman Ben Bernanke scored better, with an average 71.
Charts and Full Results
See forecasts for growth, unemployment, housing and more. Plus, views on the auto industry, ranking Fed chairmen, grading policymakers and more. Survey conducted March 6-10. (Or download all data as .xls)Real Time Econ: Economic news and analysisComplete Coverage: Forecasting SurveyThe economists, many of whom have been continually surprised by the depth of the downturn, also pushed back yet again their forecasts for when a recovery would begin. On average, they expect the downturn to end in October. Last month, they said the bottom would arrive in August. They estimate that U.S. gross domestic product will continue to contract in the first half of this year, with slow growth returning in the third quarter.
Economists were divided over whether the $787 billion economic-stimulus package passed last month is enough. Some 43% said the U.S. will need another stimulus package on the order of nearly $500 billion. Others were skeptical of the need for stimulus at all.
However, economists' main criticism of the Obama team centered on delays in enacting key parts of plans to rescue banks. "They overpromised and underdelivered," said Stephen Stanley of RBS Greenwich Capital. "Secretary Geithner scheduled a big speech and came out with just a vague blueprint. The uncertainty is hanging over everyone's head."
Mr. Geithner unveiled the Obama administration's plans Feb. 10, but he offered few details, and stocks sank on the news. The Dow Jones Industrial Average is down almost 20% since the announcement, as multiple issues have weighed on investors' confidence. The Treasury secretary has since appeared before Congress and offered more specifics but has said action on key parts of the plan still is weeks away.
About the Survey
The Wall Street Journal surveys a group of 54 economists throughout the year. Broad surveys on more than 10 major economic indicators are conducted every month. Once a year, economists are ranked on how well their forecasts have fared. For prior installments of the surveys, see: WSJ.com/Economist.
"We have taken an unprecedented level of action toward economic recovery, accomplishing in weeks what took other countries years to do," Treasury spokesman Isaac Baker said. "While Wall Street and investors were disappointed when they didn't get a sweeping bank bailout, we've laid out a plan to stabilize the financial system while protecting the taxpayer and ensuring government funds are spent wisely. This crisis was years in the making, and it will take time to solve."
Treasury has started implementing a housing-recovery plan, moved forward on a joint program with the Fed to boost consumer lending, and has begun stress-testing banks in an effort to determine which institutions will need additional capital from the government. The results of the stress tests won't be known for a few weeks. Meanwhile, a key part of the plan -- a public-private partnership to take toxic assets off bank balance sheets -- remains in the planning stages.
The economists' negative ratings mark a turnaround in opinion. In December, before Mr. Obama took office, three-quarters of respondents said the incoming administration's economic team was better than the departing Bush team. However, Mr. Geithner's latest marks are lower than the average grade of 57 that former Treasury Secretary Henry Paulson received in January.
How's Geithner Doing?
How would you rate Timothy Geithner's job performance as Treasury secretary?
Vote: A | B | C | D | FJoin the discussion.Mr. Geithner, who is relying on a skeleton crew of advisers in the Treasury Department as the administration struggles to make key appointments to his staff, is encountering the same problems as his predecessor in dealing with the complexities of a bailout plan. Richard DeKaser of Woodley Park Research, who gave high marks to Messrs. Obama and Geithner, admitted disappointment in the delay in action but said he appreciated the magnitude of the task. "I don't know what's holding it up," he said. "But I'm assuming it's not just because they're hitting the golf course."
There was widespread initial support for the appointment of Mr. Geithner, who as president of the New York Federal Reserve had been on the front lines of the crisis since it erupted. However, in the ensuing weeks Mr. Geithner has had to deal with tax troubles and criticism from those opposed to any bailouts as well as those who think the government needs to be doing more.
Meanwhile, the economists surveyed this month predict that the economy will shed another 2.8 million jobs over the next 12 months as the unemployment rate climbs to 9.3% by December, up from the 8.1% rate recorded in February. Economists also see nearly a one-in-six chance that the U.S. will fall into a depression, defined as a decline in per-person GDP or consumption by 10% or more.
"We just keep moving the date [when the recession will end] out, hoping at some point in time we will be able to move the date back in," said Diane Swonk of Mesirow Financial.
The economists didn't just single out the U.S. for criticism; 70% of participants said the response of governments around the world to the global recession has been inadequate. "The Europeans or Japanese don't seem to be doing near enough to kickstart their economies," said Nariman Behravesh of IHS Global Insight. "It could be we've done all the right things, but the rest of the world goes down the tubes."
Despite the growing criticism elsewhere, the respondents were broadly supportive of the Fed. More than 85% of the economists agreed that the central bank's proliferating lending programs are well-designed, well-executed and helping the economy. And while grades for Mr. Bernanke remain off of their 2007 highs, the average has stabilized after falling as low as 69 in the November survey.
Amid all the gloom, there is a bright spot: Four-fifths of the economists said now is a good time to buy equities, especially if the investor has a long-term view.
Write to Phil Izzo at philip.izzo@wsj.com
We Ukweli, I appreciate the fact that you try to bring debate, but you are desperately trying to dig up negative news, thus it is obvious that you are like Limbaugh waiting for Obama to fail. Unfortunately it is too early for even WSJ to say if Obama administration is doing a good job or not.
I wonder where the media pundits were during the Iraq invasion? If they could have been so vocal in their opposition maybe America wouldn't be in teh economic mess that it is right now!
I would expect this kind of answer from an Obantu sycophant. Let me ask you this, is it too early for Obantu to spend more money (that he doesn't have) than any other human being in history of mankind? Putting the future of a nation and generations to come at a tremendous financial risk? Is it too early for Obantu to sign a multitude of executive executive orders than have a potential for serious consequences down the line? If it is not too early for Obantu to screw up then it is not too early for the media or anyone else to grade him. Simple as that!
Whatever economic problems caused by Iraq invasion, they pale in comparison to the ones already caused by Obantu. The man is a screw up. The stock market wealth has been driven to the ground, massive job losses, negative economic growth, all under Obantu's watch. Bush with all his faults, he wasn't nearly as incompetent as Obantu. And get this, Obantu will be (heck, he already is) a bigger war monger than Bush which means even a bigger economic mess is ahead.
You are a Bush lover and Obama hater, but be reasonable! You mean to tell me that the deep economic problem that we experience today is due to Obama's 2 month at the helm? Come on! This is the full blown consequence of a President who was on leave for 1 year before he handed over power - George W Bush! The guy was AWOL when he was really needed in 2008 and things were growing worse by the day. Madoff stole on Bush's watch, banks nearly collapsed while his admin looked the other way, etc. You think that the indiactors we see today are about today? No, they are about yesterday my friend.
So hold back the venom and take a deep breathe!
You need to get over George W. Bush. After all there is plenty of blame to go around. Democrats have controlled both houses of Congress for the past three years and I don't hear you say anything about them. I wonder why?
BTW Obama admin has pushed back Dubya definition and abandons the term 'enemy combatant'.
You are a Bush lover and Obama hater, but be reasonable! You mean to tell me that the deep economic problem that we experience today is due to Obama's 2 month at the helm? Come on! This is the full blown consequence of a President who was on leave for 1 year before he handed over power - George W Bush! The guy was AWOL when he was really needed in 2008 and things were growing worse by the day. Madoff stole on Bush's watch, banks nearly collapsed while his admin looked the other way, etc. You think that the indiactors we see today are about today? No, they are about yesterday my friend.
So hold back the venom and take a deep breathe!
Can we expect an objective survey from WSJ, with its reputation secure as a conservative opinion newspaper? Big No
WASHINGTON -- President Barack Obama enjoys widespread backing from a frightened American public for his ambitious, front-loaded agenda, a new poll indicates.
He is more popular than ever, Americans are hopeful about his leadership, and opposition Republicans are getting drubbed in public opinion, the new Wall Street Journal/NBC News poll suggests.
The president's support, while still deep, looks increasingly partisan as Republicans move away from him. Americans have more confidence in the president himself than in some of his initiatives, such as the economic stimulus package, and have some hesitation about his plans to raise taxes to expand health coverage.
"The American people trust him and like him," Rahm Emanuel, the White House chief of staff, said in an interview. "That's how you make change possible, because it's not threatening but accessible."
To that end, the president emphasizes the aspects of his program that are easiest to support. On energy, he focuses on the upsides of alternative energy and the need for efficiency, glossing over the impact of punishing polluters. On health care, he focuses on the need to reduce the cost of care, with the need to help the uninsured always mentioned second.
House Minority Leader John Boehner (R., Ohio) predicted that Mr. Obama will have trouble moving his agenda. "Everyone knows that the president remains popular, but let's be honest: The solutions Democrats are pushing are not," he said in a statement.
The poll found a sharp jump in the proportion of Americans who say the nation is "generally headed in the right direction" since Mr. Obama's January inauguration, a period when economic indicators and financial markets have suggested the opposite. The survey shows that 41% of Americans say the country is headed in the right direction, up dramatically from 26% in mid-January, before Mr. Obama took office, and up from 12% before the election.
Venezuela's President Hugo Chavez said on Sunday his U.S. counterpart Barack Obama was at best an "ignoramus" for saying the socialist leader exported terrorism and obstructed progress in Latin America.
"He goes and accuses me of exporting terrorism: the least I can say is that he's a poor ignoramus; he should read and study a little to understand reality," said Chavez, who heads a group of left-wing Latin American leaders opposed to the U.S. influence in the region.
Chavez said Obama's comments had made him change his mind about sending a new ambassador to Washington, after he withdrew the previous envoy in a dispute last year with the Bush administration in which he also expelled the U.S. ambassador to Venezuela.
"When I saw Obama saying what he said, I put the decision back in the drawer; let's wait and see," Chavez said on his weekly television show, adding he had wanted to send a new ambassador to improve relations with the United States after the departure of George W. Bush as president.
In a January interview with Spanish-language U.S. network Univision, Obama said Chavez had hindered progress in Latin America, accusing him of exporting terrorist activities and supporting Colombian guerrillas.
"My, what ignorance; the real obstacle to development in Latin America has been the empire that you today preside over," said Chavez, who is a fierce critic of U.S. foreign policy.
In the 20th century the United States supported several armed movements and coups in Latin America. Chavez says Washington had a hand in a short-lived putsch against him in 2002, which was initially welcomed by U.S. officials.
Chavez and Obama will both attend the Summit of the Americas in Trinidad and Tobago next month. It is not known whether they will meet.
Most of OPEC nation Venezuela's export income comes from oil it sells to the United States, but Chavez has built stronger ties with countries like China in an attempt to reduce dependence on his northern neighbor.
Chavez expelled its U.S. ambassador in September in a dispute over U.S. activities in his ally Bolivia, which also expelled its U.S. ambassador. Ecuador's left-wing President Rafael Correa this year kicked out a mid-ranking U.S. diplomat.