What is the deficit/debt nonsense in this thread? The surplus under Clinton was artificially inflated by the tech bubble; the relatively small pre-2008 deficits under Bush were understated because of the housing bubble. Both sets of numbers were based on unsustainable economic activity. That Clinton had achieved a surplus was irrelevant because it would have been a deficit in 2002 even under the same policies; and likewise for Bush with his low deficits. Projections are based on economic fundamentals that can change in an instant. The federal budget has a structural problem that's going to make it look worse and worse: social security and Medicare are going to grow explosively, and interest payments are going to consume more and more of the pie.
The tech bubble resulted in a relatively shallow recession followed by a quick recovery. If you want to credit that to the tax cuts Bush had enacted and suggest that Obama's policies have prevented a similar recovery, so be it, but I don't think there's a good answer either way. I think it's wrong, though, to suggest that Bush was "cleaning up Clinton's mess" or that Obama was "cleaning up Bush's mess." Both presidents entered office controlling the entire government--they were able to set whatever policies they wanted. Bush focused on passing his tax cuts; Obama focused on healthcare. Both took actions that increased the deficit and consequently increased the debt, but which agenda was better economically? I'm inclined to think Bush wins there, but it really doesn't matter. Obama will add far more debt than Bush did, and that's a fact--he owns it now.
Anyway, Obama's supporters certainly shouldn't rejoice over stock market records. Most people don't own any financial assets and aren't seeing any of the benefit. The group with the greatest share of those assets is the 1%, which is trillions of dollars richer. More wealth disparity!
I worry that the Fed's quantitative easing programs have just created a bubble in asset prices: more dollars are chasing a fixed number of investments, driving yields down and prices up. I saw in this thread that someone was faulting Bernanke and not Obama, but Obama nominated Bernanke to another term as Fed chairman--he could have chosen someone else. Somehow I'm certain the Obama administration discussed and understood Bernanke's plans for quantitative easing when he made that decision. When interest rates rise, we're going to see strange results. Asset prices are likely to decline (and they'll inevitably correct to reflect economic fundamentals).
No one ever really knows what's going on. The tech and real estate bubbles seemed entirely reasonable to almost everyone before they collapsed--just a handful of people made money calling it the other way. Likewise, quantitative easing seems entirely reasonable to us now. Maybe it is, maybe it isn't--central bankers live to experiment. Stock market records on their own are meaningless because they could just be signaling the beginning of the end. If you bought into Nasdaq 5000 12 years ago, you still don't have your money back; if you bought into Dow 14,000 5 years ago, you're just now breaking even. Is that worth celebrating?
Leadership is essential, and that's where Obama should be faulted. Reagan and Clinton told us that we had the power, and that's part of what resulted in such great economic progress during their presidencies; Obama likes to run around talking about fairness, telling us we've been left behind and that it's not our fault. Wonderful populism, sure, but not at all inspiring and not succeeding. The economy is ultimately an aggregation of sentiment.
