President Obama says the recent jobs report shows the economy is recovering; but it would be doing even better, he asserts, if Republicans would end the deadlock and pass his tax-increasing, big-spending agenda. To the contrary, a stronger case can be made that the economy is improving precisely because Obama and Congress are deadlocked.

Let’s start with Obama’s pejorative accusation that this is a do-nothing Congress, which he uses to justify circumventing the legislative branch.

According to the House of Representatives’ Office of the Clerk, 125 public bills were enacted into law in 2009, Obama’s first year in office, and 258 in 2010, including Obamacare.

But Republicans took over the House in 2011, after a massive voter pushback against the president, Obamacare and the Democratic agenda. As a result, only 90 public bills were enacted in 2011. That number climbed to 193 in 2012—a presidential election year, which usually means both parties are trying to placate voters—but fell to 73 in 2013, and 35 so far this year (with not much time left).

The Clerk’s office only quantifies the enacted bills without assessing their importance, but the number of enacted bills has declined. However, as enacted bills declined the economy improved.

While correlation is not causation, a case can be made that the economy is doing better because Congress is doing less.

Take a look at the unemployment rate. According to the Bureau of Labor Statistics it was 7.8 percent in January 2009 when Obama took office. It climbed to 9.7 percent in January 2010, an increase of 1.9 percentage points—even though Obama’s economic team promised their major spending bills, like his stimulus package, would keep unemployment below 8 percent.

By January 2011 unemployment was down to 9.1 percent. A year later in 2012 it was 8.2 percent, 7.9 percent in January 2013, 6.6 percent in January of this year, and 6.1 percent now. In other words, the biggest decline in unemployment came at the same time that the president ramped up criticism of the do-nothing Congress. And given that this year Congress is on track to be one of the least productive in history, it will be interesting to see if unemployment drops even more.

Or let’s look at the stock market. In 2013 the Dow went up 26.5 percent, the S&P 500 was up 29.6 percent and the Nasdaq was up a whopping 38.3 percent. The Dow was up only 5.5 percent in 2011 and 7.2 percent in 2012.

The stock market usually takes off right after a recession’s end, which in this case was July 2009. So why did it only start gaining momentum years after the end of the recession? No doubt the Federal Reserve Bank’s easy money policy has played a role, but the market exploded only after it became clear the budget sequester cuts would actually take effect in March 2013.

You remember the budget sequester. That was Obama’s budget-cut proposal—though the White House denied it until Washington Post reporter BobWoodward  called them out on it—which he never thought would be implemented.  As the March 2013 deadline drew near, Obama and his economic team tried to scare the country by claiming the sequester’s forced budget cuts would destroy the economy. The economy actually improved and the stock market zoomed—even as Congress and the president deadlocked.

According to the St. Louis Federal Reserve Bank’s Economic Policy Uncertainty Index, economic uncertainty was abnormally high for most of Obama’s early years—when he could get the Democratically controlled Congress to pass most of what he wanted.

But uncertainty began a gradual decline, especially after mid-March 2013 when the sequester cuts kicked in. Uncertainty increased significantly during the government shutdown last fall, but has been on a steady decline since.

And the reason for the uncertainty decline seems clear: Businesses are fairly confident that the Republican-led House will put a check on Obama’s goal of increasing taxes, spending and regulations. Thus, instead of stifling business investment, the current deadlock is facilitating it.

Congressional action could boost economic growth, as Obama suggests, but only by passing pro-growth legislation—e.g., cutting corporate tax rates and government spending, ending corporate welfare and repealing Obamacare, etc. But the president won’t sign that legislation.

In short, Obama and his economic team have been wrong on virtually every economic prediction they’ve made. If we consider the president’s economic track record, there is every reason to believe that his current proposals—the ones he is so frustrated Republicans won’t pass—would do even more damage. Better to have a Congress that does nothing than one that does all the wrong things—and business and the economy apparently agree.


Merrill Matthews is a Resident Scholar at the Institute for Policy Innovation. Read more at www.ipi.org.