OBAMA’S MIXED ECO­NOMIC LEGACY

But those left out of the re­vival spurned his legacy for Trump

The Denver Post - - BUSINESS - By Josh Boak The As­so­ci­ated Press

Barack Obama will leave be­hind an econ­omy far stronger than the one he in­her­ited but one that did not erase the scars of the col­lapse — Amer­i­cans’ deep dis­trust in their gov­ern­ment, banks and in­sti­tu­tions. »

H e was a first-term sen­a­tor­turned-pres­i­dent, a for­mer law pro­fes­sor with lit­tle ex­pe­ri­ence in eco­nom­ics or man­age­ment. When he en­tered the White House he had one es­sen­tial task: piece to­gether the shards of a shat­tered U.S. econ­omy.

It wasn’t smooth and it wasn’t fast. But Pres­i­dent Barack Obama will leave be­hind, by most mea­sures, an econ­omy far stronger than the one he in­her­ited. Un­em­ploy­ment is 4.6 per­cent, a nineyear low. Stocks keep set­ting highs. An ad­di­tional 20 mil­lion Amer­i­cans have health in­surance cover­age. The na­tion has shifted to­ward cleaner en­ergy sources: nat­u­ral gas, wind and so­lar.

Yet it’s also an econ­omy that left many peo­ple feel­ing ne­glected. Polling af­ter the Novem­ber elec­tion found that nearly two-thirds of vot­ers de­scribed the econ­omy as “not so good” or “poor.”

The costs of hous­ing, col­lege and pre­scrip­tion drugs kept out­pac­ing pay­checks. Job op­tions had been dwin­dling for work­ers with only high school di­plo­mas even be­fore Obama took of­fice, but the down­turn and slow re­cov­ery mag­ni­fied the pain of that trend. Many peo­ple gave up look­ing for work. Strug­gling ru­ral towns never en­joyed the up­lift that ben­e­fited ma­jor cities.

Fu­eled in part by such chal­lenges, vot­ers chose to pass the pres­i­dency to Don­ald Trump, a Repub­li­can who had railed against a weak econ­omy and promised to undo many of Obama’s poli­cies.

The pres­i­dent and his team took his­toric ac­tions to pull the econ­omy back from the brink. But those very steps failed to help swaths of Amer­ica and turned many peo­ple against his poli­cies.

“We saved the econ­omy from a fail­ing fi­nan­cial sys­tem, though we lost the coun­try do­ing it,” Obama’s first trea­sury sec­re­tary, Tim Gei­th­ner, con­cluded in his 2014 mem­oirs.

Cri­sis decades in mak­ing

Eco­nomic prob­lems that had been sim­mer­ing for decades started to boil with the Great Re­ces­sion of 2007-2009. It sud­denly be­came Obama’s re­spon­si­bil­ity to ad­dress prob­lems that were im­me­di­ate and gen­er­a­tions in the mak­ing.

Build­ing on mea­sures taken by Ge­orge W. Bush’s ad­min­is­tra­tion, Obama pumped $412 bil­lion into tee­ter­ing banks, trou­bled fi­nan­cial firms and the strug­gling au­tomak­ers Gen­eral Mo­tors and Chrysler. The in­fu­sion was stig­ma­tized for be­ing a gov­ern­ment bailout, though the money was ul­ti­mately re­paid.

Then there was the Re­cov­ery Act, known as the “stim­u­lus,” en­acted less than a month af­ter Obama took the oath of of­fice in 2009. Ad­min­is­tra­tion es­ti­mates ini­tially sug­gested that the $836 bil­lion stim­u­lus — a mix of tax cuts, public in­vest­ments and di­rect aid — would pre­vent un­em­ploy­ment from ris­ing above 8 per­cent.

The 8 per­cent un­em­ploy­ment pro­jec­tion ul­ti­mately be­came a po­lit­i­cal al­ba­tross as the rate peaked at 10 per­cent that Oc­to­ber — proof to some Repub­li­cans that the stim­u­lus had failed.

But there’s lit­tle doubt the bill made an im­pact. The U.S. re­cov­ery was, and con­tin­ues to be, stronger than in economies in Europe and Ja­pan.

Even more po­lar­iz­ing was the 2010 Pa­tient Pro­tec­tion and Af­ford­able Care Act, a ma­jor ex­ten­sion of the fed­eral so­cial safety net.

Just 8.9 per­cent of Amer­i­cans now lack health in­surance — a his­toric low, ac­cord­ing to the Na­tional Cen­ter for Health Sta­tis­tics. But crit­ics com­plain that Obama’s health care law brought bu­reau­cratic headaches and bur­den­some costs. The av­er­age pre­mium for plans un­der the health care law next year jumped 22 per­cent, an in­crease that will be off­set some­what by fed­eral sub­si­dies.

The com­bi­na­tion of all these acts fu­eled a con­ser­va­tive back­lash that would pro­pel dozens of Repub­li­cans into Congress, cost­ing Democrats con­trol of the House in 2010 and bring­ing Obama’s eco­nomic agenda to a halt.

The following years would be de­fined by deficit bat­tles, bud­get cuts, stand­offs over the debt and a com­pro­mise on tax cuts.

Through­out it all, while Amer­i­cans be­came dis­il­lu­sioned by the bick­er­ing in Wash­ing­ton, Obama’s econ­omy slowly crept back.

Some were left out

Yet the re­cov­ery re­mains un­even, so much so that Obama never took a full vic­tory lap. The pres­i­dent rou­tinely has fol­lowed his re­marks about the heal­ing econ­omy with the caveat that more progress was needed.

“His­to­ri­ans will re­mem­ber Pres­i­dent Obama for his ra­tio­nal, ev­i­dence-based ap­proach,” said Alan Krueger, a for­mer eco­nomic ad­viser, “as op­posed to the emo­tional, vis­ceral style of the two pres­i­dents who will book­end his time in of­fice.”

Obama of­ten spoke with re­straint and gov­erned through pol­icy, rather than whip­ping up public out­rage against firms linked to the fi­nan­cial cri­sis.

Frus­tra­tions rise

While vot­ers re­turned Obama to the White House in 2012, there was a nag­ging sense of a sys­tem rigged against them — a frus­tra­tion that Trump tapped ef­fec­tively.

The Repub­li­can busi­ness­man barn­stormed through ru­ral white Amer­ica, talk­ing at a gut level to sup­port­ers whose com­mu­ni­ties felt left be­hind by the re­cov­ery. He prom­ises to re­turn man­u­fac­tur­ing and min­ing jobs that most economists be­lieve are long lost.

Trump chal­lenged the ac­cu­racy of the un­em­ploy­ment rate, since many Amer­i­cans gave up search­ing for jobs and were no longer counted as un­em­ployed. He has promised ma­jor spend­ing on in­fras­truc­ture and tax cuts. He says he plans to elim­i­nate reg­u­la­tions and re­peal and re­place Obama’s health care law.

“Trump’s vic­tory is very harm­ful to his legacy — Obama un­der­stood that,” said Stephen Moore, a fel­low at the con­ser­va­tive Her­itage Foun­da­tion who ad­vised the Trump cam­paign. “It’s why he cam­paigned so hard for Hil­lary Clin­ton.”

Pres­i­dent Barack Obama signs the $836 bil­lion eco­nomic stim­u­lus bill in Den­ver on Feb. 17, 2009, at the Den­ver Mu­seum of Na­ture and Sci­ence as Vice Pres­i­dent Joe Bi­den looks on. He­len Richard­son, Den­ver Post file

Rich Pe­dron­celli, The As­so­ci­ated Press

GOP pres­i­den­tial can­di­date Don­ald Trump ges­tures to his “Make Amer­ica Great Again” hat in June.

Newspapers in English

Newspapers from USA

© PressReader. All rights reserved.