November 2016.

What is the final verdict on President Barack Obama’s economic record?

1 answer

He righted a sinking ship at the start of his first term. You go all the way back to the 2008... not just recession, far worse than that. Coming in, providing the confidence that America wasn’t going to go into a depression, pushing through the stimulus package, getting out of the immediate crisis in the financial and banking system, that’s a huge achievement. We now know that we should have seen it coming, that the entire foundations of the global financial system were on very shaky timbers, but everyone had blinded themselves to that or talked it away, so when it hit, towards the end of the Bush administration, it hit so quickly, and the Bush administration was frankly hapless.

Since then, if you look at the measures we usually look at, for example employment, inflation rate, he’s been pretty steady. The US has had a long period of gradual economic growth, there’s been a recovery in jobs, it has come out of recession, inflation is still very low, the stock market continues to rise, and that’s all very solid.

All that said, there are issues around the economy. Obamacare has still not dealt with the related problems of an American healthcare system which is still far too expensive and does not provide for all citizens, or reisdents. And there’s this intangible, which is that a lot of people don’t feel like they’re better off.

Since the 1980s, there has been a rise in income disparity between the wealthiest and poorest, largely because of the policies of the Reagan administration, which simply slashed taxes on the people at the top end. America really hasn’t dealt with that income disparity issue for a generation, because it would force very tough policies on taxes, for example. It has not dealt with changes in trade and investment in a global market, which is why you get so much backlash, which Trump has seized upon, against trade agreements.

So you can’t call Obama’s administration a real boom period, like we had under Bill Clinton in the 1990s, coming out of the end of Cold War, but when Obama came into office in 2009, he quite rightly said that the Bush administration had been like a group of boys that had been partying for eight years, so it was a question of coming into a relatively wrecked house and trying to rebuild it.

So Obama put out the fire, but does that mean the structure is completely rebuilt? Well, no, but that’s not purely an American issue. We’re looking at a global economy which is retrenching for a number of reasons, and that’s going to last not just beyond Obama but beyond the next presidency. This is a generational issue.

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