By Josh Boak, AP
WASHINGTON — He was a first-term senator-turned-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 nine-year 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 gap between the economy’s overall health and Americans’ lingering anxieties cuts to the heart of Obama’s legacy. 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, setting the stage for Trump’s nationalist platform.
“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. Stronger Than Europe and Japan 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 both immediate and generations in the making.
Building on measures taken by George W. Bush’s administration, Obama pumped US$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 US$836 billion stimulus — a mix of tax cuts, public investments and direct aid — would prevent unemployment from rising above 8 percent.
Those projections were faulty, based on economic figures that were later downgraded. 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. Administration officials note that until the full force of the stimulus arrived, key U.S. economic measures were on the same trajectory as in the Great Depression.