Evaluating the Obama Administration's Economic Record
As the United States prepares to elect the country’s 45th president, the economic record of its 44th president, Barack Obama, is increasingly being scrutinized by Democrats and Republicans alike. This highlights the fact that, not only does the economy remain a dominant factor in national elections in the United States, but also that President Obama’s economic record can be interpreted in a number of ways. While many of the economic records of recent US presidents are viewed, rightly or wrongly, in either a clearly positive (Clinton and Reagan) or negative (Carter, Bush II) light, President Obama’s economic record has proven to be much more difficult to interpret. Certainly, President Obama inherited an economic mess and has found the global economic climate to be a major impediment to the US economy during his eight years in power. Nevertheless, there is also little doubt that the recovery from the financial crisis and its subsequent recession has been among the weakest economic recoveries in US history.
It is hard to argue that President Obama inherited one of the worst economic situations that any president in US history was forced to deal with. In fact, the economic situation in early 2009, when President Obama took office, was the worst situation for a new US president since Franklin Roosevelt took office in early 1933, more than three years after 1929’s Wall Street crash that led to the Great Depression. Interestingly, while Franklin Roosevelt is considered one of the greatest-ever US presidents (thanks largely to his role in the Second World War), his administration struggled to revive the US economy after the Depression, with a major recession hitting the US in 1937-1938 after a three-to-four year period of recovery. In fact, only during the Second World War was the US economy completely able to safely exceed pre-Depression levels of economic output. While the economic contraction in the wake of the financial crisis was far less severe that following the Great Depression, the US economy was also able to return to pre-crisis levels of growth rather quickly, certainly much more quickly than most other large developed economies. However, the lingering domestic impact of the crisis, coupled with a very difficult international economic environment, resulted in a rather sluggish economic recovery during President Obama’s first four years in office, and much of the blame for the economic struggles during this period fell at the feet of the previous administration.
It is the economic record of the second term of the Obama Administration that largely draws mixed reviews, as this covers the period four to eight years after the financial crisis. Unfortunately, the scale of the economic recovery from this crisis was much smaller than had been expected, with the average annual rate of economic growth over the past four years being just above 2%. Moreover, 2016 has seen a further slowdown, with the US economy forecast to grow by just 1.6% this year, well below the expectations from the beginning of the year. While this reflects badly on the Obama Administration, it should be noted that the international economic climate is very poor, with other developed economies in Europe and Asia struggling to grow and with key emerging markets facing serious crises. Moreover, this poor external environment, coupled with economic and political uncertainty at home, has had a major impact on business confidence in the US, and this has played a key role in the disappointing economic results in recent years. Altogether, while it is clear that the Obama Administration has overseen an economic recovery in the United States, this recovery must be considered to be disappointing.
Given the economic situation that President Obama inherited in 2009 and the international economic climate of recent years, it is very hard to evaluate the administration’s record of managing the US economy. On the positive side, the US economy’s growth in recent years is closer to the global average than anytime since the late 1990s, and when compared with other developed economies, the US economy is outperforming most its peers by a sizeable margin. Furthermore, many of the external factors that have held down the US economic recovery cannot be blamed on the Obama Administration.
However, in other areas, the Obama Administration has failed to help boost economic growth in the United States. For example, the current administration has done little to boost business confidence in the US, and this has played a key role in the relative low levels of investment by US businesses in recent years. In addition, the Obama Administration has struggled to improve the situation for lower-skilled workers in the US that are struggling to find a role in the 21st century US economy. As such, it is little surprise that Donald Trump has found support among segments of the business community and the working class in this year’s presidential election. Nevertheless, it is also little surprise that, given the comparative state of the US economy during the last two Democratic-led administrations, many voters in the US are leaning towards Hillary Clinton in this year’s election.
No matter what happens, it is clear that the economy remains the leading issue in the United States during election season and this is being proven again in 2016’s most unusual presidential election.