Barack Obama's economic legacy might be judged well by history
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Barack Obama is leaving an American economy in much better shape than the one he inherited.
The global financial crisis had already erupted when he took office in 2009, and the world financial system was on the brink of collapse.
US economic growth plunged from quarterly growth of 2 per cent to -8.2 per cent, and the nation was losing 800,000 jobs a month.
Mr Obama leaves the presidency with quarterly growth at 3.5 per cent and unemployment back to pre-GFC levels.
Even before taking office, his support made a $US700 billion bank bail-out plan possible, and he later pushed for tighter restrictions on banks, tougher consumer laws and tighter capital controls.
But not a single bank boss went to jail, and critics called for direct assistance to distressed borrowers rather than the bankers who were responsible for the disaster.
The bank bailout was augmented by an $US831 billion stimulus package of tax cuts and spending, with the dual aims of immediately saving and creating jobs and encouraging investment in infrastructure, health, education and renewable energy.
Slow recovery clouds Obama's legacy
Deficit and debt hawks on both sides of politics prevented Mr Obama from boosting the stimulus and insisted on Government job cuts.
This created an unhelpful headwind to the administrations stimulus efforts, leaving it open to criticism that the stimulus was inadequate.
Unemployment continued rising, peaking at a 26-year high of 10 per cent.
So Mr Obama presided over America's longest post-war recession, placing much of the stimulus burden on the US central bank which slashed interest rates.
Unemployment has taken seven years to return to its pre-GFC levels — a result partly achieved through a fall in the participation rate as disillusioned people gave up looking for work.
Mr Obama was also unable to ensure that the benefits of the recovery were evenly shared.
Low interest rates pumped up asset prices — the stock market rallied 120 per cent during Mr Obama's tenure, second only to Bill Clinton and Ronald Reagan during the post-war period.
On the other hand, wages growth continued stagnating and income inequality became worse.
Wage earners lost jobs to technology and globalisation.
It is a mixed report card, but preventing another Great Depression might be more appreciated with the passing of time.
Topics: economic-trends, money-and-monetary-policy, us-elections, world-politics, government-and-politics, united-states
