Obama’s economy summed up
When Barack Obama came into office, he was facing the worst economy since the Great Depression.
He had the incredible tasks of rebooting the American economy. The peak of the great recession saw many classic signs of a depressed economy with near zero percent inflation, an S&P 500 price to earnings ratio over 100, skyrocketing unemployment, etc.
This peak recession also saw the election of a new president, Barack Obama.
Though controversial, when in office, President Obama, in collaboration with Congress, the Federal Reserve, and the Treasury, introduced and passed measures to stimulate the economy. These changes included sweeping regulation reform, collapsing interest rates to zero percent, and increasing government spending by billions over years.
As President Obama’s time in office comes to a close, the eight years of data collection allow for a reasoned judgment, currently about his economic legacy. The data supports the idea that Obama, at the very least, led the economy to recover within his own philosophy.
President Clinton, in regards to the economic crisis, said, “there’s a more liberal way to do this, a more conservative way, but the best [way] to do it, is to do it quickly,” so of course, more conservative policies could have led to a recovery greater than or equal to the current recovery.
However, certain things like lowered interest rates and banking regulation are requisites to success, considering the housing collapse and the involvement of the banks.
The conclusion of 2016 leaves the United States with a 4.7 percent unemployment rate, near two percent (healthy) inflation and a PE ratio of around 25. The labor force participation lags behind, but the steady decline of the labor force participation rate began in 2000, which includes factors such as automation, increased retirement rates and lack of labor market confidence.
However, the post-WWII economic boom, which President-Elect Donald Trump often spouts as the previous American golden age, was characterized by a Labor Force Participation rate of around 58 percent, so considering the LFP today is 62 percent, this means it is headed in a logical direction.
Of course, no economic recovery is completely smooth or obvious in nature, but at the macro level, the economy remains in a better position than in 2008. Those denying an economic recovery are either ignorant or purposely dense.
Some say the economy is operating in a bubble, but the bubble for the past 75 months of job growth shows no signs of bursting.
Opinion columnist Cameron Barrett is an economics senior and can be reached at [email protected].