Analysis Post

The American economy has been in ruins for a while now. Since late 2007 to be exact.  In that time we have seen thousands of American citizens lose their jobs and many more who are looking for work but it’s just not available. We have seen the passage of numerous, very expensive bills and stimulus plans that have attempted to get the country back on its feet. We have seen debate after debate over what should actually be done to pull our economy out of this recession and there still is no concrete solution. Obama and his administration are working tirelessly, trying to find a way to reignite our country’s economy. They have offered many ideas and strategies regarding ways in which they can get the country back on its feet. Some of the more notable ones include the new health care reform and the Stimulus bill that was passed. Despite the efforts of Obama and his administration over the past 18 months, our economy just hasn’t seemed to pull out of the economy yet. He and his colleagues are under intense scrutiny from some people, and praise from others, thus creating many different stances and beliefs on the policies. Some people see an upward trend in the markets that signal economic recovery while others believe that the Obama economic plan is failing miserably, just making things worse. Public discourse has had many fluctuations since Obama and his team began making changes. Many people who agreed with him originally have changed their opinions and visa versa. The economic policies that Obama is using are complex and prove to be a highly debatable topic around the country today.

The way I see it, there are many facets that contribute to this argument. Economically, Obama and his administration have made many decisions and passed numerous laws, some with greater impact than others, that have all played a role in developing the discourse that revolves around this topic. Such contributors include (but are not limited to) the stimulus bill, the health care reform, public opinion, and even the war in Iraq. These few things are only grazing the surface of what has come to be known as “Obamanomics”. The overall aim of Obama’s economic agenda is to create new jobs, find an immediate response to our financial crisis and even help out in the housing market.

             “Obamanomics” is the title for the economic policies enforced by Obama and his advisors. Obamanomics pursues lower tax rates for companies that meet specific requirements, as well as calling for increased taxes for higher-income families along with increased fiscal input towards “education, healthcare and the sciences.” There are many different stances regarding Obamanomics. However, I believe the two most common (Anti-Obama and Pro-Obama) coincide with political party stance – Republicans and Democrats. Republicans tend to favor  “Reaganomics” more than anything else - an economic policy that promotes saving, investment, entrepreneurship and work by cutting taxes and strict control over government spending. Democrats tend to side with a Keynesian economic policy more than anything else, which is what Obama is doing. Keynesian economic policy follows the principle that government intervention in the economy is the best way to circulate money. In the 1980’s the economy was actually worse off than it is today. Yet, President Reagan’s economic policies lead to a complete revival from the recession and in only two years time. The Obama administration's economic policies, however, do not include any of the Reagan components that did so well for our economy. Actually, they have quite the opposite.  The stimulus plan is the most expansive increase in government spending in history (Keynesian aspect). Anti-Obama citizens like to contrast Obamanomics with Reaganomics to demonstrate the faults that Obama’s economic policies have. This is probably because Reagonomics worked magnificently in the 80’s to jump-start the American economy, and today Obamanomics are, according to public opinion polls and numbers, failing.

Although Obama and his administration are doing all they can to save our economy (or at least it seems that way), I just don’t it getting any better. Many people across the nation are deeply upset with Obama’s economic mindset and do not mind voicing their opinions. We can infer these people to be “Anti-Obama”. For example, Ivan G. Seidenberg, Chief Executive of Verizon Communications, claims that Democratic leadership in the White House (and in other key positions in the government) is hampering economic growth by pursuing tax-cuts and dumb policy changes that "harm our ability . . . to grow private-sector jobs in the U.S." His statements seem to reflect America’s growing “discontent” with Obama and his economic policies. Similarly to Seidenberg, Newt Gingrich (a Republican economist) believes that Obamanomics is killing jobs rather than creating them. His logic is that “modern left-wing policies” frighten small businesses, independent producers, entrepreneurs, and investors – thus destroying potential jobs. The difficulty of finding a job, along with high anxiety caused from the “uncertain” economy is leading to deep public unrest.

According to recent survey reports, the public is beginning to believe that Obama’s policies are hurting the economy. The proportion of people who think that Obama’s economic policies have made economic conditions worse has almost doubled from 16% in 2009, to 29% in 2010. Only 35% of Republicans at the outset of Obama’s presidency believed that his economic policies were making things worse. That number has risen to 58% in just two years. Even Democrats are starting to sway in their opinions. In just one year’s time, there was an “eight-point increase in the percentage saying Obama’s policies have had a negative effect.” A new Rasmussen report telephone survey of 2500 Americans boasted similar results. The survey showed that 41% of Adults are at least a little confident in the economic advisors of the president, however 57% aren’t. Also, 65% of adults who don’t classify themselves under either of the dominant political parties said they were doubtful of these men. Leaving only a mere 35% who still support him. Even another poll (Public questioning econ policies) shows that despite Obama still having a high popularity rate, the public is beginning to question his policies. Obama and his administration are definitely losing support for their economic endeavors, and in my opinion, they’re losing it fast.

            There are many proposed reasons as to why Obamanomics may have failed. And most of these “theories” have (for the most part) the same points. The first common point I came across was the fact that the unemployment rate is still incredibly high. This graph was taken directly from a report published by Barak Obama himself in early 2009. He used it to convince people that his Stimulus bill would save and/or create over 3 million jobs. The red line (added by Liberty Works) shows the real unemployment rate after passage of the Stimulus bill. As is evident, the unemployment rate has risen higher than if were just not to do anything – reaching 10% at points. The second point that I found was quite common with “Anti-Obama” citizens was the notion that Obama and his administration only accounted for the short run and only “addressed the immediate cataclysm”. They solved the immediate problem, but did nothing to solve the trend line – job loss, inactivity of income, etc. All this did was waste stacks of taxpayer’s dollars and cause even more instability in the economy. Even Obama is calling for new stimulus measures. This in it-self is convincing proof that Obama and his team now realize that their earlier methods were ineffective at reviving the economy. Lastly, the theory of trickle-down bailouts is thought to be a reason why Obamanomics have failed. This video explains trickle-down bailouts and how they are, in theory, when you bail out banks or other big businesses and expect them to lend a “helping hand” to other people and credit would flow again. Sadly, Capitalism doesn’t work that way because it is not the most profitable option and that doesn’t involve lending to small businesses and people.

Then there are those who are extremely “Anti-Obama,” taking the meaning to a whole new level. In this article, Wayne Allen Root (an apparent hater of Obama and his policies) goes as far as to say that Obama is “Purposely overwhelming the U.S. economy to create systemic failure, economic crisis, and social chaos- thereby destroying capitalism and our country from within.” He theorizes that Obama is attempting to turn our country into a “socialist/Marxist state” that has a majority population whose needs government for survival are exponential. He consistently claims that almost everything Obama and his administration have done is part of a plan to “Overwhelm the system”. Although I disagree with his drastic opinion that Obama is trying to change our country into a Marxist state, his viewpoint presents a side to the argument that cannot be ignored.

Moving forwards, I’d like to mention that numbers don’t lie… And right now the numbers show that a strong dislike for Obama is rapidly springing up around the country. Many people (both Republican and Democrat) are getting tired of Obama trying to blame the circumstance in which he entered office as the reason why we are still in a recession. Not too long ago, President Obama bashed Bush, claiming that he is the reason for all of our economic problems. Now I don’t know about you, but the fact that Obama cannot step and face the mess he and his policies created is astounding to me. I guess Obama must have overlooked the fact that Bush’s marginal tax cuts in 2003 created 8 million jobs and lowered the unemployment rate to 4.6%. The reason were still in a recession is not Bush, despite what Obama claims – even the numbers say it isn’t. The reason we are still in a recession is because Obama and his administration made mistakes with their policies and wasted billions of dollars.

            Here’s an interesting fact: Did you know that President Obama will have actually spent more money on his stimulus bill than the cost of the whole Iraq war? It’s true. The cost of the stimulus bill, by 2019, will have cost our country $814 Billion dollars. This number is a shocking $100 Billion dollars more than the cost of the 6-year long War in Iraq, estimated to be around $709 Billion dollars. Obama passed his stimulus bill his first month in office and within its first two years, it has surpassed the cost of a war (half-way around the world) that has been raging on for 6 years!

Conversely, an opposite school-of-mind is from those who support Obama and his economic strategies (Pro-Obama). Primarily from the Democratic Party, these people view Obama’s economic policies as having a positive impact on the country’s economy. President Obama has been clear about what he wishes to do in battling the economic crisis. His guiding prospects include creating jobs, Keeping Americans in their homes, and bringing stability to the financial markets. His first priority, according to the page of the White House, is to get Americans working again. He signed the American Recovery and Reinvestment Act, which has been responsible for around 3 million jobs. These jobs have seemingly carved the path for a “new clean energy economy, a revitalized infrastructure and transportation system, and have helped transform health information technology.” In attempts to make his other two prospects a reality, Obama has signed many bills aimed at getting credit flowing again and helping Americans out in the housing market.

            Despite the popular consensus, some numbers point out that the economy is actually improving. Although Obama’s job rating has hit rock bottom, the markets (according to his website) have at last made a turn for the better. For example, the Standard & Poor's 500-stock index is up from its recessionary low in March 2009 by about 74%. But, that’s not the only market that has seen growth. Corporate bonds have been doing better and better as the year progressed. Commodity prices have shot upwards. International currency markets have seen a drastic improvement and even housing prices have appeared to finally level out. Because his strategies have appeared to work (in some aspects), the Chinese Premier commended Obama for his efforts to stimulate the US economy. Another notable person, Lawrence Summers, defended the policies of the Obama Administration when he stated, “We were at the brink of catastrophe at the beginning of the year but we have walked some substantial distance back from the abyss… Substantial progress has been made in rescuing the economy from the risk of economic collapse that looked all too real 6 months ago.” Summers, who was actually Obama’s chief economic advisor, claims that even though the unemployment rate climbs closer and closer towards the double digits, that it does not mean that the stimulus plan is failing simply because the unemployment rate lags other indicators of economic recovery.

            Obama and his administration have worked relentlessly to find a solution to the economic crisis we have been stuck in for almost three years now. Yet, I still feel that him and his advisors are following the wrong policies. I was astonished to find out that some of the markets have rebounded under his leadership and strategies, but the biggest problems still remain intact – the recession is still here, the unemployment rate is still growing, and public opinion is continuing to get worse and worse towards Obama and his methods. I will admit, I am less harsh towards Obama’s policies after reading everything I have read. None-the-less, until these problems are solved, or at the very least begin to get noticeably better, my thoughts regarding “Obamanomics” will remain unchanged: they simply aren’t working.