President Barack Obama is the 44th President of the United States. He will leave office on January 20, 2017. As the last few months of his administration loom, many pundits and commentators have begun to analyze the Obama legacy, especially in economic terms. I will give a historical overview of both points of view.
Critics of President Obama have a strong case. When President Obama was inaugurated for his first term in 2009, the US and world was in the depths of the Great Recession. Unemployment peaked at 10 percent in October 2009. From 2008 to 2010, 8.7 million jobs were lost, and GDP decreased by 5.1 percent. The Obama presidency can be seen as a long journey toward economic recovery. Eight years later, the unemployment rate is 4.9 percent as of July 2016. But the labor force participation rate has fallen to 62.7 percent, a 40-year low. That means more Americans than before are no longer working or trying to find employment. In addition, though corporate profits and stock market performance have risen, real wages have remained stagnant. Marginal tax rates on the wealthy have risen under the Obama administration due to expiration of parts of the Bush tax cuts and new taxes from the Affordable Care Act, or Obamacare, which has negatively affected many consumers. Finally, student loan debt has exploded, and the national debt has skyrocketed, increasing over 115 percent to more than $19.3 trillion.
Supporters of President Obama also have a strong case. When Obama was inaugurated, the country and much of the world was on the brink of a depression. He signed numerous legislation in the early years including the 2009 American Recovery and Reinvestment Act, a $787 billion stimulus package, and the 2010 Tax Relief Act, a tax cut for the middle class. Obamacare has also had results. The percentage of uninsured adults dropped from 18 percent in the third quarter of 2013 to 11 percent in the first quarter of 2016. On financial reform, Obama signed the Dodd-Frank bill in 2010, which aims to end corporate bailouts, abusive financial services practices, and improve the transparency and accountability of the finance industry. Manufacturing jobs have grown at the highest rate since the 1990s, US automobile sales hit a record in 2015, and the production of clean energy like solar, wind, and biomass has doubled since 2009. Obama rejected the Keystone Pipeline and restricted Arctic drilling to protect the environment. Finally, thanks to the Federal Reserve's zero interest rate policy and quantitative easing, stocks entered a bull market after 2009. The S&P 500 (NYSE: SPY) and Dow Jones Industrial Average (NYSE: DIA) attained record highs in July 2016. And of course, GDP has been steadily and modestly growing since 2009, reaching $18 trillion in 2015.
But the legacy of President Obama shines a light onto two Americas. For the wealthy elite, financial sector, and big business, the Obama years have been good. For the long-term unemployed and underemployed, students saddled with debt, and blue-collar workers, the past 8 years have been painful. The November presidential election will be either an approval or repudiation of the Obama legacy. Hillary Clinton wants to continue in his footsteps; Donald Trump wishes to go back.