Barack Obama took the oath of office in January amid a deepening recession, rising unemployment and a volatile and declining stock market. All of those challenges were present before Obama entered the White House. But more than a month into his presidency, the economy seems to have worsened.
In the interim, President Obama pushed for and eventually signed a $780 billion economic stimulus bill, offered a home mortgage rescue plan, and gave a nationally televised address to Congress in which he promised to boost federal spending on health, education and welfare programs.
Are President Obama’s policies helping or hurting economic recovery? Is George W. Bush entirely to blame for the economy? Or is it Obama’s economy now? RedBlueAmerica columnists Joel Mathis and Ben Boychuk weigh in.
The faltering U.S. economy officially became Obama’s when he signed the monstrosity of a "stimulus" bill on February 17. The legislation, which is loaded with plenty of pork of debatable "stimulative" value, is unlikely to spur economic recovery except for favored special interests, public-employee unions and government contractors. The economy will turn around eventually, but it won’t be the result of this insane spending package.
In fact, the stimulus and other Obama fiscal policies will likely have a negative effect long-term. It’s possible to track the declining confidence in U.S. markets alongside the Obama administration’s efforts to turn the economy around. The Dow Jones Industrial Average closed at 7,933 on Feb. 12, the day before Congress passed the stimulus. The Dow closed at 6,875 on Wednesday — roughly a 15-percent drop in less than three weeks. Some stimulus!
President Obama waved off the precipitous drop in the stock market as nothing more than the usual "fits and starts" and offered a bit of investment advice. "What you’re now seeing is … profit and earning ratios are starting to get to the point where buying stocks is a potentially good deal if you’ve got a long-term perspective on it," he said.
By the way, it’s "price/earnings ratios" not "profit and earning ratios." But that’s a small gaffe. Besides, presidents aren’t financial advisors.
Trouble is, the markets know that and have responded accordingly. The Obama administration’s actions over the past month only underscore this fundamental political truth: Presidents can do little to help the economy, but they can do plenty to hurt it.
Conservatives started calling Barack Obama "The Messiah" during the campaign in a futile effort to puncture the candidate’s popularity. Now it seems the GOP really does want the country to judge the president in messianic terms: If he can’t revive a dying economy in three days, he’s a fraud. Poppycock.
Nobody with a 401(k) likes to watch the stock market’s decline. But it’s clear that Republicans are playing politics with the economy. When the Dow plummeted 300 points on Monday, conservative commentators proclaimed it proof the market wasn’t happy with President Obama’s policies. Never mind that the drop came the same day insurance giant AIG reported fourth-quarter losses of $61.7 billion. That’s hardly the president’s fault, but the GOP is trying to pin it on him anyway.
The truth is that Republicans are rushing to call the president a failure because it’s too soon to know if he’ll be a success. The stimulus bill has been approved, yes, but it will take more than a few days for its effects to be felt: Workers, for example, won’t see their tax cuts until April 1. That feels glacially slow in uncertain economic times, but it’s blazingly fast for the federal government.
Barack Obama’s presidency will be judged on his handling of the economy. That’s only fair. But his presidency is only a few weeks old, and the problems he seeks to fix were years, even decades, in the making. Give him a little more time.
(Ben Boychuk and Joel Mathis blog daily at http://www.infinitemonkeysblog.com and http://politics.pwblogs.com/.)