Interview: “Obama Inherited One Of The Most Serious Financial Crises”

Dr Vukenkeng Andrew Wujung, Lecturer in Economics, Head of Accounting Division, University of Bamenda, talks on the economic legacy of outgoing American President Barack Obama.


US President Barack Obama is getting set to leave power. How would you assess the impact of his economic policies in eight years?

President Obama inherited one of the most serious financial crises in American history. His numerous measures to save banks, the auto industry and the housing market made his presidency (especially the first mandate) very difficult. One of Obama’s first major acts was to sign the American Recovery and Re­investment Act.

More than 70 per cent of Americans are of the opinion that deficits have gone up under Obama. However, Obama himself feels some justifiable exasperation that the deficit has in fact declined (by roughly three-quarters) since he took office. The private sector has added jobs for 73 consecutive months – some 14.4 million new jobs in all – the longest period of sustained job growth on record. Unemployment, which peaked at 10 per cent the year Obama took office, the highest it had been since 1983, is now 5 per cent.

The budget deficit has fallen by roughly $1 trillion during his two terms. And overall US economic growth has significantly outpaced that of every other advanced nation.  economic shift during Obama’s presidency came from a piece of legislation that was not sold as such. On March 21, 2010, Congress passed the Affordable Care Act, better known as Obamacare. It was Obama’s boldest piece of legislation and the one that most likely defines him.

Many world economies are currently receiving a bashing, partly because of the slump in oil prices. Is there anything Obama could have done to prevent or mitigate the situation?

President Obama graciously thanked himself for cheap gasoline at a rally in Philadelphia for Hillary Clinton. And while cheap fuel is indeed something that millions of households and businesses are happy about, many would doubt that Obama is to thank. Meanwhile, businesses in the oil and gas sectors and the employed or unemployed in these sectors, along with those in real estate and others who have been struck by low oil prices, may be less than thankful, regardless of their politics.

According to law firm Haynes and Boone, between January 2015 and July 2016 there were 90 bankruptcies in the US oil and gas sector. Now, an estimated 350,000 people have been laid off globally. Of these, 99,000 were fired in Texas alone. These are people who, like their bosses, are highly unlikely to be in the mood to give thanks to the President, whose administration has nurtured the fracking that made the shale revolution possible. Electric vehicle makers are probably not too thankful either, nor are renewable energy industry in general.

Economically-speaking, how would you rate Barack Obama’s tenure?

In February 2009, Congress approved Obama’s $787 billion economic stimulus package.It cut taxes, extended unemployment benefits, and funded public works projects. The recession ended six months later when GDP growth turned positive. Obama won the Nobel Peace Prize in March 2010. The Nobel Committee lauded “… his extraordinary efforts to strengthen international diplomacy and cooperation between peoples.” He withdrew troops from Iraq in 2011 and reduced the US nuclear warhead stockpile by 10 per cent.

On March 23, 2010, Obamacare revolutionized healthcare. Six months later, concerns over the programme’s cost helped Republicans win control of the House of Representatives in the mid-term elections. In July 2010, the Dodd-Frank Wall Street Reform Act improved regulation of eight areas that led to the financial crisis. Obama’s other achievements include the 2010 tax cuts when Congress agreed on additional stimulus in the form of $ 858 billion tax cut. On May 1, 2011, Navy Seals attacked the Al Qaeda leader’s compound in Pakistan and eliminated Osama bin Laden. Later that year, Obama ended the Iraq War. However, renewed threats from ISIS meant renewed military presence. Obama won the second term as President on November 6, 2012.

On July 14, 2015, Obama brokered a nuclear peace agreement with Iran. In return, the United Nations would lift the economic sanctions it imposed in 2010. On October 4, 2015, Obama’s team negotiated the Trans-Pacific Partnership (TPP). It replaces NAFTA as the world’s largest free-trade agreement. It removes tariffs between the United States and 11 other countries that border the Pacific Ocean. Obama led global efforts to agree on the International Climate Agreement. It was negotiated in Paris on December 12, 2015. Countries agreed to reduce carbon emissions and increase carbon trading. Members decided to limit global warming to 2 degrees Celsius above pre-industrial temperatures.

Obama’s policies helped America recover from the Great Recession. Over eight million jobs have been created since he took office. That makes him the fifth best job-creating President in US history. He appointed Federal Reserve Vice-Chair, Janet Yellen, to replace Ben Bernanke. She maintained an expansionary monetary policy that created the lowest interest rates in 200 years. This permitted the early stages of housing recovery and slow but steady business expansion to continue.


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