By Fionn Adamian
When Barack Obama took office, he inherited a crippling recession. Economic recovery—or a lack thereof—would define public opinion of the president throughout his tenure. Fast forward six years and people’s outlooks differ significantly on his success: some bash the recovery for being tepid while others point to accelerating growth. Despite Obama’s poor ratings, history will judge him positively for how he handled the recession.
Around a year after Obama took office, unemployment hovered at around 10 percent. Last month, unemployment fell to about 5.6 percent. Wage growth is finally picking up, increasing to 2.2 percent per year. As unemployment continues to fall, creating higher demand for scarce labor, that rate will likely accelerate. Finally, the labor force participation rate eked up to 62.9 percent in January, demonstrating people’s rising confidence in their abilities to find jobs.
Critics argue that while these indicators are positive, they’re too little, too late. Periods of growth in the wake of recessions post World War II have been more robust than this one. It would be irresponsible, they say, to credit Obama with a recovery when others have been stronger. But this argument misses the fact that the Great Recession was the worst economic tailspin since the Great Depression. Comparing the Great Recession to minor dips in prosperity in the mid to late twentieth century is a false parallel.
Admittedly, Obama cannot be solely lauded for recent economic growth. The Federal Reserve is the most influential government entity acting in the economy, given the intense polarization in Congress. Obama also missed the opportunity to bail out homeowners immediately after the crash. But, in retrospect, his stimulus package was a powerful antidote to curtail skyrocketing unemployment.
In times of recession, government spending is useful to fill the gap in demand. This keeps people employed, which prevents further cuts in consumption spending. And in 2009, Obama rolled out the American Recovery and Reinvestment Act, which included $831 billion in direct spending on infrastructure, education, health, energy, and the expansion of unemployment benefits. According to a survey conducted by the Chicago Booth School of Business, 82 percent of economists believe that the stimulus positively affected the unemployment rate, whereas only two percent disagreed.
When you compare the United State’s situation to many countries in Europe, the picture seems more positive. Countries that have practiced austerity after the crash have had markedly worse outcomes than the US. Greece and Spain post 25.9 and 23.7 percent unemployment rates. Had Obama not implemented a significant stimulus package (even though it could and should have been bigger), the economy would almost certainly be worse off today. Obama isn’t perfect, but he deserves more credit than he’s been getting.