WASHINGTON, March 31, 2015 – Barack Obama was sworn into office as president in January 2009 while the economy was in midst of a severe recession. He said he would deliver policies that would get the economy moving again. Six years later, what grade does his performance deserve?
President Obama recently said that his policies are a success. Last year the economy added almost 3 million jobs, its best performance since 1998. Economic growth in the second and third quarters of 2014 was almost 5 percent. And there are far fewer Americans without health insurance.
Social programs have expanded; almost 48 million Americans are assured of eating since they can get food stamps, and the number of people helped by welfare is at an all-time high. Interest rates remain low, and regulations have been implemented to protect the public.
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Obama would say he has done well and deserves a B+ or A-.
An observer from outside his administration might give him a different grade.
In 2010 Obama submitted a plan, later approved by Congress, that called for almost $1 trillion in stimulus spending financed entirely by borrowing. He said that passing this stimulus would provide “shovel-ready” jobs and that the economy would grow at a 4 percent rate in 2010 and average almost 6 percent annual growth in 2011, 2012, 2013 and 2014.
He was later forced to admit that the jobs were “not as shovel-ready as we thought.”
The economy grew at less than a 2.5 percent annual rate in each year from 2010 to 2014. While growth in the second and third quarters of 2014 approached 5 percent, the negative growth in the first quarter and the 2.2 percent growth in the fourth quarter meant growth for the entire year was only 2.4 percent.
Although the economy added almost 3 million jobs in 2014, from the end of the recession in mid-2009 to 2013, job growth was sluggish and sporadic, with many of the newly created jobs being part-time or low wage. Contrast that to the 8 million jobs created in 1982 and 1983 after the deeper 1981 recession. Also from 2002 to 2008, there was essentially a labor shortage. For most of that time the unemployment rate was under 5 percent and for a month or two, under 4 percent; there were very few unemployed people seeking work. As a result there appeared to be sluggish job growth.
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Obama insists that Obamacare is a success. Because of the confusion in the numbers provided by the Obama Administration, it is difficult to tell exactly how many previously uninsured people actually have insurance today. An accurate number is probably around 9 to 10 million.
While that is good, hundreds of millions of Americans who were generally content with their health insurance plans prior to Obamacare now have poorer plans, are seeing unfamiliar doctors and are paying more for the plan instead of paying less as the president promised. In addition, because of high deductibles with the Obamacare-approved plans, many people are skipping routine doctor visits and some ordered tests. This will eventually result in poorer quality health for the majority of Americans.
It is true that Obama has expanded social programs to provide a greater safety net. That may seem like a good idea, but many of the people who take advantage of these programs do so for long periods of time, often trapping generations in the welfare system.
A better accomplishment would have been to achieve faster economic growth so that all Americans could find opportunity. Then they would become self-sufficient and not need the safety net programs.
The low interest rates are a result of the massive expansion in the money supply instituted by the Federal Reserve. In theory, that alone should turn the economy around, so the equally massive Obama stimulus program was probably not needed.
On the issue of added regulations, they too may have done more harm than good. Many of the president’s regulations are having a negative impact on economic expansion. The regulations may appeal to a small portion of the population who seem to constantly feel they are victims, but for the majority of Americans they have simply slowed growth and limited opportunities.
Taking all of this into account, the president probably earned a D for his economic performance. Had he taken absolutely no economic and regulatory policy actions, the economy would probably be better today than it is.
Maybe, then, the grade of D is a bit too generous.