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What is President Obama’s economic legacy? Did his efforts to turn the country around after the 2008 financial crisis constitute a robust recovery, or too little, too late? Economics correspondent Paul Solman assembled a panel of economic experts to discuss employment across racial groups, the types of jobs created and the obstacles the president faced in enacting his economic agenda.
We're going to dig a little deeper now into the economic legacy of President Obama.
He came into office at a desperate moment, amid a financial crisis and the great recession. He's gotten some of the credit for a long and sustained recovery. But there are just as many questions about whether he took the right steps and helped the right people. For many people, wages are only now starting to climb.
Economics correspondent Paul Solman has the story, part of his weekly series on Thursdays, Making Sense.
PRESIDENT BARACK OBAMA:
And it is good to be back in Chicago.
(CHEERING AND APPLAUSE)
President Obama in 2010 at Ford's Chicago assembly plant.
The year before I took office, this industry lost hundreds of thousands of jobs. Sales plunged 40 percent — 40 percent. Two of the big three automakers, GM and Chrysler, were on the brink of liquidation.
And I'm convinced — I'm convinced we're going to rebuild not only the auto industry, but the economy better and stronger than before. And at its heart is going to be three powerful words: Made in America. Made in America.
And, indeed, say local union officials, nine years after the crash of '08:
CHRIS PENA, President, UAW Local 551: We have more people working in our facility than we ever have now. And we have also been working 24/7 on three production shifts.
SCOTT HOULDIESON, Vice President, UAW Local 551: There wouldn't be an auto industry that looks like what we have today had it not been for the bailout.
Ever since Obama then, the U.S. auto industry has been going gangbusters, the stock market too.
ANDY WILLIAMS JR., Foreclosure Paralegal:
You will see a lot of houses will be boarded up.
But when it comes to victims of the housing collapse, says foreclosure activist Andy Williams Jr.:
ANDY WILLIAMS JR.:
Look at our conditions in our neighborhood. It's still terrible. It still needs to be revitalized.
So what is the economic legacy of Barack Obama? Robust recovery, or too little, too late?
In the shadow of Chicago's Trump Tower, at the annual convening of the economics profession, we assembled a panel to assess the record.
Cecilia Rouse served on the president's Council of Economic Advisers from 2009 to 2011.
CECILIA ROUSE, Dean, Princeton School of Public & International Affairs: I think that what President Obama did was, he rescued an economy that was in freefall. And I think that he saved us from a great depression. Obviously, we would love for economic growth to have been more robust in the years since. But I think it has been a success.
Alan Krueger also served on the Council.
ALAN KRUEGER, Former Chairman, Council of Economic Advisers: We have had 75 straight months of job growth. Over 15 million jobs have been added; 22 million more people have health insurance coverage than they did before.
That's in spite of the fact that many of the tools that President Obama requested to help strengthen the recovery, like investing more in infrastructure or raising the minimum wage, Congress refused to act on.
But from the left, Darrick Hamilton, president of the mostly African-American National Economic Association, begged to differ.
DARRICK HAMILTON, The New School:
I would say it was a missed opportunity. He certainly faced a catastrophe when he came into office, but nothing fundamentally changed the trajectory towards inequality.
If we characterize an economy as being in a catastrophe at unemployment rates greater than 8 percent, the black unemployment rate is still above 8 percent. So, frankly, black Americans are still in a great depression, or great recession at the very least.
Glenn Hubbard, who ran President George W. Bush's economic council, differed from the right.
GLENN HUBBARD, Dean, Columbia Business School:
I think there were two very big missed opportunities. The first was a failure by the Obama administration to focus on economic growth. But there's a second missed opportunity that's really bipartisan, and I think Republicans share blame in as well, which is the failure to support work.
We need to support work by low-skilled people. And that's not a free lunch. That is a dramatic expansion in the Earned Income Tax Credit, particularly for childless workers, who would typically be younger men and women entering the labor force.
Let's take these alleged missed opportunities in turn, starting with continuing inequality, especially for African-Americans.
In fact, President Obama has put in more policies to try to pull that back, through increased improvements in the EITC, through the Affordable Care Act.
That's the Earned Income Tax Credit.
The tax credit, so that we actually saw more progress on reducing inequality than had been made in — since I think the Johnson administration.
Last year, we saw the strongest median income growth since the Bureau of Labor Statistics has been collecting data. We saw the biggest drop in poverty since they started collecting, since the 1960s.
Yes, the African-American unemployment rate is unacceptably high. It came down from a high of 16.8 percent. It's down to 7.9 percent. Do we need to do more? Absolutely. But there has been progress, and I think it's important to recognize that.
No? That's not true?
Well, we consider the types of jobs and the fact that it is still 7.9 percent. And then if we invoke the paramount indicator of economic security, wealth, then we know there's virtually no progress that's been made under the Barack Obama administration.
So I'm looking at the numbers here. Since 2007, November of 2007, jobs added by race or ethnicity, Hispanic, five million, almost, black, two-point-something million, Asians, same, white down by a million jobs, just about.
So, wouldn't you, if you were a rural white American, think this administration simply didn't do anything for me?
That's a delusion. The notion that white Americans are suffering, well, they're facing greater competition than they have perhaps in the past. It still doesn't fundamentally change the structure of where we are.
But hasn't white America under the Obama administration been left behind, or certainly feel that it's been left behind?
Look, we lost over eight million jobs in 2008 and 2009. That was a very big hole to dig our way out of.
The trend would've been much worse if we'd not — had not started on the recovery. In fact, the president proposed in the American Jobs Act additional infrastructure spending, support for state and local governments, which Congress only enacted a small part of.
Still, said the critics from the left and right:
A long-term infrastructure program would have made a great deal of sense, and frankly still does today. But that's not what the Obama administration proposed. I think we need to have a more holistic structural agenda for lower-income Americans, rather than just treating it as a problem of recession and recovery.
The advice would be to focus on skill development and on support for work.
And Glenn — Glenn actually proposed Something. He said, had the original jobs bill around infrastructure had been targeted to be more permanent, that that could've fundamentally changed the structure of the economy.
I want to just jump in on the skills development, because there was increases in the Pell Grant to make them more available to more students. There were investments in student loans.
And record high school graduation.
And record high school graduation rates last year.
So, the administration was focused on skills development. I think we would have liked to have done more, but, again, we were working with a Congress that wasn't so cooperative.
Isn't that fair?
I think the Obama administration did make several efforts in skill development. I just don't think there was enough of a structural focus.
We just had a presidential election that shook the country, because I think the view that many economic elites had on both sides of the aisle wasn't that connected with the skills and employment prospects of many Americans.
So, I think, while the administration made some progress, it clearly wasn't enough.
Don't forget, it wasn't the president who was on the ballot. And the Democratic candidate did receive three million more votes. So, I think it's difficult to interpret the election as a reflection of the president's economic agenda and his economic results.
I disagree with that. The Republicans control the Congress and the White House. And I don't think history will be that kind to the latter part of the administration's legacy.
I mean, I would agree with Glenn. I can't believe I keep saying that.
I would agree with Glenn, in that Obama's economic legacy was on the table in this election. Trump put it on the table, front and center, along with a lot of other things. And I think Obama actually campaigned to defend his economic legacy.
We needed bolder, stronger, more fundamental, not tinkering, ideas to really structurally change the U.S. economy.
Absolutely, the bolder the better. But, you know, the president is not king, and he can't just wave a magic wand and do all that he wants to do.
Like help many of the people who lost their homes in the financial crisis.
I think it was backwards. I think the money should have been given to the people to revitalize the community, and not help the ones who were part of the problem and not the solution.
Again, both the left and right had a similar prescription.
A mass refinancing of home mortgages.
As opposed to thinking about banks.
So, I put the final question to one of the president's former chief economic advisers.
Which is, wasn't it unfair that the banking system got rescued…
… auto sector got rescued, and a lot of the rest of the U.S. economy was left to fend for its own?
Absolutely. It was fundamentally unfair. It was necessary, however, because the consequences would've been much worse for the U.S. economy if the financial sector was allowed to implode. But, certainly, there's much more to be done.
And it will be up to a new administration to do it.
Reporting from Chicago, this is economics correspondent Paul Solman.
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