Obama's Economic Policies Have Been Successful

Economy (General Conditions) Sever mortgage crisis lead many people lose their houses and very weak job growth. The devastated situations prompted the Economists to claim that this time recession was the worst ever since 1933. [1] First, the meltdown did happened because banks were over-leveraged and exposed themselves to too much risk without adequate capital to cover the risk bets. When the things go wrong, it will go horribly wrong. Perhaps JPMorgan $2B Trade loss would ring some bell again. [2] Second, the meltdown did not become a full-scale depression because President Obama decided to save the financial system from collapse. That is the main reason why this time recession lasts only about 18 months. President Obama had done an extraordinary jobs in dealing with financial collapse and he had laid the solid foundation for the future growth. [2] Auto-Industry Bailout Unlike what my opponent had claimed, there was no other way to save GM and Chrysler during that time. If these two companies had gone bankrupt, either one of two fates are waiting for them: Liquidation or reorganization. Chapter 11 allows both car makers to reorganize, but the precondition is that both car makers must have sufficient capitals for reorganization. The credit market was completely frozen. Government attempted to obtain capital from private market but none of banks (including Bain Capitals) were willing to lend. Eventually, government decided to get involved directly in order to save the car industry. [3] According to most economic studies, the stimulus, along with the rescue and restructuring of the auto industry, succeeded in keeping unemployment 1.5 to 2 percent lower than it would have been without it. Millions jobs were saved, and that is what matters. [2] The Patient Protection and Affordable Care Act (aka. ObamaCare) Congress enacted the Affordable Care Act to address a profound and enduring crisis in the market for health care that accounts for more than 17% of the Nation"s gross domestic product. Congress has both financial and moral interests to address this daring issue. CBO and JCT now has estimated that, on balance, and direct spending and revenue effects of enacting the Affordable Care Act would yield a net reduction in federal deficits of $118 billion over the 2010-2019 period. [4] Wall Street Reform and Consumer Protection Act (aka. Dodd-Frank Act) After a worldwide financial meltdown - and a $700 billion taxpayer funded bailout, the Wall Street Reform and Consumer Protection Act of 2010 was proposed and passed to address the enduring issue. Con had suggested that Dodd-Frank act deepened the economic slowdown. What he had overlooked is the fact that the most feared job-killing uncertainty was in fact the uncertainty inherent in a non-transparent and reckless financial system that made Dodd-Frank necessary in the first place. [5] The importance of Dodd-Frank Act cannot be overestimated. JPMorgan $2B Trade loss in May emphatically suggests that we need Dodd-Frank Act fully implemented (only about 10% being in place so far). Goldman Sachs CEO Lloyd Blankfein, in an interview with Marketpplace, believed that the Wall reforms are required by saying that "A lot of the reforms containing in Dodd-Frank look good to me", he underlined the strengthen of the reforms where also pointed that some provisions may not go far enough. [6] Dodd-Frank Act will lower risk, promote transparency of bank transcriptions and protect the American public. It would stabilize the economy. Therefore, there is no sufficient reason to believe that Dodd-Frank Act would impede the recovery. Jobs As we all have known, the unemployment decreased to 7.8%, a 44-months low. Before we get down to the bottom to investigate why this time recovery is so much "worse" than President Reagan's one, I invite everyone to consider the following hypothetical case: Assuming that the surgery failure rate of a world-class surgeon is considerably higher than his colleagues, how would you respond to the accusation that: This surgeon is incompetent ? President Reagan faced a vastly different situation during his presidency. By 1983, with the majority of President Reagan"s tax cuts in place, the American ran into a a permanent deficit spending, and ongoing spending was reinforced by the growing reliance of consumers on credit purchases. [2] One of the main reasons that the strategy work is because the national deficit during that time is incredible low. In the 1980s, the deregulation of Wall Street further reinforced the growth bubbles. President Reagan"s economic policy helped concentrate income gains among already wealthy Americans whereas the ordinal folks did not benefit much or not at all. More of new jobs were coming in the service sector, where wages and benefits in general are lower than in manufacturing. President Bush followed President Reagan footsteps and eventually got us into this mess.[2] He cut taxes and increased spending at roughly twice the rate it had increased during President Clinton eight years in office, creating almost to none new jobs but ending four years of balanced budgets and surpluses and doubling the national debt even before the financial meltdown. After eight years in which the Republicans had increased spending at a rapid rate, it is rather absurd to hear that government should reverse their courses. [2] With deficit hit $10.4 trillion in 2008, President Obama cannot pursue the same strategy. Besides President Obama hoped to grow mid to high paid jobs and believed that everyone including those millionaires and billionaires should pay their equal shares. Moreover, one thing pro did not mention is the fact that the single most important thing on Republicans" agenda is not the creations of jobs, but for President Obama to be a one term President. It is hard to see how anyone else can do any better when the friends on the other side had decided to not corporate even at the cost of american people.[2] Labor force participation Rate The decreasing in labor force participation rate can be explained by the following reasons. First, baby boomer retired. With baby boomers are approach to their retirement age, it is not entirely surprised that the labor force participation rate is declining. Second, students stay in school longer. Many people who are looking for jobs decide to go back to school. That would further decrease the participation rate. Third, the labor force participation rate was on decline since 1994, started during President Clinton"s first term. Therefore, the decline in participation rate is not something new. Besides, according to Moody"s analysis, more than 12 million new jobs will be created over the next four years. Gas Price According to the conventional economic theory, there are two factors controlling the price: supply and demand. The OPEC essentially controls the oil production. In the summer of 2008, the gas prices hit $4 per gallon and on the eve of the inauguration, the price dropped to $1.8 per gallon. The dramatic drop was resulted by a sharp decreased in domestic demands. Because of the financial meltdown, people drove less and manufactures lowered their demands. In other word, the price in 2008 is abnormal and has little value in comparing to the current price. The relatively high gas price today is largely due to the Arab Spring and Iran sanctions. [7] [1]. www.economist.com/node/21561909 [2]. Back to Work: Why We Need Smart Government for a Strong Economy, Bill Clinton (2010) [3]. http://www.washingtonpost.com...... [4]. http://www.cbo.gov...... [5]. http://www.cnbc.com...... [6]. http://www.huffingtonpost.com...... [7]. http://mediamatters.org......