Obama's Economy

Obama's Economy: Recovery for the Few

Jack Rasmus
Copyright Date: 2012
Published by: Pluto Press
Pages: 216
Stable URL: http://www.jstor.org/stable/j.ctt183pbrq
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  • Book Info
    Obama's Economy
    Book Description:

    Three years after his election, Barack Obama presides over a deep economic malaise. Radical economist Jack Rasmus shows how the Obama administration has failed to deliver economic recovery and social justice and puts forward alternative proposals which could realise these goals. Whilst corporate profits are up, economic hardship is the bitter reality for millions of US citizens. Rasmus argues that the weakest economic recovery since 1947 is the direct result of the Obama administration's failure to take decisive action. From Obama's presidential election to the passage of his 2012 budget, this book explains how the US economy got where it is today and why the risk of a 'double dip' recession is rising. In a crucial election year, Obama's Economy will be vital reading for students of US politics and economics, and all those looking for a way out of the current crisis of capitalism.

    eISBN: 978-1-84964-694-9
    Subjects: Political Science
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Table of Contents

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  1. Front Matter (pp. [i]-[iv])
  2. Table of Contents (pp. [v]-[vi])
  3. Introduction: A Systemic Crisis of Recovery ‘The Wasted $12 Trillion’ (pp. 1-5)

    The defining feature of the U.S. economy over the past three years since Obama took office has been its failure to achieve a sustained recovery. After three economic stimulus programs costing $3 trillion over the past three years, 2009–11, and after more than $9 trillion in bank rescues by the Federal Reserve, the faltering U.S. economic recovery of the past three years is headed toward an eventual double-dip recession by 2013.¹

    The U.S. economy entered recession in December 2007. The decline accelerated in September–October 2008 with the onset of the banking crash. The collapse set in motion by the events...

  4. 1 The Weakest, Most Lopsided Recovery ‘Who Recovered, Who Didn’t, and Why’ (pp. 6-21)

    With less than a year remaining before the November 2012 elections, the policies that have come to define Obama’s economy have been largely implemented. The results and consequences are mostly known or predictable. Significant further economic stimulus in 2012 beyond that introduced in late 2011 is highly improbable or likely to prove token and ineffective. It is appropriate at this juncture therefore to assess the performance of Obama’s economy over the past three years; to understand why its policies and programs have failed to generate a sustained economic recovery; and to explain why the uneven recovery has benefited only the...

  5. 2 From Tax Cuts to Tactical Populism: ‘Obama’s 2008 Campaign Promises’ (pp. 22-34)

    The recent recession began in December 2007.¹ But critical sections of the economy had begun deteriorating well before.

    Residential housing had already peaked in 2006 and was well on its way in decline by 2007. The financial sector was also in trouble well before December. In early 2007 several large mortgage companies failed—a clear warning of the crisis to come. By early summer the mortgage companies were followed by several large hedge funds—a kind of unregulated investment company for wealthy investors that speculated in risky financial securities. Then the bottom fell out of the housing markets in August...

  6. 3 Obama’s Jobless-Homeless Stimulus ‘The First Economic Recovery Program (2009)’ (pp. 35-57)

    On November 7, in his first press conference following the November election, president-elect Obama declared “my priority is going to be how do we grow the economy. How do we create more jobs.”¹ But no specific proposals for creating jobs were offered. With regard to foreclosures, he noted his new Treasury Secretary would address the issue, “but stopped short of calling for any new initiatives.”² And nothing as yet was offered about assisting state and local governments facing fiscal implosion.

    October 2008 employment statistics were released that same day, Friday, November 7, as Obama held his press conference. The Department...

  7. 4 A Record Short, Faltering Recovery ‘The First Economic Relapse of 2010’ (pp. 58-79)

    With most of Obama’s $787 stimulus scheduled to take effect in 2010 instead of 2009, with the bank bailouts failing to produce the anticipated lending, and business in general intent on hoarding profits instead of investing, it wasn’t surprising that the economy for the first six months after June 2009 did not immediately recover as strongly as the administration predicted.

    Even when measured in terms of GDP, an imperfect measure at best of the overall condition of the economy, the second half of 2009 was not all that great. After collapsing for four straight quarters from July 2008 through June...

  8. 5 How More is Less of the Same ‘The Second Economic Recovery Program (2010)’ (pp. 80-95)

    Despite the trillions of dollars spent by Congress and the Federal Reserve on bailouts since 2008, by the summer of 2010 the economy had not turned the corner and was in fact getting worse. Jobs were barely growing, foreclosures and bank seizures of homes were rising while home prices were falling once again, and subsidies to the states and local government were running out. Consumers were in retreat—hammered by escalating commodity and oil prices over the spring—and business investment was slowing while large corporations were accumulating a $2 trillion cash hoard and banks were refusing to lend to...

  9. 6 Historical Parallels and the 2010 Midterm Elections ‘Obama as Franklin Roosevelt or Jimmy Carter?’ (pp. 96-106)

    History will show that the missed strategic opportunity for Obama was the summer of 2010. As shown in Chapter 4, it was at that time that the economy underwent its first economic relapse. That relapse was the clear signal to Obama and his administration that a juncture had been reached; that the policies associated with his 2009 first economic recovery program were beginning to fail.

    It was clear by late summer that the $787 (later $862) billion stimulus was not sufficient in magnitude, composition or timing to generate a sustained economic recovery. By the summer of 2010 more fiscal stimulus...

  10. 7 Deficit Cutting on the Road to Double Dip ‘Economic Recovery Policy in Reverse’ (pp. 107-127)

    On February 18, 2010 Obama issued Executive Order 13531 establishing a National Commission on Fiscal Responsibility and Reform (hereafter called the Deficit Commission).² The Commission was composed of 18 members: six appointed by the president, six by the House and six by the Senate. Eight were Republicans and the majority of the eight from the extreme-right Tea Party-leaning wing of the House and like-minded Senators. On the Democratic side, at least five were conservative-leaning Democrats— like Baucus and Conrad in the Senate, Spratt in the House, as well as Erskine Bowles, a former chief of staff for Bill Clinton and...

  11. 8 Sliding Toward Global Depression? ‘The Second Economic Relapse of 2011’ (pp. 128-149)

    Obama’s second economic recovery program introduced in late 2010 was far more weighted toward tax cuts than the first recovery program—in fact, more than $800 billion in tax cuts compared to about $300 billion in the first program. Not surprisingly, it’s impact on recovery was even less. There were no subsidies to states and local government and no additional infrastructure spending to speak of included in the second recovery program. It was essentially all tax cuts with some unemployment subsidy extensions. The tax cuts were largely business tax cuts, the largest being the $408 billion cost of the two-year...

  12. 9 Failed Recovery to Austerity Recession ‘The Third Economic Recovery Program (2011)’ (pp. 150-169)

    A week after the signing of the debt-ceiling deal of August 2 to cut $1 trillion in spending from the budget, Obama hastily called a meeting of CEOs to the White House. The purpose of the meeting was to solicit business’s proposals for economic policies. A list was offered by the CEOs to the administration, including proposals for more business deregulation, more tax cuts, and fast-tracking free trade.

    Immediately following the meeting Obama embarked on a three-day bus tour of the Midwest. At various stops he spoke about his forthcoming new economic plan to create jobs, to be announced around...

  13. 10 An Alternative Program for Economic Recovery ‘Fundamentals of Economic Restructuring for the Twenty-First Century’ (pp. 170-188)

    Any successfully economic recovery program in the future must not repeat the strategic errors of the Obama administration. A successful recovery program must satisfy a First Principle of a Balanced Immediate– Intermediate– Longer-Run program. While the primary emphasis must be on immediate solutions that work, it must also emphasize equally important—and adequately funded—intermediate and longer-term measures. Obama’s first program was based on the recovery getting underway quickly after one year and relied on the market—i.e. the business sector—to do the heavy lifting after that year. That failed. The Obama program also relied on subsidizing a floor...

  14. Notes (pp. 189-200)
  15. Index (pp. 201-210)


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