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OPINION: President Obama’s inheritance: The US economy and joblessness

Horace Williams –

When Barack Obama was officially sworn-in as the 44th president of the USA on January 20, 2009, the country was no longer cruising along the surplus highway which Bill Clinton handed over to George Bush.

In fact, the USA was a most scary place in which to live… apart from that new progressive light at the end of the tunnel. Americans all over the world were despised and actively sought-out to be attacked and discriminated against. The USA, as a result of its president, was considered to be the ‘comedy factory’ of the world, and there was no better comedian on planet earth. The biggest problem we face, though, is the fact that we are a people with exceptionally short-memories.

We have forgotten that we were at war with Iraq and Afghanistan, and the associated costs that accompanied those wars. We have forgotten that the stock market experienced its worse crash in modern history, and that we are affected even when the rest of the world sneezes. We have forgotten that this country went through a banking failure and financial crisis, the likes of which we had never seen before, and that much of this was man-made. We have forgotten that a housing and mortgage crisis affected the economy in a manner previously thought to be impossible, and that lack of governmental controls permitted unrestricted and unmitigated greed to run rampant.

We have forgotten that there was the distinct possibility of the US auto industry and associated businesses becoming history. We have forgotten that the US economy was losing jobs at the rate of 750,000 per month before Obama became president, and that even the Chamber of Commerce encouraged the shipping of jobs overseas. We have forgotten that the US congress passed 372 bills and sent them to the Senate, which did nothing about making sure those bills received the level of serious discussion and debate they rightly deserved. We have forgotten that in the US Senate, 51 is no longer a majority, which now requires 60 or 67 votes out of 100, for most bills to be passed. Yes, we have forgotten that, now the president is Obama, the rules have changed.

We have forgotten that although we are not where we need to be, that in less than three years, this country has made exceptionally significant strides and moving in the right economic direction. We have forgotten where we were, just three short years ago!

WARS WITH IRAQ AND AFGHANISTAN

In March 2003, the USA launched the most modern full scale war known to mankind against Saddam Hussein and the country of Iraq. There are at least three ways to think about the economic costs of the wars with Iraq and Afghanistan: what has already been spent, what could or would be spent in future, and the comparative economic effects of spending money on war, instead of something else. Between 2003 and 2011, the USA has already spent over $1,311.5 billion, and this figure will obviously increase since we are still in Afghanistan.

The USA paid for past wars by raising taxes, and or selling war bonds. But George Bush had a brain-wave which he used to convince congress, that these wars could be put on the credit card. So that is exactly what they did! This borrowing raised the US budget deficit, increased the national debt, and had other macroeconomic effects such as raising interest rates. Then there was the little mater of paying interest on the borrowed funds… that cost so far, has been in excess of $185.4 billion.

Each and every day, more veterans continue to apply for and receive their benefits. This amount is estimated to peak in 30 to 40 years, and will reach a staggering $600 billion to $1 trillion!

The USA grossly underestimated the duration of these wars. They neglected to tally all the costs, and overestimated the anticipated political objectives by the use of brute force. For both wars, the amount already spent, or obligated to date, has already reached the staggering and mind-numbing amount of $3.2 to $4 trillion!

THE STOCK MARKET SLUMP

Most of us seem to have forgotten that when Barack Obama became president of the USA, the stock market (Dow Jones) stood at a low of 7,949 — way down from the record high of 14,164 on October 9th, 2007. The trend’s momentum continued until March 9, 2009, when it hit absolute bottom at 6,507.

By December 31, 2011 the stock market had rebounded remarkably to 12,217 — almost two times the 2009 low mentioned above. ….And they say that President Obama has done nothing for the country! Had the stock market continued in free-fall, and was now 3,000 instead, guess who would be receiving the blame?

THE BANKING AND FINANCIAL CRISIS

A bank failure is the closing of a bank by a federal or state banking regulatory agency. The FDIC is named as Receiver for a bank’s assets when its capital levels are too low, or it cannot meet obligations the next day. Between 2003 and 2008, the USA recorded 11 bank failures. In 2008, 25 banks failed, in 2009, the figure rose to 140, and they were all taken over by the Federal Deposit Insurance Corporation (FDIC). Obviously, when such a high proportion of banks fail, then that would severely affect mortgage lending and housing as a result.

The banks, which were bailed out by the government (us — the taxpayers), have already repaid their indebtedness, and done so with interest as well. Wasn’t it worth it to bail them out? The problem however, is that they have forgotten who bailed them out (US taxpayers) in their time of need.

THE HOUSING AND MORTGAGE CRISIS

During 2007 (Bush was still president), lenders had begun foreclosure proceedings on 1.3 million properties, a 79% increase over 2006. This number increased to 2.3 million in 2008, an 81% increase over 2007, and again to 2.8 million in 2009, a 21% increase vs. 2008.

By August 2008, 9.2% of all US mortgages outstanding were either delinquent or in foreclosure. By September 2009, the figure had increased to 14.4%. Between August 2007 and October 2008, 936,439 of USA residences completed foreclosure. Ten states accounted for 74% of the foreclosure filings during 2008. The top two, California and Florida, represented 41%, and nine states were above the national foreclosure rate average.

Mitt Romney was opposed to the government doing anything to aid these homeowners. He felt that the foreclosure process should proceed normally, and that the market should self-regulate, without governmental intervention. Left to Romney and the republicans, more American homeowners in financial distress would have been up a creek with absolutely no paddle.

THE US AUTO INDUSTRY CRISIS

During the third quarter of 2008 Bush was still president of the USA and, combined, General Motors and Ford burned through a staggering $14.6 billion in losses, raising the distinct possibility that Washington may have to step in to finance an historic downsizing of the US auto industry. Mitt Romney’s position was, “NO WAY, let the car manufacturers fail. The government should not be in the business of bailing-out the car manufacturers.”

President Obama miraculously appeared with his economic brain trust and announced that he had asked his team to work on ways to help the auto industry survive the financial crisis. He pointed out that “the auto industry is the backbone of American manufacturing and a critical part of our attempt to reduce our dependence on foreign oil.”

MASSIVE AND HISTORIC JOB LOSSES BEGAN UNDER GEORGE BUSH

Mitt Romney and the Republicans continue to admit that President Obama inherited an economic mess, but made matters “worse.” When that statement was fact-checked, and proven false, Romney and the Republicans still continued to repeat the lie.

The year before President Obama took office, the USA was hemorrhaging jobs. Every month, thousands of jobs were lost, and most of them were shipped overseas even with the assistance of the US Chamber of Commerce. The month Obama was inaugurated, America’s private sector lost a remarkable 841,000 jobs — and that was just in one month!

If indeed, Obama’s policies made matters worse, then we would expect to see even further increasing job losses. If Obama’s policies made things better, we should expect to see the monthly totals improve. That is exactly what has transpired every month since then. The economy has grown, the recession has (technically) ended, and the job market has strengthened, (not enough, but) significantly.

Job losses and job creation are the biggest obstacles the administration face, but since February 2010, nearly 2.8 million private sector jobs have been created. Obviously, the problem has not yet been solved, but at least we are headed in the right direction.

THE IMMIGRATION ISSUE

It should be clear to those of us who have eyes, that there is a distinct difference between both mainstream political parties. The Republican Party, in state after state, tries their best to victimize anyone who looks “un-American,” — whatever that means. After all these years, and through intermarriages — through a mixture of the ethnicities, what does an “American” look like? To me, there is a marked difference between both political parties, and the manner in which they look at, and think of, the residents of this great country. Things became so heinous that even the president of the USA was asked to produce his birth certificate… and he did.

To add insult to injury, the Republicans are attempting to shrink the pool of electors eligible to vote in the upcoming presidential elections. Isn’t this the bastion of democracy? So why would anyone want to reduce, place a limit on, or restrict those legally entitled to vote? Could it be that the answer lies in who the next president of the United States is likely be?

When I think of all these issues, I do not understand it when someone tells me that they cannot differentiate between the political parties. When someone tells me that they are a Republican, I must accept it. However, I shake my head and wonder, what went wrong when their brain was being wired.

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