Obama Inherited the Great Recession


The way many Republicans and right-wingers talk about the American economy, one might think the Great Recession of 2008 was somehow single-handedly caused by President Obama, but in case we have forgotten, the crash occurred under the watch of President George W. Bush, and when he vacated the White House in Jan. 2009, he left behind several major economic problems.

OBAMA NOT TO BLAME: While Gov. Romney repeatedly said during the Republican debates, he did not blame Obama for the Great Recession, he dishonesty suggested Obama’s policies were somehow responsible for making it deeper, and causing it to go on longer than it should have.

WHAT WOULD ROMNEY HAVE DONE? But what would Romney have done if he had been President in Jan. 2009? What if he had inherited the Great Recession?

HOUSING CRISIS: The housing market had collapsed, as the value of millions upon millions of homes, all across the country, had dropped to roughly half their previous values. Many suddenly realized they owed far more on their mortgages than their homes were worth. Their residences were considered “underwater.” As the Fed used Monetary Policy to keep lending interest rates low, Obama instituted a homeowners program to allow refinancing at lower rates. If Romney would have been President, he would have taken no action to get private homeowners out from their underwater status. It is just wrong to suggest millions of homes could have recovered from their depressed values in just 4 years.

BANKING MELTDOWN: Banks and some insurance companies were collapsing as the Bush Administration, followed by Obama, did everything they could to shore them up with government bailout loans. While it is now easy to say we should have just let them go bankrupt, the ripple effect of a free market free-fall would have been catastrophic. A hands-off policy would have triggered another Great Depression, with major economic failures in all economic sectors, bringing record levels of unemployment.

AUTO BANKRUPTCY: The recession caused General Motors and Chrysler to lose so many sales, they faced bankruptcy, and no private bank was able to lend them any money. The only option was a federal bailout loan, but Romney repeatedly opposed any financial help whatsoever for the beleaguered auto industry. If he had been President, these major industrial employers would have gone bankrupt, and the ripple effect would have killed thousands upon thousands of additional jobs at component part factories throughout the industrial Midwest. Once again, inaction would have turned the Great Recession into another Great Depression.

WALL STREET CRASH: Obama inherited a stock market that had crashed, and a Wall Street trading system that was dealing in unregulated derivatives, contributing greatly to the problem. While Democrats took action by passing the Dodd-Frank bill to eliminate financial abuses, the Republicans held firm to a hands-off business as usual approach. What would Romney have done?

HIGH UNEMPLOYMENT: When Obama took office, the level of unemployment was literally sky-rocking by the hour. Obama did what any reasonable President would have done, by signing a job stimulus bill, designed to help people get back to work. While the federal government used Keynesian economics through deficit spending to prime the pump, Republican Governors in nearly 30 states did exactly the opposite, which was counterproductive, by laying off people, and making the recession worse.

A pure capitalist total free market response to the Great Recession would have triggered a Great Depression. The history of the 1929 Stock Market crash, and the subsequent four years of inaction under President Hoover, proved that point. Governments must do what they can to help the nation out of a deep recession, and it appears Obama did as good a job as any President could have.

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One Comment to “Obama Inherited the Great Recession”

  1. magnificent post, very informative. I ponder why the opposite specialists of
    this sector do not notice this. You must proceed your writing.
    I’m sure, you have a great readers’ base already!

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