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"A long, long period of halting and slow growth was baked in the cake
when he took office," said Harvard University economist Kenneth Rogoff,
a former adviser to Obama's 2008 GOP opponent, John McCain, and the co-author of an acclaimed 2009 book on the nature of economic crises, This Time is Different: Eight Centuries of Financial Folly. "It's
very difficult after such a huge credit bubble and financial collapse
to recover all that much faster than we've been doing. It wouldn't have
mattered if McCain had won. We would have been in a similar situation."
The traumatic events around the world that have been exacerbating the
recovery, especially Europe's debt crisis, are mostly out of Obama's
control. That too was more or less predetermined, Rogoff said. "The
sovereign debt woes in Europe are prototypical of a financial crisis of
this size," he said. The only difference this time is that the new fact
of the eurozone might have made things worse, Rogoff added,
because it prevented individually troubled nations such as Greece from
devaluing their currencies and recovering faster.
But there is general agreement on both sides of the aisle that Obama
could have done a better job of leadership, both at home and globally.
That he could have done much more to make Americans and the rest of the
world believe he was indeed doing "everything" to tackle the toughest
issues and thus restore what JPMorgan Chase Chairman Jamie Dimon, a
sometime Obama adviser, last week called the "secret sauce" to any
economic recovery: confidence.
As Obama himself seemed to understand at the outset, the economic
devastation he faced was the worst in 80 years. It was far worse, in
other words, than anything Jimmy Carter, Ronald Reagan, Richard Nixon,
or Gorge H.W. Bush had to overcome. And because this recession was
caused by an unprecedented financial collapse, history shows that it was
destined to be longer-lived than most.
The numbers tell part of that story. What Rogoff calls the Great
Contraction is essentially an inversion of the debt-inflated consumer
bubble of the 2000s, a continuing collapse of demand that has lingered
longer than many of Obama's top advisers or the Federal Reserve thought
would occur. Though the recovery technically began in June 2009, the
reason for this "jobless recovery" is pretty straightforward: Consumers
aren't buying, stores aren't selling, and as a result companies aren't
making--or hiring. That has been exacerbated by a credit crunch that is
also historic. Consumer confidence is at the lowest level since 1980,
new data show.
Unemployment trends also indicate that it is somewhat unfair to
accuse Obama, as his GOP opponents are wont to do, of driving up the
jobless rate beyond what it was when he took office. The official
recession began in December 2007, more than a year before he became
president, and ended in June 2009, some five months into his presidency.
But the unemployment rate is a lagging indicator; in November of 2008,
the month of Obama's election, it was still only 6.8 percent, though it
had slowly climbed from December and it reached a height of 7.8 percent
in January, just before Obama was sworn in. Still driven by what began
as George W. Bush's recession, it didn't bottom out until nine months
into Obama's term, 10.1 percent in October of 2009, and then barely
began to decline over the next two years.