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The 2008 US election and the economy: Legacy, issues, and consequences

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Economic issues took centre stage during the 2008 presidential campaign. The deterioration ofthe economy and the deepening financial crisis pushed voters' concerns for their jobs and personal finances to the forefront ofthe election campaign. Barack Obama benefited from the economic downturn to win the White House by criticizing George W. Bush's record and economic policies, by emphasizing the need for a decisive plan to kick- start the economy, and by adopting a moderate and confident attitude in these difficult times. To understand why the economy was so central to this campaign, we have to answer the following questions. How can we assess the Bush administration's economic record? Was it as bad as the voters' reaction seems to indicate? And what is Obama's plan for the economy? Will he be able to turn things around?The scope of the financial and economic crisis could change Obama's intentions, however. The transition team and those appointed to strategic economic posts will recommend a series of measures to be enacted by the new president to deal with this crisis. Unlike the proposals made by Bush during the recession of 2001, Obama does not seem to want to be bound by any dogmatic economic policy. The Bush team's first salvo was heavily influenced by supply-side policies that aimed to reduce the role of the state and relieve the tax burden of Americans who were the most apt to invest the richest Americans. Taxes were cut in 2008 but the stimulus effect on the economy was almost nil, with most households using their tax relief cheques (for a total of more than $100 billion) for savings or to pay down debt. Since Obama has selected a fairly centrist team of individuals to handle economic issues, the economic stimulus plan proposed to congress should contain a combination of measures that go beyond the tax cuts promised during the campaign. Obama's presidency should begin with a more traditional, even Keynesian, approach to fixing the economy, characterized by a ma

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									Francis Généreux

The 2008 US election
and the economy
Legacy, issues, and consequences




Economic issues took centre stage during the 2008 presidential campaign.
The deterioration of the economy and the deepening financial crisis pushed
voters’ concerns for their jobs and personal finances to the forefront of the
election campaign. Barack Obama benefited from the economic downturn to
win the White House by criticizing George W. Bush’s record and economic
policies, by emphasizing the need for a decisive plan to kick-start the
economy, and by adopting a moderate and confident attitude in these difficult
times. To understand why the economy was so central to this campaign, we
have to answer the following questions. How can we assess the Bush
administration’s economic record? Was it as bad as the voters’ reaction seems
to indicate? And what is Obama’s plan for the economy? Will he be able to
turn things around?


Francis Généreux is a senior economist in the economic studies division of the Mouvement
Desjardins. With François Dupuis and Yves St-Maurice, he has published a detailed study
of the presidential campaign’s economic issues, published in October 2008, “The November
4th election and the US economy,” from which most of the figures cited in this article were
drawn. The views expressed in this article are his own and do not necessarily reflect those of
the Mouvement Desjardins.



                                           | International Journal | Winter 2008-09 | 95 |
| Francis Généreux |



THE BUSH ADMINISTRATION’S ECONOMIC RECORD
On 20 January 2001, George W. Bush was sworn in as the 43rd president of
the United States of America. According to the National Bureau of Economic
Research, the country slipped into a recession just a few weeks later, in
March. Responsibility for that economic downturn cannot be attributed to
the then-incoming administration, however, since the underpinnings of a
recession were in place before the November 2000 election. The burst of the
high-tech bubble that started during the winter of 2000, the overinvestment
linked to that bubble, rising energ
								
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