OBAMA’S FIRST 100 DAYS REPORT CARD
"Tomorrow, America will get to hear those four words we've been waiting for, 'former President George Bush,' President Bush said he is leaving Washington with his head held high, because it is the best way to spot shoes that are coming at you." --Jay Leno
This amusing anecdote sums up Bush’s turbulent presidency, an administration marred by the distressing laxity of Government in the aftermath of Hurricane Katrina, the apparent disappearance of the post-Clinton federal budget surplus, eradication of the middle class, explosion of healthcare costs, the dollar at a 30-year low, inflation of commodities, the United States’ heightened international unpopularity and the subjectively pointless Iraq war. According to Gallup Polls, former President George Bush left office with a 21% approval rating, one of the lowest approval ratings in American history. This distasteful notion armed with discerning propaganda leaves the new President knee deep in domestic and foreign tribulations. Hence, with dignified austerity and sleeves rolled up President Obama has gone to work and it is up to all of us pundits and prognosticators alike to grade his first 100 days in office. What are Obama’s plans to reverse the daunting economic downturn? The major fiscal defibrillator unveiled by the Obama Administration is the stimulus package – titled the American Recovery and Reinvestment Act- it is intended to give the economy a short term jolt and provide long term growth. The ambitious plan which was met with disarming verbosity from the lugubrious republicans is a $787 billion recovery package with $212 billion dedicated to tax cuts, $267 billion in direct spending and $250 billion in other types of spending. But there is method to this madness. First and foremost, we have learned from the interventionist economic policies that defined the Great Depression championed by the famed intellectual economist John Maynard Keynes whose theory is based on the circular flow of money that the way out of a recession is timely spending. Simply speaking, Keynes believed that one person’s spending translated to another’s earning and when the earner spends her money she is in turn supporting another’s earnings. Business firms respond to increased sales by ordering more raw materials and increasing production. The spread of business activity increases the demand for labor and raises the demand for capital goods. This continuous circle is the basis for a healthy functioning economy and in a sputtering financial system it is the dutiful responsibility of the public sector to take the reins and get it in the pink. The stimulus package not only encourages government spending which works over time but also includes tax cuts which generally work faster to jump start the economy. Specifically the spending will be focused on needed amenities and improvements- infrastructure, alternative energy, healthcare, state and federal programs. Let us also look at the glass half full and suggest that without the bank bailout we would be in a much more glaring predicament knowing the FDIC would be the last barrier to the total collapse of the
American financial system. Before the proposed bailout, banks were crashing left and right, we witnessed the unfortunate demise of Wachovia, Lehman Bros, WAMU, Merryl Lynch to name a few. A glimpse to the future minus the bank bailout we could be staring at the apocalyptic termination of the banking sector. The good news is there hasn’t been a major bank failure since TARP was launched. The Obama Administration took it a step further by introducing the Public-Private Investment Program which according to them will be used to seduce private investors to buy up toxic assets backed by mortgages and other loans; the goal is to buy up to $500 billion worth of subprime mortgages that are in danger of default. This should cleanse the balance sheets of many large banks and in turn help credit flow again. To a certain level, apart from interest rates at a historic low, this program can be credited for the major banks like Wells Fargo, Bank of America, Goldman Sachs, JPMorgan Chase posting a better than expected earnings report and profit growth. But caveat emptor to potential investors, conventional wisdom states that these better than expected earnings reports could be to a ploy to drum up business by appearing healthy and refusing the bailout and can be very misleading. The Obama administration is proving to be tough on Wall Street by enacting the Capital Assistance Program (CAP), better known as the banking stress test to investigate these “profits.” The Wall Street Journal explains, “The purpose of this test is to ensure that major U.S. banks have sufficient capital to perform their critical role in our financial system on an ongoing basis and can support economic recovery.” Unlike former President Bush’s trickle-down theory, President Obama is attempting to edify the housing dilemma by bridging the gap between the upper class and the fading middle class in unveiling his housing plan led by the Homeowner Stability Initiative. The plan hopes to ease millions of borrowers suffering from foreclosures, falling home prices and unaffordable monthly payments by lowering interest rates, loan modifications or mortgage refinancing. Since the arrested development of the stock market lead by the sinking financials there are authentic indications showing we might be reaching a bottom. New claims for jobless benefits have declined and seem to be stabilizing. More important is the trend, new jobless claims have fallen in each of the subsequent two weeks with a slight increase this past week. There is still a brooding sign of recession but the recent fall calls for a cautious level of optimism. The financials have shown signs of life leading to a rebounding of the stock market from a 12-year low, to its biggest percentage gain in a four week period since the spring of 1933. Further evidence of this is the CBO budget forecast. The budget office produces the year by year forecast and projections for calendar years 09-19 and displays GDP rebounding from -0.3% slump in 2010 to an optimistic 2.9% rally in 2011.
Let us take a closer look at some of his questionable actions. The party demarcation of the 2008 presidential campaign has spilled over to the Obama presidency substantiated by bipartisanship consensus being compromised. When President Obama was on the campaign trail, one of his campaign promises was to reach across the aisle to the Republicans and include them in these challenging issues facing the nation. His expansion of government and his large fiscal stimulus has helped to alienate the small government/ anti-socialist Republicans. Judson Berger of Fox News reiterates, “Those policies have alienated many Republicans on Capitol Hill and have led to criticism that Obama has trampled on his pledge of bipartisanship”. This partisan disparity is evidenced by the wide 68 percent point gap between the number of democrats who approve the job the President is doing (92 percent) and the republicans who approve of the job he is doing (24 percent). It is the largest disparity recorded in recent history. It takes two to tango and the culpable Republicans with chilled cynicism haven’t helped their case by being the party of “NO”. On April 2, 2009 the leading industrial nations came together to explore solutions to the dire global financial market. The world was finally ready to un-wrap its gift, a new president from the lone superpower in the world, a demigod in the eyes of many with hopes to relieve the world with his ideologies, would it be worth the wait? With his spending bill in one hand and his commanding presence in the other, Obama arrived in London with a dignified display of cool but was met with cold formalities. The centerpiece of Obama’s agenda, the fiscal stimulus plan was met with discerning protests, a FrancoGerman stance, a general disdain for American capitalism stemming from the Bush Administration. His hope to force the international hand to follow suit and adopt a spending bill was met with deaf ears, European governments believe the focus should be on stricter regulation of financial markets. This is a glimpse into Obama’s command of the world, and it hasn’t been a pretty one. His shaky stance on supporting or not supporting war crime trials for Bush administration officials who allegedly approved severe interrogation techniques is worrisome. His first stance was a platitude denouncing the need to pursue these allegations, but with pressure from the far-left groups he reversed
that course. It hurts him politically because it makes him look weak and increases his unpopularity with the republicans. To say the least the fiscal stimulus package was a rocky affair. The fact that it is polluted with earmarks and pork-barrel projects is cause for concern. $200 million to give the National Mall a facelift, $276 million to fix computer systems at State Department, $650 million to repair Forest Service facilities, and many costly pet projects voted on by an esoteric group of senators on both sides of the aisle. It is lacking any significant tax cuts for small businesses and the individual tax relief, $15 per paycheck is laughable. Voting day in both the House and the Senate saw little to no action by the republicans and caused a huge partisan disparity. His leadership has come into question, is he in control of the Democratic Party or is Nancy Pelosi and Harry Reid the head Hanchos? But by all measures Obama’s first 100 days has been successful. According to CNN Polls, 61 percent of the public approve of the job he is doing and more importantly most feel the country is headed in the right direction. His extemporaneous ability to remain calm in the midst of a storm and his evangelic mastery of the pulpit has been his sword and shield in the exemplary way he is leading the country. It has been a newsworthy 100 days to say the least and we are looking forward to his next 100 days. He is our pilot and we are his passengers, we will dutifully continue supporting him for both our personal enhancement and the betterment of our great nation, I pray Obama gets us through this turbulence in one piece.