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Obama’s Two-Year Economic Report Card

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Posted on Dec 31, 2010
White House / Pete Souza

Presidential huddle: Barack Obama holds a meeting on the economy with his advisers in the Roosevelt Room of the White House on Nov. 15.

By Nomi Prins

(Page 2)

Unreformed Banking System

Throughout his presidential campaign and his first 18 months in office leading up to the passing of the Dodd-Frank so-called financial reform bill this summer, President Obama asserted that the crippled economy was predominantly the result of failures in the banking system.

He admonished bankers for their greed and vowed that those days were over.  Never again. Blah, blah, blah. But, the financial reform bill that he championed stopped none of the risky practices of the most powerful banks. (If you want to buy a package of distressed mortgages, call any of them today.) Nor did it break them up into smaller, more easily regulatable entities. Indeed, the largest banks in the United States are now bigger and stronger than they were before the bailout, even as smaller banks continue to close, creating a far less stable banking environment than before the crisis.

Geithner, as Obama’s treasury secretary, remains an apologist for the bailout, and it was Obama who moved to reconfirm Ben Bernanke as head of the Federal Reserve instead of making good on his major promise of “change” in the financial system. That’s why Wall Street bonuses this year are expected to be 5 to 10 percent higher than last year, even though bank profits are lower and lending remains muted. Because things have changed so much.

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Jobs

On the job front, the picture remains bleak, as everyone is keenly aware. Nearly 11.5 million people have lost their jobs since Obama took office, despite claims that the $787 billion stimulus package saved 3 million to 4 million jobs. The unemployment rate of 9.8 percent is 32 percent higher than the 7.4 percent rate it was before Obama was inaugurated, and it has steadfastly stood at that level throughout his term.

Even worse, the number of workers who have been unemployed for over six months remains the seventh-highest on record at 6.1 million. There are still 4.4 unemployed workers for every available job (compared to 2.8 workers per job during the early 2000s recession). Thus, one in six U.S. workers is either unemployed or underemployed, which amounts to nearly 26.8 million workers.

Meanwhile, corporate profits have jumped back to near-historical highs, and banks are hoarding an extra $1 trillion in reserve at the Fed instead of using it to restructure mortgages or lend to small businesses that could create jobs with the money. Obama’s administration has been unable to find a way to force more job creation by tying corporate and bank well-being to that of the greater economy, either because it can’t or doesn’t want to.

Health Insurance

There were 59 million Americans without any health insurance in 2010, up from 46.3 million, or about 15.4% of the population in 2009, which was a slight increase from 2008. That 27% increase in 2010 is the highest per year under any presidency.

Sure, Obama promised that his new health-care-so-called-reform bill would help when it takes effect in 2014 and expand coverage to more than 32 million uninsured Americans. Meanwhile, health insurance companies hiked premiums by 14% this year and dropped the amount of coverage they provide for those increases. Why? Because they can. At that rate, even people that do have insurance coverage will see their costs nearly double by the time the reform bill takes effect, because “reform” never capped the premiums insurance companies can charge, which is not a tiny omission. This while attempting to mandate that everyone purchase health insurance, a double gift for insurance companies, now being battled out in the courts for the constitutionality of the mandate, not the extortionist cost of health care and insurance.

Meanwhile, the top 10 health insurance company CEOs bagged $228 million in 2009, up nearly 162% from the year before Obama took office, and they anticipate even more for 2010—and yet there are no major audits of their business practices on the horizon.

Citizen Sentiment

Despite his rhetoric to the contrary, Obama’s policies are far more pro-corporate than pro-populace, not a huge surprise, but still the reason that the Main Street economy isn’t improving. According to a Bloomberg survey from early December, more than 50 percent of Americans say they are now worse off economically than they were when Obama took office, a third think they are doing better, and two-thirds believe the country is headed in the wrong direction.

Those poll numbers, considering the weakness in the economy, aren’t necessarily horrible. President Ronald Reagan’s numbers were even worse after his first two years, and he still won his second term decisively. Plus, Obama inherited an abysmal economy, as he continues to remind us.

But just because you get on the train after it’s already rushing out of the station doesn’t mean you can’t find a way to stop it before it decimates a town or something bigger. The guys in the film “Unstoppable” ignored the dumb ranting of their suited bosses and saved the day. It can be done. (Go see the film; it’ll make you smile.)

A higher stock market is of little comfort to the millions of Americans who don’t have jobs, are facing foreclosure, fraudulent or otherwise, or have no health coverage. Equally, it’s of little comfort that, rather than finding the money to help this swath of citizens, the Obama administration added $700 billion to the deficit by giving the wealthiest Americans more tax breaks. Hell, if you’re gonna go for broke on the deficit, why not fight to spread that same $700 billion over the rest of the citizenry instead?

Obama’s economic priorities are primarily benefitting a small and influential part of the population, but they have not provided the rest of the country with anything to be optimistic about this holiday season. In that regard, he’s more Scrooge than George Bailey.


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Dale Copps's avatar

By Dale Copps, January 4, 2011 at 6:44 am Link to this comment

Let’s have less idolizing of Bernie Sanders (one of my senators). He had an opportunity to scuttle the faux health care bill and passed, and his “filibuster” was little more than a publicity stunt, although it seems to have snowed just about everybody.

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By berniem, January 3, 2011 at 4:13 pm Link to this comment

To my mind all one needs to know about Obama’s handling of our economic woes is that he is doing NOTHING to stop Intel and Hewlett-Packard from investing millions to build schools and provide training as well as constructing factories in VIET NAM which will result in massive lay-offs here! All of you Vets from the Nam war, aren’t you proud that your service and sacrifice along with the death of 50K+ of your brothers contributed to the greater glory of the Amerikan corporatocracy and neo-liberal capitalism? Remember this next time you get screwed by the VA! We need a return to the spirit of ‘68. FREE BRADLEY MANNING AND JULIAN ASSANGE!!!!

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Paolo's avatar

By Paolo, January 3, 2011 at 2:38 pm Link to this comment

Thought I’d drop in after a bit of a break with my libertarian perspective on this whole mess.

Both major parties, along with their corporate sponsors and the Federal Reserve, have mucked things up so badly, there is no way out of economic catastrophe, this time.

The official public debt is now closing in on 15 trillion, but that doesn’t include obligations like Social Security, Medicare, and the bailouts of Fannie and Freddie. Toss those in, and we’re under water to the tune of 60 trillion.

That amount of debt can only be repaid in one of two ways: repudiation of the debt (that is, declaring bankruptcy openly) or inflation (that is, declaring bankruptcy on the sly).

Take just the lower number: 15 trillion. The interest alone on the debt in FY 2010 was over 400 billion. That is, if we suddenly balanced the books, and began trying to pay down the debt with a payment of one billion PER DAY, we’d still be deeper in the hole at the end of the year.

Some perspective on a trillion dollars: if you were born in the year 1, and spent a million dollars PER DAY, you still would not have spent a trillion dollars, in the year 2011. If you spent a dollar per second, starting now, you would not have spent a trillion dollars after thirty-thousand years.

In summary: we are screwed. Sayonara, USA. Stock up on freeze-dried food, folks. It’s gonna get ugly.

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By ElkoJohn, January 3, 2011 at 12:58 pm Link to this comment

Our government operates under the principle that what’s
good for Wall St and the multinational corporations is good for America.
The Republicans are heartless about it, and the Democrats
try to throw some bones to the people to stay in the running
against the Republicans—but let’s face it, the average person
lives pay check to pay check, and the ruling class doesn’t give a damn.
The ticking time bomb is the national debt.
I think this will bring the empire down.
‘‘Enlightened self-interest’’ just doesn’t exist in our ‘‘greed is good’’ system.
The clock is ticking.

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By dcrimso, January 3, 2011 at 12:49 pm Link to this comment

Wake me up when the first Corporate CEO is hung from the lamp post.  Until then it’s all talk.

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Alonso's avatar

By Alonso, January 3, 2011 at 1:37 am Link to this comment

This didn’t start with Obama or the Republican or Democratic parties. It started with people thinking that you can get something for nothing. That the government can create jobs, wealth, or anything else except war. That the government will take care of everything. The one thing that the USA always gets is the government it deserves. Until people wake up to that reality things will continue on the current path.

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By alturn, January 3, 2011 at 1:27 am Link to this comment

We have had the same problem on the local level as is now being recognized on the national level.  You kick the bums out because they are not taking care of the people’s needs and they get replaced with other cogs with the same consciousness. 

People power must emerge.

“Despite the turmoil, what is happening around the world is for the good of mankind. Politicians will look for guidance, and the will of the people will become the constitution of nations and countries.”

“The US and the USSR are no longer superpowers. Humanity is the superpower. The will of the nation and country will be based on the will of the people. The people will make sure politicians do not make mischief.”

“The younger generation, and ordinary people everywhere, expect politicians to set an example, to serve the people with honesty, sincerity and detachment. In Maitreya’s view, no leader is attending to his duties in the right fashion at the present time. Instead of fulfilling the will of the Lord, they are merely fulfilling their own desires. This way lies nothing but confrontation, confusion and chaos. Maitreya said: “It is the destiny of nations and countries that you are playing with. What are you doing for the younger generation? Nothing. You want them to walk in your footsteps, but there is a gap growing between the older and younger generations. Society will not be what the older generation is hoping for. It will be completely different.””
- World Teacher Maitreya through an associate as provided to the media by Share International

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By the worm, January 2, 2011 at 9:58 pm Link to this comment

Obama’s Top Nine

1. Shifting private debt to the public sector (thereby freeing corporations, esp
the financial industry, but also financial arms of GM, GE, etc, and saddling the
middle class with the obligation to ‘pay it off’).

2. Watching private sector profits reach un-precedented levels (while
investment goes abroad, hiring moves abroad, and manufacturing continues to
disappear and un-employment continues).

3. Raising the defense budget 6% (so, when “cuts” come, the defense industries
will be safely sandbagged).

4. Allowing the financial industry to ‘borrow’ from the ‘public sector’ (i.e. me
and you) at 1% and buy bonds that pay 3% interest (Banks take your $1 and
make $2 off each one they ‘borrowed’ from you. But, here’s the real deal: You
gave them the $1 they ‘borrowed’, and you pay them the $2 interest they
‘earned’ on the bonds. All the money they ‘invest’ came from you – a ‘loan’ –
and all the money they make comes from you – you have to cover the interest
on the bonds).

5. Allowing the financial industry to ‘borrow’ from the ‘public sector’ (i.e. me
and you again) at 1%, to loan to me and you at 4%, 12%, 18% or more
mortgages, credit cards and other lines of credit (pocketing 3%, 1% and 17% on
your and my money – first given to them by us, then ‘paid back with interest’ by
us).

6. Giving private sector insurers a windfall: mandated customers, with a
taxpayer-paid overhead rate of 20% for ‘mandated customers’ (20% of our
premium spent on administration, CEO salaries, bonuses, sitting on Boards to
set rates and decide who’s covered, lobbying for the insurers’ benefit,
advertising and propagandizing to redefine more and more as ‘health care
service’ while delivering fewer and fewer services—- essentially, giving our tax
money to insurers to do with it what they will). *The American people wanted a
government administered plan like Medicare - for everyone. (72% - CBS/New
York Times poll June 2009)

7.  Expanding the war in Afghanistan. (64% of the American people opposed
expanding the war in Afghanistan and wanted to disentangle from Bush-era
‘War on Terror’ and ‘preventive war’ policies. Still, over 60% of Americans
oppose the war.?

8.  Keeping the six too-big-to-fail banks – now bigger than ever; kept deposits
at risk by maintaining huge grey areas between commercial and investment
banking; didn’t ‘punish’ the financial industry - now even more profitable, with
bonuses among the biggest ever.

9. Supporting ‘The Compromise’ – giving billionaires $10 for each $1 to an un-
or under-employed person or family.

Obama’s first two years ! And the third is coming up !

For those of you keeping score, that’s about $14-16 Trillion shifted from
private sector corporate debt to you and me, the tax payers.

Balance Score Card ? Nope.

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By glider, January 2, 2011 at 7:26 pm Link to this comment

Johann,

“http://whatthefuckhasobamadonesofar.com/”

Yeah it is amazing what one can claim rhetorically when one is allowed to ignore actual results, outcomes, and better alternatives.

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By Amex, January 2, 2011 at 1:41 pm Link to this comment
(Unregistered commenter)

patriot 10101 - This is all true, but tell me how you can convince a nation of ignorant, fat, and lazy people that we are herded like cattle.

I have chosen the path of “just fuck the government” and live on the land where I was born, but refuse to call myself an American - I feel like a Native Indian!

I cannot endorse Americanism any longer as they are too stupid to to be championed.  I no longer believe in this system and I know that we are being fucked over by this plutocracy!

O’bummer is the last dupe job that I receive here as I as I am not going to vote anymore.  Yes - tell me that change only comes from the ability to vote, and I will tell you - Bullshit!!  There is nothing short of creating another French revolution to solve this current fuck job.  At least the French were able to revolt - The American is too fat and stupid to do anything!!!!

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democratz.org's avatar

By democratz.org, January 1, 2011 at 4:27 pm Link to this comment

Please.


I hope you will sign this petition and get your friends to sign it.

Fight back against conservatives in congress. Boycott some companies that donate to conservatives in congress.

Sign this petition at http://www.democratz.org demanding congress and the President enact a progressive agenda. Pass this link around to every one of your friends. Post it on bulletin boards, blogs and facebook groups around this country and send it on twitter. The Peaceful revolution has begun.

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JohannG's avatar

By JohannG, January 1, 2011 at 4:27 pm Link to this comment

As this analysis points out, the current White House
occupant has mostly continued his predecessor’s
policies. With predictable results. To be fair, on
the fringes there have been some changes…visit
http://whatthefuckhasobamadonesofar.com/ for details.
My take, for what it’s worth, is that Obama is a
morally vacant, non-transformational follower, NOT a
leader. I wish we’d had a great colored president,
instead we got another vapid Condi Rice, but even
more disastrously so.
Only thing that keeps me up at night is what is going
to replace this current nightmare in 2012…

Report this

By samosamo, January 1, 2011 at 3:29 pm Link to this comment

****************


If it were only true that it would shove o out in
2012, but hoping that a repub would not get
elected, just what does anyone think would
replace o. 2012 promises to be an ‘ugly as it
gets’ election year where even voter fraud will be
‘unashamedly’ blatantly on display, just as the
theft in wall street is and the control the military
has of this country.

And in the end, the winner will not look, feel or
act any different than o and his predecessors.

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By bpawk, January 1, 2011 at 3:15 pm Link to this comment

By decimating the left and pushing Ralph Nader et al out of the way for your great Obama, you have nowhere else to go now and Obama knows it. Your political choice from now on: right or extreme right.

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By Inherit The Wind, January 1, 2011 at 11:59 am Link to this comment

Hey, it ain’t all Obama! 81 Senators voted for the bill, and only, I think, 14 Dems and 5 GOPers voted “No”. That means 45 Dims and 36 Rethugs went for it.
That’s Bi-Partisan support for tax cuts for the richest!

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G.Anderson's avatar

By G.Anderson, January 1, 2011 at 10:28 am Link to this comment

Yes, this is the truth. the one that is being lived by the people everyday. Obama’s
administration is like a bad dream. It’s very much like a marriage, in which one day you
wake up to find out that your spouse is cheating on you, and only married you so they
could cash in.

The divorce is painful but it’s much less painful than looking at the cheater next to you
everyday.

There are irreconcilable differences between the American people and the Obama
administration.  If the Democratic party doesn’t dump him in the primaries, the Dims will
be finished.

Report this

By TAO Walker, January 1, 2011 at 2:40 am Link to this comment

Looks like “patriot10101” is the only one here (including Ms. Prins) with a clue about what the set-up really is.  The machinery of “governance” is doing exactly what it’s been designed and built to do….facilitating the exploitation and CONtrol of those “huddled masses” who have not even the fig-leaf anymore of any pretense to any “rights” (Human, civil, or otherwise), as mere livestock in the feedlot operation called the “global”-eCONomy.  “Conden” is apparently still lost in the allamericanfeverdream. 

“neen008”, on the other hand, is getting with “the program”....knock-offs are where it’s @

HokaHey!.

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By REDHORSE, December 31, 2010 at 11:49 pm Link to this comment

THANK YOU TRUTHDIG FOR ANOTHER NOMI PRINS ARTICLE!! And, TY Nomi Prins.

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By skimohawk, December 31, 2010 at 10:13 pm Link to this comment
(Unregistered commenter)

Ms. Prins:
Thank you for honestly detailing Obama’s dismal record.
I sincerely hope you and other writers will continue bringing to light the sham that is now our government.
Barack Obama is in bed with the big banks, and it’s obvious we can expect no change for the better during the next two years.
What’s frightening is that those who voted for Obama in 2008 are just beginning to wake up and smell the coffee, and will be two years from now more receptive to the deception and duplicity of the Republicans: 2012 will see us only be going from bad to worse.

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By Conden, December 31, 2010 at 9:07 pm Link to this comment

Great article Nomi.  The obama administration and the democrats are totally right wing.  There is no excuse for their willfully chipping further away at the majority of people in this country when what they obligated to do is push egalitarian policies—to end homelessness, provide living wage, green jobs to everyone, and lessen corporate power instead of cementing it into place with the same shovel they use to crush young people into a life of peonage.

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