“Every economist who has looked at it has said that [ARRA] did its job,” the President said the other day in Wisconsin. “It put a brake on the collapse of the economy. We avoided a Great Depression. We are now growing again. The problem is, number one, it’s hard to argue sometimes, things would have been a lot worse. Right? So people kind of say, yeah, but unemployment is still at 9.6. Yes, but it’s not 12 or 13, or 15.”
Obama is right. As he mentioned earlier in his remarks, “I know that sometimes people don’t remember how bad it was and how bad it could have been. But when I was sworn in, we were losing 750,000 jobs a month. Every – each month, we were losing 750,000 jobs. The economy was shrinking at 6 percent. It was contracting by 6 percentage points. That’s faster than it had in decades.”
Yes, ARRA helped prevent an even deeper recession. Moreover, the steps that began under President Bush and continued under Obama to stabilize the financial system avoided the collapse that many experts had feared.
Obama’s problem, however, is that Americans are looking ahead, not back. They are focused on the problems that remain, not those that were avoided (and, thus, that they never experienced to begin with). They want Obama to clean things up – now!
He cannot do so, of course. Even the world’s most powerful man has limited power to quickly revive an economy with such deep-seated problems.
Having said that, Obama did make things a bit worse for himself in one respect. In his economic and budget blueprint, which he released in late February 2009, he predicted that, due in part to ARRA, unemployment would peak at 8.1 percent in 2009 before gradually falling in the years thereafter.
That prediction has proved useful fodder for Obama’s critics who argue that, with unemployment hovering near 10 percent, ARRA simply hasn’t met the expectations that Obama himself had set.
Expectations matter, as congressional Democrats – whose political fate is closely tied to Obama’s political standing – are about to learn.
Obama and the Democrat-controlled Congress, aided by a deft Federal Reserve, avoided an economic calamity. Unfortunately for them, the American people are focused on the problems that remain.
Click here to view the previous Capital Exchange post.
Lawrence J. Haas is former Communications Director to Vice President Gore and, before that, to the White House Office of Management and Budget. He's now a public affairs consultant who writes widely about foreign and domestic affairs, including fiscal policy.
