14.5 The Presidency of Barack Obama and the Great Recession

Barack Obama's presidency marked a historic moment as the first African American to hold the office. His election in 2008 symbolized progress in race relations and changing demographics in the US. However, it also sparked backlash and increased partisan polarization.

Obama took office during the Great Recession, the worst economic crisis since the Great Depression. His administration responded with stimulus measures and financial reforms, but the recovery was slow and uneven, shaping much of his domestic agenda.

Obama's Election: Historical Significance

Groundbreaking Victory

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• Barack Obama, born to a white mother from Kansas and a Black father from Kenya, was elected as the 44th President of the United States in 2008 becoming the first African American to hold the office
• Obama's election was seen as a significant milestone in U.S. history reflecting changing attitudes towards race and the growing influence of minority voters in national politics
• The election of the first African American president was widely celebrated as a symbol of progress in a nation with a long history of racial discrimination and inequality

Campaign Strategy and Backlash

• As a candidate, Obama ran on a platform of "hope and change" promising to bring a new era of bipartisanship and reform to Washington, D.C.
• Obama's campaign utilized innovative digital strategies (social media) and grassroots organizing to mobilize a diverse coalition of supporters particularly young voters and communities of color
• Obama's victory also sparked a backlash among some conservative voters and politicians leading to increased partisan polarization and the rise of the Tea Party movement
• The opposition to Obama's presidency included the "birther" movement which questioned his eligibility to serve as president based on false claims about his birthplace (Hawaii)

The Great Recession: Causes, Course, and Consequences

Origins and Triggers

• The Great Recession, which began in late 2007 and lasted until mid-2009, was the most severe economic downturn in the United States since the Great Depression
• The primary cause of the recession was the bursting of the housing bubble which had been fueled by risky lending practices (subprime mortgages), financial deregulation, and the widespread use of complex financial instruments such as mortgage-backed securities
• As housing prices fell and foreclosures increased, the value of these securities plummeted leading to a crisis in the banking and financial sectors
• The failure of major financial institutions, such as Lehman Brothers in September 2008, further exacerbated the crisis and led to a freeze in credit markets

Economic Impact and Aftermath

• The recession resulted in significant job losses with the unemployment rate reaching 10% in October 2009 and many Americans experiencing long-term unemployment
• The economic downturn also led to a sharp decline in consumer spending and business investment contributing to a contraction in GDP
• The consequences of the Great Recession were far-reaching including increased poverty and inequality, a slow recovery in the housing market, and long-term damage to the labor market and individual financial well-being
• The recession exposed weaknesses in the U.S. financial system and led to calls for increased regulation of the banking industry (Dodd-Frank Act)

Obama's Economic Response: Impact and Evaluation

Stimulus and Financial Stabilization

• Upon taking office in January 2009, the Obama administration faced the immediate challenge of responding to the ongoing financial crisis and recession
• In February 2009, Congress passed the American Recovery and Reinvestment Act (ARRA), a $787 billion stimulus package aimed at boosting the economy through a combination of tax cuts, spending on infrastructure and education, and aid to state and local governments
• The administration also implemented a series of programs to stabilize the financial sector including the Troubled Asset Relief Program (TARP) and stress tests for major banks
• The Obama administration's response to the housing crisis included programs such as the Home Affordable Modification Program (HAMP) and the Home Affordable Refinance Program (HARP) which aimed to help homeowners avoid foreclosure and refinance their mortgages

Evaluation and Long-Term Effects

• While the stimulus package and other measures helped to prevent a deeper recession and stabilize the financial system, critics argued that the response was insufficient and failed to address the underlying structural issues in the economy
• The economic recovery following the Great Recession was slow and uneven with many Americans experiencing stagnant wages and a lack of job opportunities particularly in manufacturing and other sectors hit hard by the downturn
• The Obama administration's economic policies, including the Dodd-Frank Wall Street Reform and Consumer Protection Act and the creation of the Consumer Financial Protection Bureau, aimed to prevent future financial crises and protect consumers but faced opposition from Republicans in Congress
• The long-term impact of the Obama administration's economic policies remains a subject of debate with some arguing that they helped to lay the foundation for a more stable and equitable economy while others criticize them as overreach and harmful to business

Obama Presidency: Domestic and Foreign Policy Initiatives

Domestic Policy Achievements and Challenges

• The Obama administration pursued a range of domestic policy initiatives including healthcare reform, environmental regulation, and immigration reform
• The signature domestic achievement of the Obama presidency was the Affordable Care Act (ACA), also known as Obamacare, which aimed to expand access to health insurance and improve the quality of healthcare in the United States
• The administration also implemented new regulations on greenhouse gas emissions and other environmental policies, such as the Clean Power Plan, which sought to reduce carbon emissions from power plants
• On immigration, the Obama administration pursued a policy of prioritizing the deportation of criminals and recent border crossers while also implementing the Deferred Action for Childhood Arrivals (DACA) program which provided temporary protection from deportation for certain undocumented immigrants who had arrived in the United States as children

Foreign Policy Approach and Controversies

• In foreign policy, the Obama administration sought to end U.S. military involvement in Iraq and Afghanistan while also pursuing a "pivot to Asia" to counter the growing influence of China in the region
• The administration's foreign policy was also marked by a focus on multilateralism and diplomacy including the negotiation of the Iran nuclear deal and the normalization of relations with Cuba
• However, the Obama administration faced criticism for its use of drone strikes (Pakistan, Yemen), its response to the Syrian civil war, and its handling of the rise of ISIS in Iraq and Syria
• The Obama presidency also saw a growing partisan divide in Washington with Republicans in Congress often opposing the administration's policies and initiatives leading to gridlock and government shutdowns (2013 shutdown over Obamacare funding)