Shedding early light on President Barack Obama’s economic legacy

Fervor around the presidential campaign last week saw Indiana make headlines in its primary vote that helped solidify the likely candidates who will go head-to-head for the top office in the land in November.

Though President Barack Obama still has almost eight and a half months in office, the country’s fixation on who the next commander in chief will be has some already debating the legacy of the 44th president, including his economic impact.

If hindsight is 20/20, the best we can probably do at this early stage is 20/70. But let’s put on those glasses and take a look.

In a recent interview with The New York Times, President Obama said any analysis of his effectiveness guiding a labyrinthine economy needs to begin at the beginning, and be compared to other crisis situations similar to the one he stepped into. That would be difficult to do, because we haven’t had many historical periods like the one that crashed and burned into 2009.

THE GOOD AND BAD

If we consider jobs created and stock market gains since then, the diagnosis can’t be all dire. And GDP, excluding the 2009 drop of 2.8%, has averaged 2.1% over Mr. Obama’s tenure, according to Bureau of Economic Analysis data. This is the same level averaged under President George Bush, and higher than other developed nations post-crisis.

But wages are stubbornly low. The same New York Times article said household income is $4,000 less than it was at the end of President Bill Clinton’s term. Most income gains have gone to higher earners, further diminishing the ranks of the middle class.

Of course, U.S. presidents don’t have almighty control over the amorphous world economy, but their policy decisions can be scrutinized. Some said the $800 billion stimulus in 2009 was not enough to jump-start the economy after the Great Recession, while others called it reckless spending. Some say the Dodd-Frank financial reform law required banks to sit on too much capital as the economy was attempting liftoff. Budget deals to cut spending while removing some of President Bush’s tax cuts for higher earners have resulted in lower deficits, but at what cost to economic growth?

One thing is certain, we are not, as one famous presidential candidate has stated, a “third-world nation.” The U.S. is certainly more stable than it was in 2009 and is outperforming other advanced nations in the crisis’ wake. But ultimately it’ll be the long-term effects of the decisions made, including the Federal Reserve’s quantitative easing, keeping interest rates low, that will shed light on the effectiveness of this period of economic history and what lessons can be drawn from President Obama’s tenure.