Obama's middling economic legacy

His last jobs report was depressingly fitting

This past Friday, we got the last jobs report we'll ever see under Barack Obama's presidency.

In December, 156,000 jobs were created, which is serviceable but not great. The unemployment rate was 4.7 percent, which isn't high. But it's above the 4 percent we reached in the late '90s boom. Same goes for wage growth, which was 2.9 percent, versus the 4 percent associated with a good economy. Labor force participation has stopped falling, but isn't really rising. And so on.

It's a jobs report that's moving in the right direction. But it elicits a shrug. Which is appropriate, since that's basically how one can describe President Obama's entire economic legacy.

The 2009 stimulus, for instance, successfully cushioned the Great Recession. But Obama's own advisers concluded it needed to be over twice as big. So we still got stratospheric levels of unemployment, which ground on for years, doing enormous damage to Americans' livelihoods. Obama never took seriously the need to fill vacancies on the Federal Reserve's governing board, even though more dovish officials could've given the economy an extra nudge of monetary stimulus.

Similarly, Dodd-Frank made real headway in establishing financial protections for ordinary consumers, ending "too big to fail," and bringing regulatory light to shadow banking. But financial reform didn't go so far as to actually break up the big banks, diminish their political clout in Washington, or break their stranglehold on homeowners. The Obama administration demurred from helping underwater homeowners, and every one of its major law enforcement agencies avoided prosecuting the big banks and their executives for rampant mortgage fraud. Instead, they settled for fines and civil suits. The entire approach prioritized keeping Wall Street stable, and sidelined everything else.

But the most telling example is ObamaCare. The program unequivocally improved circumstances for the bottom 20 percent of income earners, largely thanks to its expansion of Medicaid. But for everyone else it was a lot more ambiguous. People much higher up the income ladder who had been locked out of insurance due to pre-existing conditions now had it, but many more got stuck paying high premiums for the joy of high deductibles and copays, with help from subsidies that were far too skimpy.

Zach Carter recently noted that Obama himself said combating inequality was "why I ran for president." And by that metric, he failed soundly.

The caveat in Obama's defense — and it's a very big one — is it's genuinely not clear what else he could've done.

Not prosecuting Wall Street executives or legally demanding that banks lay off foreclosures seems like a clear unforced error. But it's not obvious any more could've been squeezed out of Congress on stimulus or financial reform. The Democrats' supermajority in the Senate was fleeting. Doing something about the Fed or fiscal relief (as opposed to legal relief) for homeowners would've required going through that legislative body.

Could they have passed a better version of ObamaCare if they'd just crammed it through right away, and not spent months unsuccessfully trying to bring Republicans on board? Maybe.

Getting back to the job reports, another funny thing about them is the outlandish excitement some center-left pundits keep expressing over what are fundamentally mediocre numbers. Again, this mirrors what, for my money, was most disturbing about Obama's legacy: not so much what he did, but his assessment of what he did. "Our policies are so awesome," the president reportedly complained to his aides. "Why can't you guys do a better job selling them?" The obvious answer is Obama's policies actually weren't awesome, and couldn't be sold as such.

What Obama failed to realize is that greatness isn't measured by what's come before, but by what the moment needs. This suggests he simply didn't grasp how bad things were in the country: how wracked it was by social and economic decay and the aftermath of the Great Recession, and how huge a material difference he'd need to make in Americans' lives to secure his legacy.

Had he realized this, perhaps Obama would've found the urgency and gumption to just steamroll the GOP and push the envelope as far as he possibly could in those few months when he had the power.

Finally, I think it's clear this blindness infected the Democratic Party's high command and Hillary Clinton's campaign. It's what convinced them the Rust Belt states were safe and they should run up the popular vote count in blue states. It's why they bet on a strategy of wooing upper-crust moderates rather than doubling down on working-class populism. And it's why they thought attacking Trump as a racist and a misogynist and a generally vile human being would work better than attacking him as a typical oligarch Republican.

It might not have changed Obama's economic legacy had everyone clearly seen the limits of what he'd accomplished, and how much more was needed. But it might have made Hillary Clinton president.


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