Rating Obama- Part 2- Economics/ Domestic

In late 2008, the United States economy, and by extension , the world economy, was at the brink of the abyss. The risky business practices of banks and brokerages had caused a collapse in the credit markets and bank failures were at their highest rates since the Great Depression. Home mortgages were unpaid at near record rates. Foreclosures and bankruptcies exploded. The famous Lehman Brothers brokerage house failed. AIG Insurance failed. Fear flooded Wall Street as the media broadcast news of an imminent Great Depression II and the Dow Jones Industrial Average lost almost half its value from its high point. In the last days of the Bush administration, the Republican President was forced to step in and inject money into the banks and brokerage houses to keep the nation solvent. The Great Bailout of 2008 had begun.

When Barack Obama took office, national economic failure was still an option. He quickly put together an economic stimulus package designed to get money flowing into the economy in the form of public works projects. Obama's supporters on the left felt that the almost one trillion dollar stimulus package was too little to do the job of turning the economy around. His opponents on the right felt that the stimulus would burden future generations with crippling debt. The future may prove that both sides were correct.

Along with the failures of the economic markets, the nation's automobile manufacturers were also near collapse. Decades of poor business practices and their collective failure to bring to market the products that the public wanted, and which needs were satisfied by Japanese and European manufacturers, all resulted in a downward spiral of sales and earnings. General Motors, the nation's largest car maker had run out of cash. Chrysler had nothing left in its tank. Ford was still solvent, but its products had not been selling either. These factors,combined with the lack of credit from the 2008 meltdown, meant that cars weren't moving off lots, manufacturing ceased, and the American car industry, along with its plethora of independent suppliers, was about to die, and if they did millions would be unemployed.

Against a background of Republican charges of Socialism, the Obama administration forced bankruptcy on General Motors and a subsequent sale of Chrysler to Italy's FIAT Corporation. In return for these measures, as well as product restructuring plans and union contract givebacks, the administration pumped needed cash into both companies to keep them solvent. Ford alone eschewed government intervention as the corporate leaders felt that they had enough cash on hand to weather the storm.

Today, the economy pulled back from the brink. Economists as talking about "green shoots of recovery". Following a period of severe layoffs, companies are stating to talk about hiring. A small glimmer of hope is on the horizon.

So how does one grade President Obama's performance? Within a short time after taking office, he had to have his team in place and form appropriate responses to the banking failures, the freezing of credit markets, job losses, and the potential failure of the entire automobile industry. Mr. Obama never set up false hopes of rapid recovery. He spoke calmly and honestly about the problems. Despite taking fire from both the left and the right, the President steered a course that was admirable in both its effectiveness and in its restraint, trying to do what had to be done, neither too little money nor too much government intervention.

In the category of "Economics/Domestic" President Obama earns a grade of "A".