The Obama Blunder That Gave Us Trump

The Emergency Economic Stabilization Act of 2008 (Division A of Pub.L. 110–343, 122 Stat. 3765, enacted October 3, 2008), commonly referred to as a bailout of the U.S. financial system, is a law enacted subsequently to the subprime mortgage crisisauthorizing the United States Secretary of the Treasury to spend up to $700 billion to purchase distressed assets, especially mortgage-backed securities, and supply cash directly to banks. The funds for purchase of distressed assets were mostly redirected to inject capital into banks and other financial institutions while the Treasury continued to examine the usefulness of targeted asset purchases.[1][2] Both foreign and domestic banks are included in the program. The Act was proposed by Treasury Secretary Henry Paulson during the global financial crisis of 2008 and signed into law by President George W. Bush on October 3, 2008.

In 1933, President Franklin D. Roosevelt signed an executive order creating the Works Progress Administration (WPA).

The WPA was just one of many Great Depression relief programs created under the auspices of the Emergency Relief Appropriations Act, which Roosevelt had signed the month before.

The WPA, the Public Works Administration (PWA) and other federal assistance programs put unemployed Americans to work in return for temporary financial assistance. Out of the 10 million jobless men in the United States in 1935, 3 million were helped by WPA jobs alone.

While FDR believed in the elementary principles of justice and fairness, he also expressed disdain for doling out welfare to otherwise able workers. So, in return for monetary aid, WPA workers built highways, schools, hospitals, airports and playgrounds. They restored theaters–such as the Dock Street Theater in Charleston, S.C.–and built the ski lodge at Oregon’s Mt. Hood.

The WPA also put actors, writers and other creative arts professionals back to work by sponsoring federally funded plays, art projects, such as murals on public buildings, and literary publications.

FDR safeguarded private enterprise from competition with WPA projects by including a provision in the act that placed wage and price controls on federally funded products or services.

In the months after the 'great recession', the unemployment rate peaked at 10.0 percent (in October 2009). Before this, the most recent months with unemployment rates over 10.0 percent were September 1982 through June 1983, during which time the unemployment rate peaked at 10.8 percent.

The highest rate of U.S. unemployment was 24.9 percent in 1933. That was during the Great Depression. Unemployment was more than 14 percent from 1931 to 1940. Unemployment remained in the single digits until 1982 when it reached 10.8 percent.

In exchange for their political support during the 2008 campaign, Obama promised the Clintons a healthcare bill and Hillary a Cabinet post... . Secretary of State...

His blunder was keeping his promise re health care...When what he should have done with his Democratic majority was to create and establish inextricable linkage between the needed bailout and  recovery of Wall Street and a bailout and recovery of Main Street through a series of FDR type amendments to the The Emergency Economic Stabilization Act of 2008....

His failure to produce immediate tangible, meaningful, and lasting economic and financial results for the average American voter produced the mid term defeat of Democrats which resulted in legislative obstruction, gridlock, and stagnation, electoral victory for Trump, and an illegitimate appointment to the Supreme Court...

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Comment by Ron Powell on July 9, 2018 at 11:20pm

@MS; For a number of reasons I can unequivocally state that there is/was no one who supported Obama more staunchly than I.

However, that being said, I believe that he made a few strategical and tactical errors through the course of his tenure that have had bearing and consequences re our current situation...

My calling this "blunder" out in no way diminishes my support and admiration of the first African-American President....

He lived the impossible dream and had a nearly impossible task...

My take on the matter at hand is simply this, had Obama gone the FDR route re the recovery from "the great recession", Congress would have had to hand him health care coverage on a silver platter...He would have been much too popular for them to have done otherwise....

Comment by koshersalaami on July 10, 2018 at 6:19am

This is actually an error he later acknowledged.

Comment by marshall bjohnson on July 12, 2018 at 10:41am

brilliant analysis.  reasoned arguments. seasoned by sage baby-boomers. i am itchin' to weigh-in. but first @Kosh- where did you see obama admit his mistake? 

Comment by mary gravitt on July 12, 2018 at 12:15pm

The problem Obama had was that he had too many Blue Dog Democrats in the Congress.  Gifford was one.  In the world of Realpolik, you must take sides ans standing in the Center won't get it.  The Koch brother and their partners see Obamacare as Socialized Medicine.  Trumpsters see Obamacare only benefiting Blacks and other peoples-of-color.  But Whites still dominate in population.  They have had the "high-wage" jobs which led to cancers and such.  This is forgotten in their racism.

Comment by Ron Powell on July 12, 2018 at 2:09pm

@Kosh; "This is actually an error he later acknowledged."

I am joining MBJ re his request for a citation and link to such an "acknowledgement" by Obama....

Comment by Ron Powell on July 12, 2018 at 2:21pm

@MG;  "In the world of Realpolik, you must take sides ans standing in the Center won't get it."

Obama was a political neophyte and the Clintons exploited his naivete by insisting that he push health care in exchange for their support.

A comprehensive plan, FDR style executive and legislative action re economic and financial recovery for working class and middle income voters  would have been a much more palatable place fore him to begin his administration even for the so called "blue dog Democrats"....

Comment by koshersalaami on July 12, 2018 at 2:37pm

I’m trying to remember where, but Obama stated that he’d been late in worrying about jobs compared to other issues. This was I believe in the period leading up to the 2012 election because this conversation happened in an electoral context. 

Comment by Ron Powell on July 12, 2018 at 6:55pm

@Kosh; You'll have to do better than a vague recollection. I'm certain that had Obama made such an admission, it would have been quoted and referenced frequently enough for me to have seen it and be aware of its thrust...

Such an acknowledgement on Obama's part would have been no small matter to the media...

It might even render the point of this post moot...


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