Nearly alone among progressives, I supported the bank bailout in the waning days of the 2008 presidential campaign and defended the stimulus package in early 2009. While people bitched and complained about unworthy banks getting a life-line from the taxpayers, I told you that it was going to save you from losing all your savings and help get the economy back on track. No one wants to bail out crooks, but in the system we have there isn’t much choice. That’s why the the financial reforms that (hopefully) pass later this year are going to be the real test of whether we’ve learned anything and are prepared to takes steps to change the system we have so we don’t just have a repeat of the problems that caused the economic meltdown in the first place. There are still very serious problems in our economy, including an ongoing commercial real estate problem, a home foreclosure crisis that isn’t going away, and very high unemployment. But we didn’t lose all our savings and the markets are working again.
The political consensus may be that President Barack Obama’s handling of the economy has been weak. The judgment of money in all its forms has been overwhelmingly positive, and that may be the more lasting appraisal.
One year after U.S stocks hit their post-financial-crisis low on March 9, 2009, the benchmark Standard & Poor’s 500 Index has risen more than 68 percent, and it’s up more than 41 percent since Obama took office. Credit spreads have narrowed. Commodity prices have surged. Housing prices have stabilized.
“We’ve had a phenomenal run in asset classes across the board,” said Dan Greenhaus, chief economic strategist for Miller Tabak & Co. in New York. “If he was a Republican, we would hear a never-ending drumbeat of news stories about markets voting in favor of the president.”
The economy has also strengthened beyond expectations at the time Obama took office. The gross domestic product grew at a 5.9 percent annual pace in the fourth quarter, compared with a median forecast of 2.0 percent in a Bloomberg survey of economists a week before Obama’s Jan. 20, 2009, inauguration. The median forecast for GDP growth this year is 3.0 percent, according to Bloomberg’s February survey of economists, versus 2.1 percent for 2010 in the survey taken 13 months earlier.
I just think it’s worth reminding people what they got in return for the bailouts.