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The Economic Policies of the 2009-2015 Obama Administration. An Assessment

Term Paper 2016 21 Pages

Politics - International Politics - Region: USA

Excerpt

Contents

Executive Summary

Introduction

Main argument of Report
Situation of US before Obamas first presidential term
Credit crunch and the presidential election in 2008
First presidential term from 2009-2013
The presidential election in 2012
Second presidential term from 2013-2017
Fiscal Cliff in January 2013
US Government Shutdown in 2013
Mid Term election in 2014
Year 2015

US Industrial sector overview

Industrial sector SLEPT

US Company overview

US Company SWOT

Conclusion

Bibliography

Executive Summary

It was the 20th of January 2009, when Barack Hussein Obama became the 44th president of the United States of America. In 2008, the financial crisis has begun, which has played a very big role in the Obama´s policy and further steps taken towards the financial, economic and industrial sectors.

Also it was a big factor in his election campaign against John McCain, which led him to victory.

The focus of my report is Obama’s policy in the period between 2009 and 2015 and the End of his second and last inauguration as a President in 2016.

The contents of this report are the credit crunch, the two Presidential terms, the fiscal cliff in 2013, government shutdown in 2013, mid-term elections in 2014 and economic progress until 2015.

This essay shall take a bird eye view of the various policies which were undertaken by Obama during and before his time as the president. It includes how Obama dragged the country through the economic downfall and made the necessary advancements in the health sector with Obama health care program. Later part of the essay considers the automotive industry of United States and presents a detailed exegesis of US’s very own Ford motors.

Introduction

Barack Obama’s won the election in 2008 and promised the citizens of the United States that he would pass a law that would require every citizen to have insurance. Barack Obama created an economic policy that was meant to boost the economy. But did it really benefit the people of America and help the economy in America? The economic policy that President Obama created is called the Affordable Care Act or what most American’s call the Obama Care. Barack Obama has successfully brought the Affordable Care Act in legislation. The Affordable Care Act was signed into law on March 2010.

Main argument of Report

Situation of US before Obamas first presidential term

The terrorist attacks on 11 September 2001 changed Bush's and the American policies profoundly. Shortly after the attacks of September 11 made Bush the founder and leader of al-Qaeda Osama bin Laden for the responsible and demanded that the Taliban regime ultimately his extradition from Afghanistan within 14 days. He announced a war against terrorism. With great international support, the USA imposed on October 7 from its mission and marched into Afghanistan. Furthermore, there were steadily increasing pressure from Iraq and their leader Sadam Hussein. On August 29, 2005, Hurricane Katrina hit the southern US and sparked a most devastating natural disasters in the history of the United States. A dominant theme of Bush's second term remained Iraq where 130,000 American and 20,000 British troops are stationed. When he enter in January 2001 to the White House, the high-tech bubble was just broke on the stock market, and it ended the longest uninterrupted period of growth in American history, which began in the spring 1991.The terrorist attacks of 11 September 2001 clouded the economic outlook further. At the end of Bush's eight year old tenure not only the US financial system, but along with the exploratory oil prices endangered the real economy. The 2001 recession drove the unemployment rate to 6%, and then the rate fell constantly. (Lazuka, 2006)

Credit crunch and the presidential election in 2008

A swift reduction in the availability of money or credit from banks and other lenders lead to a financial deficit which is called as the Credit crunch. America faced one of the worst financial downfall in its history in the year 2008 where many major companies saw a shut down. Lehman Brother went bankrupt, AIG, Freddie Mac, Fannie Mae, HBOS, Royal Bank of Scotland, Fortis, Hypo and many others were also on the edge until they were rescued by some great amounts of money coming in the system. All the Observes believe that the after shocks of this financial earth quake would be felt for years to come. (Mathiason and Stewart, 2008) So, the situation became very critical when the check point for change in the power came up i.e. the presidential election of 2008. After this great financial issue at hand, the American people had to make a really hard decision and had to select someone who can sail the ship out of the storm.

The 56th election of the President of the United States of America took place on November 4 of 2008.

The US President-elect Barack Obama has made many political promises during the election campaign. Not least in the wake of the severe economic and financial crisis, he had to put his political priorities right. The focus is for Obama to combat the crisis. He calls for a rapid passage of a massive economic stimulus package from the Congress. Officially, an amount of 800 billion dollars is being spoken of. (ZEIT ONLINE, 2009)

After he finished thanking everyone, including his wife Michelle Obama and his family, President Obama stated the problems in America and what he wants to do to get America to get better. “Our economy is recovering”. President Obama is aware that the economy was not doing well when he was elected in 2008 but is aware that is improving. With the President stating this during his interview is conforms to the citizens of America that the economy is improving and it will get to a better place in a short time. Near the end of the speech, President Obama spoke about how America will make progress. And ended his speech with “Thank you, America. God bless you. God bless these United States”. (The Associated Press, 2012)

The major recommendations of Barack Obama included the following points which are mentioned in his book as well:

1. Jump start the economy with a $50 billion support that will give the money to the families struggling with the problems of food and mortgage payments.
2. Restore simple and fair values to the tax code by rewarding work instead of wealth, which will give 150 million middle class workers and their families up to $1000 tax cut which will consequently remove seven million senior citizens from tax payments.
3. A new health care plan which ensures quality and value insurance to every American who wants it and also to bring down premiums for every family who currently has coverage.
4. Raising the minimum wage and giving workers a free choice about joining labor unions. (Obama. 2008)

First presidential term from 2009-2013

In the beginning of 2009, “Congress approved Obama’s $787 billion economic stimulus package”. So basically what Obama did was he gave tax cuts, which benefited the citizens in America because there was less citizens unemployed. President Obama has been helping the United States economy by creating his policies. With the policies the President has created there has been a dramatic increase in jobs and unemployment has lowered. With Obama creating this plan he saved so many companies. Another policy that Obama created was the Health Care. On March 23rd, 2010 Obama passed the Affordable Care Act. With the Affordable Care Act there are many benefits but there are also some disadvantages. Some of the benefits of the health care is no one can get denied for coverage. So basically what this means is that if someone is in the worst condition an insurance policy cannot say that they will not accept him or her because of their conditions. And the best benefit of the Affordable Care Act is that it reduces the price of healthcare. The disadvantage to Affordable Care Act is that some citizens in America cannot afford buying the insurance so what happens to them is that they are forced to pay tax. Another policy that Obama created into law was the Dodd-Frank Wall Street Reform Act.

By the end of 2012, Obama was able to accomplish several of his ideas. Some things that President Obama was able to accomplish at the end of 2012 was bringing back some the troops from the War in Afghanistan. He was able to “tighten sanctions on Iran”. “In late 2011 and early 2012, coordinated with other major Western powers to impose sanctions aimed at Iran’s banks and with Japan, South Korea, and China to shift their oil purchases away from Iran”. (Paul, Ryan, & Siyu, 2012)

The presidential election in 2012

The elections of 2012 saw Pres. Barack Obama reclaiming his seat after pulling a lethargic American economy over the line. Although debates continued about the gains and losses of Obama’s administration yet no one could defy that he saw through the sinking ship of American economy and pulled it through the storm. On Nov. 6 2012 Obama won with 51.1% of the popular vote to 47.2% for his republican competitor Mitt Romney. A lot of money was spent by both of the candidates for the purpose of negative marketing on TV which resulted in a decreased public motivation and thus Obama received 4 million lesser votes than the previous elections. Both candidates came up with vague plans for future and thus no concrete or substantial planning was seen. Obama was also unclear on the future spending issues and the sluggish economy, both adhered to attacking the other side and considered it to be the successful strategy. One thing that was very clear was the unprecedented support of the minorities to Barack Obama. Hispanics (71%), Asians (73%), Unmarried women (67%), Gay men and lesbians (76%) and blacks (93%). Moreover, the youth also supported Barack Obama which proved to be a major point in the re-election of the first black president of United States. (Beckwith, 2016)

One of the noticeable and plausible things is this that America was in a downward economic spiral when Obama took over in 2008 and there was a rising unemployment of 800.00 a month but his aggressive approach which included General motors and Chrysler, forcing the banks to go through a sensible stress test and forcing them to raise capital against their European counterparts. All that during the time when America was at War and their foreign policy was extremely hardline, while Obama was continuing the war on terror initiated by George W. Bush and the drone attacks, one must appreciate the way he handles the situation while others believed that he followed the issues rather shaping them. The other achievements include Health reform which helped over 40m people but still some observers were not happy with Obama’s tax policy as he failed to execute the concept of capitalism in its true form, they say. At the end people could see that Obama has dragged America’s economy back from the brink of disaster and has made a decent fist of foreign policy. (The Economist, 2012).

Second presidential term from 2013-2017

Fiscal Cliff in January 2013

On January 2013, President Obama swore onto his second term of being president of United States. The main goal for President Obama’s second term was to “boosting the economy, tackling key environmental issues and reining in the nation’s growing debt”. On the President’s agenda there are five key terms that he wants to achieve and fix before he leaves office and they include “gun control, immigration reform, climate change, jobs and debt reduction”.

Gun control is becoming a huge problem in the United States. There has been numerous schools shooting which is making environment unsafe. Obama was influenced in fixing this problem because of the Sandy Hook incident. In 2012, there was a massive school shooting at an elementary school, there were so many children that died and injured from the shooting. In January 2013, President Obama was on the radio and stated "While we may not be able to prevent every senseless act of violence in this country, if there is even one thing we can do to reduce it – if even one life can be saved – we’ve got an obligation to try”.

The second issue that President Obama is trying to fix is the immigration reform. Obama attempted to do something about the immigration reform during his first term but Congress was not convinced. Obama is trying to achieve with the immigration reform is to allow the immigrants that have already came into America stay if they have “ clear background checks, learn English and pay taxes”. So far there has been over eleven million immigrants that have came into America. Some argue that those immigrants that came into America are taking away jobs that American citizens could have rather than the immigrants.

The third issue that President Obama wants to work on is climate change. “He promised to meet with scientists, engineers and elected officials to begin a national discussion about how to address global warming”.

The next issue that President Obama wants o work on is jobs in America. Once Obama won the election, this was one of the first issues that he talked about. "I’ve got one mandate. I’ve got a mandate to help middle-class families and families that are working hard to get into the middle class”. Since most Americans are middle class, there were a great percentage of people that were happy with him winning.

The last issue is debt reduction. America was and still recovering from debt. “Obama and Congress barely managed to avoid sending the nation hurtling over the so-called fiscal cliff, which would have triggered deep spending cuts known as sequestration, beginning in 2013”. Basically the fiscal cliff is a deal that will lower taxes for the middle class citizens. The fiscal cliff affects every one in the United States, wealthy, middle class and poor. “Obama has called for tax reform measures such as restricting tax deductions for wealthier Americans and closing tax loopholes but has expressed opposition to spending cuts that would hurt middle-class households, senior citizens or families who have disabled children”. (Murse, about.com, n.d.)

US Government Shutdown in 2013

On October 1st, 2013, Obama gave a speech about the government shutdown and also included information about the health-care that was about to take-off. “At midnight last night, for the first time in 17 years Republicans in Congress chose to shut down the federal government”. President Obama in the beginning of the speech mentioned how long it took since the last government shut down. Obama then continued on blaming the Congress for the shut down. President Obama blamed the Republicans in the House of Representatives for refusing the Affordable Care Act. In his speech Obama made it clear that he did not want the government to shut down. “We know that the last time Republicans shut down the government in 1996, it hurt our economy. And unlike 1996, our economy's still recovering from the worst recession in generations”. Obama did not want the government to shutdown because he knew that it would worsen the economy, affect jobs and families of American citizens. (Washington Post Staff, 2013)

Mid Term election in 2014

Abbildung in dieser Leseprobe nicht enthalten

(The Associated Press, 2012)

Analysis

- The map shows that the Republicans got control of the U.S. Senate.
- The Republicans also got control of the U.S. House. The House of Representatives in the United States holds 435 people and the Republicans took 247 seats.
- The Democrats ended up giving up 19 seats.

With the results of the 2014 general election, the Republicans took control of both houses.

Year 2015

There are so many economic policies that came out in 2015 in the United States. “The Office of Economic Policy is responsible for analyzing and reporting on current and prospective economic developments in the U.S. and world economies and assisting in the determination of appropriate economic policies” (U.S Department of the Treasury, 2015).

Some of the economic policies that came out in 2015 in the United States include:

Terrorism Risk Insurance Program Reauthorization Act of 2015. This act got signed in January 12th, 2015.

Another economic policy that got signed in 2015 is Medicare Access and CHIP Reauthorization Act on April 16th.

On May 22nd, 2015 President Obama signed the Iran Nuclear Agreement Review Act.

On the same day United States passed the Don’t Tax Our Fallen Public Safety Heroes Act and Workforce Innovation and Opportunity Act Technical Amendments Act.

President Obama’s goal for 2015 is to make sure that any citizen that wants to work can be employed. (whitehouse.gov, 2015)

US Industrial sector overview

Being home to 13 Auto Manufacturers, United States surely is the largest automotive market in the whole world. From 2008-2012, a production capacity of 8 million passenger vehicles annually was shown. Honda was the first one to enter the US markets in 1982 and after that Europeans, Korean, and Japanese automakers came to the US markets and have established at least one production plant there. General motors, Ford, and Chrysler are considered as the Big Three of the US automotive industry. Besides the big three, Toyota, Hyundai-Kai, Mercedes-Benz, Mazda, and Subaru all have manufacturing facilities in US. The automotive industry offered jobs to 786,000 people at the end of 2014. There is also a big network of auto parts suppliers which serve the industry. Suppliers produced 225.2 billion dollars in the shipments that came to US shores which accounts for the 4 percent of total US manufacturing. Moreover, automotive industry provides a large potential for jobs directly and indirectly nationwide which estimated to about 3.62 million jobs directly. With the opportunities of the 21st century coming up which include fuel efficient, hybrid, and electric cars, the US automotive industry has a cutting edge innovative and technological ability to reap benefits from all the changing trends in the automobile industry. With a large chunk of exports reaching up to 2.6 million vehicles valued at $63 billion, US automobile industry exports to more than 200 countries in the world. The major factor adding to the US automotive industry’s success is the fact that it offers an open investment policy, a large consumer market, highly productive and skilled workforce, and government incentives, US is the premiere place for the auto industry. (Selectusa.commerce.gov, 2016)

Industrial sector SLEPT

SLEPT stands for social, legal, economic, political, and technological impacts on businesses. “Social factors relate to pattern of behaviour, tastes, and lifestyles” (Business Case Studies, n.d.). Some main points are the change in age that is affecting the social factor . Legal factors include the laws that get passed. An example would be the Affordable Care Act. This would be an example of the legal factor because it is providing health protection for the citizens of the United States. The Economic change would include how the economy reacts to the laws and regulations that pass. For example, are the businesses growing and profiting from the laws that pass. Going back to the Affordable Care Act, it was created to benefit the United States. The hospitals, urgent cares and other medical places in the United States do benefit from them because more people are willing to go and get a medical check-up. The political factor is how the government is involved and legal alterations. The changes in technology have been “particularly significant”. Since this is the generation of technology, information can be distributed very quickly. The U.S. industries are definitely inclined by the SLEPT elements especially the Ford dealership. Ford uses the social factor by increasing the popularity of the car so there is a higher demand for the car and it can increase the sales of their automobiles. Ford was in the process of going through a process of getting bankrupt, which would have affected the company and the United States economy. Obama went to Detroit to celebrate the company and their improvement. In the Detroit News, Michael Martinez quoted Obama saying, “We are entering the new year with confidence America is coming back” (Martinez, 2015). This would have contributed to the legal factor of SLEPT. The legal factor it would have contributed would have been going through a bankruptcy and having to deal with all the legal paper works. Another reason why is contributed to the legal aspect is because the company creating tight rules and regulation for the company such as the materials used in creating the automobile so that it can be the safest for the customers. Ford dealership contributed into the economic factor of SLEPT by creating reasonable prices for the American citizens so that they are able to buy the automobile. In the article Martinez also stated, “Helping to drive the country’s economic gains are America’s status as the No.1 producer of oil and gas, Obama said. It has resulted in the price of gas at the pump being $1.10 a gallon lower than it was a year ago, and the fuel-efficient cars made by Ford Wayne factory help drivers go farther, he said” (Martinez, 2015). The political factor in SLEPT that Ford dealership contributes to is Ford is motivated to create the best cars and commercial to compete with other American and European car dealership. Ford wants to be the best American car dealership and even though they almost went bankrupt, Ford is doing everything they can to create the best cars. Creating the best cars leads into the technological factor of SLEPT. Ford is using the best and most modern products and technology to create their automobiles. (Martinez, 2015)

(Bureau of Labor Statistic, 2015)

The graph is from the Bureau of Labour Statistics. This is a graph showing the unemployment rate in the United States from the age of sixteen. As you can see in the graph between the years 2009 and 2010 the unemployment rate was very high. It gradually reduced because more people in America got employed. This would connect to Ford dealership because with Ford having to create cars and creating the most modern cars it required them to hire more people. According to the Detroit News, Martinez stated that there were 5,100 employees working while President Obama came for the tour. With Obama visiting the Ford`s dealership it is showing that President Obama has been successful to bolster the economy and businesses in America. (Martinez, 2015)

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Details

Pages
21
Year
2016
ISBN (eBook)
9783668496576
ISBN (Book)
9783668496583
File size
597 KB
Language
English
Catalog Number
v371272
Institution / College
Manchester Metropolitan University Business School
Grade
2,3
Tags
economic policies obama administration assessment

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Title: The Economic Policies of the 2009-2015 Obama Administration. An Assessment