President Barack Obama won 2008 presidential election, in United States, on the promise of hope and change. He vowed to change the way business is done in broken Washington. He pledged to bring troops home, raise and stabilize the middle, and fight special interest. He inherited two wars, great recession, Al-Qaeda networks threatening U.S. security, piling up debt and deficits and gap between rich and poor widening continuously and consistently. World leader in automotive industry, since the invention of automobiles, was losing it’s leadership, in that industry, too. Over all trade deficit, specially, with countries like China was growing. One time leader in healthcare and education, was being ranked at the bottom of developed countries, in both, education and healthcare. Manufacturing jobs were being routinely exported to other countries. U.S. investment in research and development was dropping. U.S. share in new and high value inventions and patents was declining. Nation was seriously demoralized by worst performance, in U.S. history, from Bush administration.
Most critics, pundits, and economic and financial experts were predicting a double dip recession or even a depression. Some were even saying that unemployment will ultimately hit 20% and U.S. may be on the verge of civil war or civil disobedience movement. Pessimism about future was common and many were openly saying that the days of U.S. greatness and leadership were over.
This is where Barack Obama picked it up. His message was powerful and appealing, specially to young college students. He made a hard blow on their pessimism and declared that United States of America is and will always be the greatest country in the world. He said that we have the smartest and most intelligent, and most creative and innovative citizens. Our unique spirit of entrepreneurship is still alive. We can still rise from this moment and build back the broken system and economy. He also said that the new, competitive system can only be built on a strong middle class, as it was before, and by caring for poor and unfortunate. He promised drastic reforms in healthcare and education and rebuilt our trust in research and development, and entrepreneurship.
His message re-invigorated millions of young and old, rich and poor, sick and healthy, black and white, religious and non-religious, across the country. His message was loud and clear. We must cut the influence of special interest in Washington and go back the days in which everyone gets a fair shot and equal opportunities. Whether it is business, jobs, education, healthcare or taxes, everyone should and must have an equal access and share.
Economy being obviously rated as the number one concern for Americans, he had to take on economy first. Although, his approach was very different from his counterparts. After all, that is why he was elected. His way of doing business, in this regard, has been, economy is not just cut deficit, cut taxes and small government. Although, these are very important components of any good and workable economy re-building plan, there are other seriously broken aspects of economy that need to be fixed, right away.
Different people blame different people, institutions and factors for 2007-2008 great recession. But, it is very clear that Wall Street played a very destructive role in this crisis. Dodd-Frank bill is very important step in stopping and blocking the unfair and criminal practices on Wall Street. This bill, which is now a law, in out=r country, is going to increase the cost of doing business on Wall Street, on one hand. But, on the other hand it is very likely to prevent the crises like the ones that have been consistently happening, starting from Reagan, since Republicans started repealing the checks and balances put in place by Franklin D. Roosevelt and which kept the markets recession and crisis proof for about forty years. The cost of these crises and recessions is far more then the increase in cost of business that this new law is going to cause. These are difficult decisions and you always have to balance the rights of American people with the rights of American businesses. Unfortunately, most Republican leaders have no regard for the rights of people and they are getting paid by rich and powerful corporate lobbies to protect only the rights of businesses and to totally disregard the rights of American people. That is why Republicans are so against this bill and every major Republican presidential candidate is vowing to repeal it.
Recessions also have a lot to do with the ability of consumer to spend. If because of the factors like unemployment, stagnant wages, inflation, money devaluation and disproportionate expenses in certain necessities like healthcare, the consumer spending is reduced, then, it is very important for any economy revival plan to rebuild the consumer buying power. This, of course, is done by taking measures to create jobs. Specially, during recessions, because the economic environment is so uncertain, businesses and individuals are reluctant to invest. For example, right now, U.S. corporations are sitting on over two trillion dollars of hard, cold cash. But, the private business investments are still very low. Under these circumstances, governments have to make very tough decisions. In an economy already badly hurt by recession, and debt and deficits piling up, government has make investments in infra-structure and public works, just to stimulate economy and get it going. Roosevelt did it very successfully during great depression and re-built the economy that doubled it’s GDP, twice in next few decades. Investments in public works and infra-structure increase inflation, devalue money and increase the deficits and debt. But, they help greatly in rebuilding the buying power of consumer by creating jobs. Once people are buying again and prospects for private ventures are improved, capital starts flowing back into the markets, creating more jobs, raising the standards of living and gets the economy going, again. These ideas are commonly known as Keynesian theories and are widely hated and rejected by conservatives. They think that big corporations, which are sitting on two trillion dollars of cash, right now and still making no significant investments in economy, can revive it, all by themselves.
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