The 2012 presidential race is entering its final stretch and the economy remains the key issue both for the candidates and for voters. The question of whether Americans are better off than they were four years ago remains a critical benchmark as the election nears. The data leave no doubt, however, that Americans are better off now than we were in the fall of 2008.
Over the past four years, aggressive actions taken by the federal government—including the economic stimulus package and the rescue of the auto industry—succeeded in turning our economy around and putting our nation back on the right economic path. More work is clearly necessary to strengthen the current economic recovery and accelerate much-needed job gains, but the economy is undoubtedly on the right track and remarkably robust in the face of tremendous obstacles—among them the lingering European financial crisis, slowing growth in China, high oil prices, and continued massive household debt levels.
Four years ago, in the final year of then-President George W. Bush’s second term in office, the consequences of conservative top-down economic policies became all too obvious, bringing the country to the brink of another Great Depression. The financial crisis sparked by rising home mortgage foreclosures in 2006 gained speed in 2007 and morphed into a serious recession in 2008 that gained downward speed by the day:
- Mortgage foreclosures mounted swiftly
- Job losses accelerated rapidly
- Economic growth reversed course
- Manufacturing production shrank quickly
- Corporate profits fell precipitously
- The stock market dropped rapidly
- Household wealth declined sharply
In short, our economy and financial markets went into a tailspin in the second half of 2008 due to the consequences of conservative economic policies aggressively implemented by the Bush administration.
Compare this to the economic situation today:
- The U.S. economy has added jobs for 31 consecutive months
- The economy has been growing since June 2009
- Manufacturing has been on the upswing
- Corporate profits have risen sharply
- The stock market has added healthy gains
- Foreclosures are finally falling
- Household wealth is continuing to expand
Instead of a second Great Depression, the actions of President Barack Obama’s administration resulted in our economy exiting what became known as the Great Recession of 2007–2009 within the first six months of his term.
Christian E. Weller is a Senior Fellow at the Center for American Progress, and a professor in the department of public policy and public affairs at the University of Massachusetts Boston.