Barack Obama did too little to support the US economy and citizens after the 2008 financial crisis. Joe Biden tries to do better – and succeeds.
Granted, Joe Biden is not an easy task at the moment. In the middle of the most significant economic and health crisis in decades, the not so young 78-year-old takes over a country in which millions of crisis-ridden people struggle for social survival. But the new president, who will celebrate his 100th anniversary in office on Thursday, has set a good pace in combating the various crises.
A two trillion dollar aid package that has already been passed is intended to cushion the social hardships of the Covid pandemic; the next step is a large infrastructure package, which should also include around two trillion dollars. Biden, it seems, doesn’t want to waste time getting the country back on the road to success. There may be a simple reason for his determination. He has learned from the mistakes of his predecessor and former boss Barack Obama.
Obama also took over the country during a severe economic crisis. A few weeks before the 2008 presidential election, the investment bank Lehman Brothers went bankrupt. After the breakdown of the theoretical air pocket in the housing market, the country threatened to sink into a severe recession.
But Obama decided in December – more than a month before his inauguration – to propose only a tiny aid package of fewer than 800 billion dollars to Congress. The result: the economy recovered only slowly, unemployment remained high for years, and millions of homeowners lost their homes. Many citizens are still feeling the after-effects of the last financial crisis today.
How did Obama fail? These are questions that still concern those who were there back then—for example, Reed Hundt. In 2008/2009, he was a member of Obama’s “Transition Team”, which organized the transition from the Bush presidency to Obama’s inauguration.
In his book A Wasted Crisis, the now 73-year-old, after discussions with numerous former members of the transition team, followed the discussions on the aid package in minute detail and paints a gloomy picture of a political environment in which false prognoses, austerity dogmas and hasty decisions are the basis for formed a long-running recession, which in turn provided a basis for the rise of Donald Trump.