Just over 18 months ago, Barack Obama became the first African-American man to be sworn in as president of the US, after having won the Democratic party’s nomination in June 2008 and then having convincingly defeated his Republican opponent, John McCain, in the November elections.
In the early months of his presidency, Obama’s approval rating in the Gallup polls was well above 60 per cent (65 per cent in May 2009). Since then it has dropped steadily, to 46 per cent by July 2010. Interestingly, the ratings among African Americans has held up close to 90 per cent throughout the past 18 months, while among Hispanics it has dropped by 20 percentage points and among whites by an even larger 24 points, from 62 per cent in January 2009 to 38 per cent in July 2010.
With the Congressional mid-term elections barely two months away, a number of Democratic legislators are fighting shy of presidential visits to their districts, an astonishing reversal from the situation in the immediate aftermath of Obama’s election.
Does this remarkable slide in the polls reflect an objective assessment of Obama’s performance in his year and a half as president? Perhaps not. Let us consider a summary (and inevitably selective) assessment of his achievements and failures during this short period.
Obama inherited a mess, including the biggest financial crisis since 1930 and a consequent big recession with risks of snowballing into a serious economic Depression, the Iraq and Afghan wars, difficult relations with adversaries (such as Russia, Iran and North Korea) and allies (such as Europe and Pakistan), a growing fiscal deficit and long-term challenges in energy policy and climate change.
On the domestic front, his administration grasped quickly the enormity of the economic and financial dangers and pushed through the $800bn economic stimulus embedded in the American Recovery and Reconstruction Act of February 2009. It followed up vigorously on the Bush administration’s Troubled Assets Recovery Programme, launched the “cash for clunkers” programme to stimulate automobile demand, oversaw a tough bail-out of General Motors and Chrysler, undertook stress tests of banks and encouraged the Federal Reserve to buy mortgage-backed securities to lower interest rates. Alan Blinder of Princeton and Mark Zandi of Moody’s have recently estimated that these policies saved more than 8m jobs and contained the gross domestic product decline in 2009 to 2.4 per cent instead of a big, depression-type 7.4 per cent drop.
To reduce the risks of financial sector excess, Obama mounted the most sweeping programme of reform of regulatory structures, rules and practices in banking and finance since the 1930s, signing the Dodd-Frank Wall Street Reform and Consumer Protection Act in July 2010. Although the law is far from perfect, it constitutes the most important and systemic reform of US financial sector regulations in 80 years.
In the realm of social policy, Obama achieved the greatest reform of the US health care sector since Lyndon Johnson’s “Great Society”. The legislative battle was prolonged, divisive and damaging. But finally, after Senate opponents of the House Bill were able to knock out the “public option” clause (a serious compromise from Obama’s standpoint), the Patient Care and Protection Act became law in March 2010, extending health insurance to millions of uninsured people and setting restraints on abuse of the system by entrenched interests.
The two biggest policy disappointments have been the persistence of high unemployment (despite a substantial recovery in GDP) and the administration’s recent retreat from its “cap and trade” legislative proposals on carbon to mitigate the cumulating, global climate change crisis.
The first has been worsened by fierce Republican opposition to further stimulus measures as well as negative external factors such as China’s unflinching policy of exchange rate undervaluation and the European sovereign debt crisis. The second has fallen victim to a potent combination of Republican opposition and the oil and coal industry lobbies.
In foreign policy, Obama has greatly improved the tone of America’s external relations throughout the world. The three biggest achievements have been the new Strategic Arms Limitation Treaty with Russia (awaiting Senate approval) to reduce nuclear stockpiles, the phasing out of the US combat role in Iraq and a demonstrated commitment to multilateral approaches to solving international issues. The last has been exemplified by Obama’s involvement in G20 summit proceedings and the elevation of the G20 as the primary locus for dealing with international economic and financial issues.
The biggest failure to date has been the quagmire prospects of the war in Afghanistan, despite the “surge” in troop commitments. Arguably, this failure (if that is what it finally turns out to be) is mainly because the early stages of the Afghan war, prosecuted by the Bush-Cheney-Rumsfeld leadership, were seriously mishandled and neglected thanks to the diversion of US political and military focus and assets to the utterly unwise and destructive “war of choice” in Iraq.
Nor has Obama succeeded in making serious progress with the hardy perennials of international trouble spots, including Israel-Palestine, North Korea, Pakistan as a global terror centre and Iran’s nuclear ambitions. On the first, Obama has displayed commendable courage in pursuing the (theoretically) long-agreed two-state solution with tough diplomacy, despite the exceptionally powerful Israeli lobby. But his efforts appear to have been successfully blocked by the intransigent Netanyahu government in Israel. On the third, WikiLeaks provided detailed information on Pakistani support to militants fighting US and coalition forces in Afghanistan, while at the same time the Pakistan government received massive military and non-miltary assistance from the US.
Despite this, on balance, this is a pretty impressive 18-month record. Then why the inexorable slide in approval ratings? Among the answers to this puzzling question must surely be: the sheer scale and complexity of the domestic and international problems Obama inherited; the unrealistic expectations generated by his election campaign; the politically toxic consequences of persistent high unemployment; the extraordinarily partisan and hostile behaviour of the Republican opposition, including some of its tendentious and scare-mongering media. And, possibly, as the Gallup trends suggest, racism may still be a powerful under-current in American society, which doesn’t cut much slack to America’s first African-American President.
The writer was chief economic adviser to the Indian government for eight years up to 2001. His latest book is “India’s Economy: Performance and Challenges” (co-edited, 2010). This piece appeared earlier in Business Standard.
