The Great Recession of 2007–2008 was a massive economic crisis that revealed how flawed some of the concepts behind U.S. economic policies were, particularly the idea that free markets and less government intervention would always succeed.
When Barack Obama took office as president in 2009, his reaction to the crisis was inconsistent. At times he employed the old methods that had succeeded previously, while at other times he experimented with new approaches.
On one hand, he operated within the system by attempting to soothe the crisis. He pushed through a huge bailout package called TARP to bail out the banks and appointed economic advisors who were part of President Clinton’s team. He also authorized a $787 billion stimulus plan to get the economy going again, but the majority of the experts felt that it was not enough since his first proposal was worth $2 trillion.
On the other hand, Obama did try to implement some reforms. He pushed through the Affordable Care Act (also known as Obamacare) and signed a bill called the Dodd-Frank Act to prevent another financial crisis. The problem is that the real problems remained unresolved because the markets did recover but inequalities grew and the wages stayed the same.
During the crisis, institutions like the U.S. Treasury and the Federal Reserve (which do not report to elected politicians) played a monumental role. They became the biggest decision-makers. They cut interest rates and bailed banks… Their actions prevented a big collapse, but it left behind some big questions: Why should un-elected people be so powerful in the economy? The answer is that they’re there to be the experts and away from politics in order to make rational and data driven decisions.
Critics say Obama’s team ended up helping Wall Street more than regular people. And even though the Federal Reserve and the Treasury handlled the situation well, it worries the American public that so much power is layed in the hands of a few unelected indiviudals who make important decisions without consulting the people.
Will Wright 