The economic downturn that shook the nation nearly eight years go has had its influence on everyone. Just as any other community in the US, Indian Americans, a mostly affluent Immigrant community in the US, has been affected by the recession that hit the economy as well as by the recovery that is underway today.
Eight years after one of the largest the financial crisis America has ever faced, today, unemployment is at 5 percent, the country’s deficits are down and G.D.P. is growing. However, a majority of Americans feel left behind, writes Andrew Ross Sorkin, a financial columnist for The New York Times, founder and editor at large of DealBook and co-anchor of CNBC’s “Squawk Box.”
When Obama took office in early 2009, the U.S. economy was losing 800,000 jobs a month and the Dow was under 7,000. Today, the unemployment is 5 percent, the deficit is under 3 percent, AIG, the world’s biggest insurance company, has turned profitable and the government made all the money back on the banks.
Andrew Ross Sorkin draws to the impact of Obama policy in the past seven years. Overall, the U.S. economy is in much better shape than the public appreciates, especially when measured against the depths of the financial crisis and the possibility — now rarely even considered — that things could have been much, much worse. The economy has certainly come further than most people recognize. The private sector has added jobs for 73 consecutive months — some 14.4 million new jobs in all — the longest period of sustained job growth on record. Unemployment, which peaked at 10 percent the year Obama took office, the highest it had been since 1983, under Ronald Reagan, is now 5 percent, lower than when Reagan left office. The budget deficit has fallen by roughly $1 trillion during his two terms. The U.S. economic growth has significantly outpaced that of every other advanced nation.
In spite of all the progress in the past few years under Obama, Andrew Ross Sorkin says, despite the gains of the past seven years, many Americans have been left behind. A large swath of the nation has dropped out of the labor force completely, and the reality for the average American family is that its household income is $4,000 less than it was when Bill Clinton left office.
Economic inequality, meanwhile, has only grown worse, with the top 1 percent of American households taking in more than half of the recent gains in income growth. “Millions and millions and millions and millions of people look at that pretty picture of America he painted and they cannot find themselves in it to save their lives,” Bill Clinton himself said of Obama’s economy in March. “People are upset, frankly; they’re anxiety-ridden, they’re disoriented, because they don’t see themselves in that picture.”
Kenneth Rogoff, a Harvard economics professor and co-author of “This Time Is Different,” a well-regarded history of financial crises, said, “We had a systemic financial crisis since World War II. I mean this was like nothing we’ve experienced since World War II. The 1982 Volcker recession was nothing compared to this, and so you have to look at the nature of the shock.”
Charles Homans, the politics editor for the New York Times magazine, says, on one end of the “middle class” spectrum is a dream inexorably receding from view; on the other is a pair of socioeconomic blinders obscuring the harsher economic realities of those further down the scale. Summarizing today’s economy, Hillary Clinton, the Democratic Party’s presumptive nominee, said, “Many are still barely getting by,” while Donald Trump said that “we’re a third-world nation.”
Richard V. Reeves, a scholar at the Brookings Institution, argues that the most significant dividing line in recent American experience isn’t between the 99 percent and the 1 percent, but between the 80 percent and the 20 percent — a group that includes not just the very rich but also people most Americans would identify as upper middle class. The top 20 percent saw its average real household income rise to $185,000 in 2013 from about $109,000 a year in 1967. The middle 40 percent saw their real incomes rise, too, but to only $68,000 from $52,000 — the equivalent of a $348-a-year raise. The top 20 percent is also more likely than the middle 40 percent to believe that hard work gets you ahead in life.
According to a Brookings study released last year, men and women with bachelor’s degrees earned a median of 7 percent and 16 percent more in 2013 than they did in 1990. Women who either didn’t attend college or attended but didn’t graduate made just 3 percent more — up to a meager $29,500 — and those men made 13 percent less: a median of $40,700 a year, down from $47,100 a year.
President Barack Obama, recalling his efforts to rebuild the U.S. economy from the 2008 financial crisis, in spite of the criticisms and non-cooperation from the left, right and center, laments that his efforts were vastly underappreciated. “If you ask the average person on the streets, ‘Have deficits gone down or up under Obama?’ probably 70 percent would say they’ve gone up,” Obama said, with some justifiable exasperation — the deficit has in fact declined (by roughly three-quarters) since he took office, and polls do show that a large majority of Americans believe the opposite.
“I actually compare our economic performance to how, historically, countries that have wrenching financial crises perform,” he said. “By that measure, we probably managed this better than any large economy on Earth in modern history.” Obama said, “Anybody who says we are not absolutely better off today than we were just seven years ago, they’re not leveling with you. They’re not telling the truth.”