It is easy to forget what an economic mess the democrats walked into just two years ago. If nothing else Tuesday night was a reminder that even with near disasterous collapse brought on before the Democrats took charge Americans have no patience when their jobs are in jeopardy. In October of 2007 the Dow Jones was at 13930.01. From there it essentially fell at a consistently steep rate until February of 2009 (when it reached 7062.93). This is significant because this is when the democrats implemented their economic policy. Since that day the Dow Jones has steady risen to 11188.72. Our financial institutions were saved and they have paid back every penny borrowed in the Obama bailout (only money they did not return was from the Bush bailout since he did not require them to pay it back). GM was saved and has also paid back the money they were given in the bailout.
In February of 2008 the unemployment rate in this country was 4.8 %, before Obama even took office the unemployment rate had moved up to 8 percent. So in less than a year the unemployment rate had gone up 3.2%. The unemployment rate reached nearly 9% before Obama and the democrats passed their economic policy. The democrats economic policy slowed down the growth in unemployment SIGNIFICANTLY. And after bottoming out at 10.1 in October of 2009 the rate has slowly started to move back down towards 9.6%.
The ironic thing is that had the republican economic policies that caused this MASSIVE recession not been so disastrous the democrats probably would have done better in this election. As it is, though we have seen massive improvements in the trends for both the dow jones and unemployment from what the Democrats inherited, though Americans still are dealing with consequences of those inherited policies. It was always going to take more than two years for the economy to recover from the incredible plummet we saw (which did not slow down until Obama's economic policy was implemented).
Americans vote with their pocket books so often and since there has not been a strong recovery in jobs to match the strong recovery in the market they are not happy. Though the majority of the deficit has actually come from lessened tax revenue due to recession, Americans see the Democrats spending money on something like Health Care when so many are still unemployed at it rubs them the wrong way. Tonight was inevitable for the democrats and though I think if they were as good at talking points as republicans they could have done better the fact was there was no way the democrats could have taken an economy that had been plummeting in the year before they implemented their policies and created a complete recovery.
It's funny to listen to the Obama administration be called Partisan. From day one Obama came in and tried to work with republicans. Even gave them certain things they wanted with the stimulus and bailout packages...republican leadership originally was willing to work with him on some of it and John Boehner made the calculated political move to obstruct on everything and ordered republican leadership to follow suit. It worked in this election because though the dow jones has recovered incredibly well from the year and a half plummet it was on prior to the democrats taking action, jobs have not comeback yet and Americans vote with their wallets.
Anyone remember John Boehner crying on the house floor trying to get support for Bush's tarp bailout (which was poorly structured and didn't require anything to be paid back)? Well when the banks still looked on the verge of collapse and Obama tried to get republican support for tarp (this time structured in a way that required it to be paid back) Boehner chose obstruction. In the end the Banks recovered after tarp was passed and repaid the money to the federal government. It was good legislation. It probably saved the financial institutions of this country. And the republicans decided to play politics with it.
That playing politics paid off for the last year because it was going to take more than 2 years to recover from the disasterous economic plummet that came prior to the Obama administration taking over, but now they'll actually have to offer something. They'll actually have to be more than just obstructionist. In the end that's probably a blessing for the democrats (though loosing that many seats was not the ideal way for it to happen).
Listening to republicans talk jobs is almost comical. In the year before Obama implemented his economic policy unemployment rose for 4.8 % to 9%. Unemployment rose under Obama to just over 10 percent and right now unemployment sits at 9.6%...clearly Obama has slowed down the rate of unemployment decline and we have scene a slow trend towards rising employment. The republicans railed against the bailout of General Motors, but how many more jobs would have been lost had this company collapsed? Instead the democrats designed a plan that allowed General Motors to continue to function and they have already paid back the government for the bailout money. They saved American jobs and republicans were against saving those jobs.
In the end jobs lagged too far behind the overall economic recovery and the democrats suffered this year at the ballot. It is going to take a strong recovery of jobs to go along with the dow jones for the Democrats to hold serve next time around. They still have the Presidency, they still have the Senate. Health Care will not be repealed. Democrats will still set the agenda and they still have two years to show that their economic policies saved this country from a decline that could have been way worse. And this time they will have a republican party that will have to do far more than obstruct. When you have no power you can play the obstructionist. You can act like your plans are not getting out of committee, you can pretend the other side is not trying to work with you...now the republicans actually have to bring something to the table. In the end I think we'll see job recovery and I think Obama will be able to make the economic argument in two years that their policies lead to significant recovery. I think he'll hold the presidency and hold the senate. They may not be able to take back the house so quickly, but having an opposition party that has to actually try to govern too may not be such a bad thing.
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