As mentioned in the first edition* of this column, the inauguration ceremony of former President Obama was held in January 2009. At that time the US was facing a serious financial crisis, the situation in both the market and the economy was as frigid as the weather on inauguration day. A crowd of approximately 1.8 million people attended, the highest ever recorded at an inauguration ceremony, evidence of an expectation that the revitalization of the US was being staked on President Obama.
The Obama administration fulfilled those expectations to some extent. With economic and monetary stabilization measures by the administration and super-quantitative easing by the FRB, the stock market prices, which had been plunging, bottomed out in the spring of 2009, and the economy started on a recovery trend a few months later. The economic expansion that began then is still continuing today. The Obama administration and the FRB should be receiving greater recognition for achieving even a moderate economic recovery for the US economy that was facing the fear of a second Great Depression.
Nevertheless, it is significant that the evaluation by voters was not so high. This economic recovery has mainly benefited corporations and those in the high-income brackets, while the majority of American citizens in the middle-income brackets or lower have been unable to feel any sense of recovery. For the Obama administration and the Democratic Party, the political costs were enormous, leading to a series of poor results in congressional elections and a defeat in the presidential election in 2016.
The policy of continuing super monetary easing and encouraging the leveraging of asset prices was an appropriate response to the serious financial crisis at that time. In fact, it was probably the only option. The miscalculation of the previous administration was that these measures did not have a ripple effect to a wide range of sectors or lead to an acceleration of economic expansion, with corporate management becoming more conservative, and a widening gap between household income levels. The recovery of employment was also slow, with the unemployment rate remaining high at around 8% just prior to the presidential election in 2012. It would not have been surprising if this had prevented Mr. Obama from being re-elected.
The first edition is not posted on the corporate website.