Hazar Raporu - Issue 02 - Winter 2012

Obama’s Challenge With Economy
Yrd. Doç. Dr. Fatih Macit
Suleyman Shah University Director of Economy Department
Obama continued the tradition as his
predecessors and gained the right to
govern the United States for another four
year term. American presidents generally
find it difficult to apply the policies that
they really believe to be true as they always
have a concern about whether they are
going to be selected in the next term.
This tendency becomes more obvious
if these policies have adverse short-run
effects even though they are beneficial in
12,0
10,0
8,0
6,0
4,0
2,0
0,0
Uenmployment Rate
2007-01
2007-04
2007-07
2007-10
2008-01
2008-04
2008-07
2008-10
2009-01
2009-04
2009-07
2009-10
2010-01
2010-04
2010-07
2010-10
2011-01
2011-04
2011-07
2011-10
2012-01
2012-04
2012-07
2012-10
the long-run. As Obama does not have a
chance now to be selected again we might
expect that he will put bold steps about
some structural problems.
It seems that Obama’s biggest challenge
will be with US economy in his second
term. When he was first elected in
November 2008, US economy has already
been suffering from the financial crisis
that emerged from problematic mortgage
loans. The unemployment rate was at
5% at the beginning of 2008 and it was at
7.3% by the end of the year. The increase
in the unemployment rate continued until
October 2009 and it reached to doubledigit
levels. Therefore,
the economic crisis was
already on the table
before Obama came to
administration and the
general idea in people’s
mind was that Obama
was not responsible for
the economic crisis. On
the contrary, people
believed that Obama
applied the right policies
to get the economy
out of recession and this has been an
important factor in the election of Obama
for a second term. In fact, both the fiscal
policy adopted by Obama administration
122 120