Rating Obama's First 100 Days

It’s a bit like getting your first report card after just a week of school, but Barack Obama’s first 100 days in office obviously haven’t been the usual honeymoon period. When Obama became president in January, the economy had been in recession for 13 months, with no end in sight. Huge banks like Citigroup (C) were still foundering, despite the emergency resuscitation rendered during President Bush’s final months. Big companies were announcing four- and five-digit layoffs. The “D” word—depression—was in vogue.

It’s impossible to turn around the world’s biggest economy in 100 days, but Obama has clearly tried. Since January, his administration has put in place a vast economic-recovery program. The question now is whether it will work. Here’s an early assessment of how Obama has tackled the biggest problems facing the economy:

The housing bust. With so many problems these days, it’s easy to forget that the recession began with a massive plunge in housing values—which continues. And most economists feel the economy won’t rebound until housing prices bottom out and stabilize. So far, prices nationwide have fallen nearly 30 percent from their 2006 peak, with further declines likely through most of 2009.

Obama’s action plan: The $75 billion “Making Home Affordable” program to help qualified homeowners avoid foreclosure.

Effectiveness: Questionable. The Obama administration says the program could help three to five million homeowners avoid foreclosure, which in turn would help stop the plunge in real estate prices. But banks have to go along with the voluntary program, and so far it’s not clear that enough will. Meanwhile, foreclosure rates continue to rise.

How to tell when it’s getting better: When foreclosure rates stop rising and real estate values stop falling. Other indicators, such as occasional monthly increases in home sales, can be misleading, because those can reflect foreclosure fire sales rather than normal buying activity. Many potential buyers are waiting for prices to stop falling before committing to a purchase, and they’re the ones who will help the housing market become healthy again.

The bank rescue. The much-derided troubled assets relief program introduced by President Bush and his Treasury Secretary Henry Paulson has accomplished one important thing: It prevented an even worse financial panic than what happened after Lehman Brothers and AIG collapsed last September. Obama’s challenge has been to continue propping up some of the most troubled banks, like Citigroup and Bank of America (BAC), wind down AIG, and start nursing the financial sector bank to health.

Obama’s plan: While continuing TARP, Obama’s Treasury Secretary, Timothy Geithner, has also introduced the public-private investment partnership, PPIP, to start buying up to $1 trillion in “toxic assets” from the banks. Unwinding those money-losing securities is essential for the banks to write off their losses, return to profitability, and start lending normally again.

Effectiveness: Too early to tell. TARP has helped stabilize some banks, and a few may even start paying back the money they’ve gotten from the government. As for PPIP—designed to help the most troubled banks—it won’t get fully underway until early summer, and there’s no guarantee it will work, despite generous government subsidies.

How to tell when it’s getting better: When banks start paying back their bailout money, and the Treasury Dept. says no more banks will need a bailout. But it could get worse before that happens. And it’s still possible the government may have to completely take over a few big bank, which would be a clear sign that the PPIP didn’t work.

The credit crunch. When Wall Street cratered last fall, banks essentially stopped lending to businesses and consumers alike. They’ve eased up a bit since then, as the financial sector has slowly started to stabilize. But lending is still down sharply, partly because consumers are reluctant to spend and they’ve stopped asking for loans. Obama’s mission is to make the banks more comfortable taking reasonable risks, to help boost consumer spending and keep capital flowing to businesses

Obama’s plan: The $200 billion Capital Purchase Program—an offshoot of TARP—injects money directly into banks, so they’ll have more reserves against which they can lend. The Federal Reserve’s term-asset-backed lending facility—lovingly referred to as TALF—is a $200 billion effort to restart the secondary market for many kinds of loans, ultimately making more funding available to consumers.

Effectiveness: Moderate. These programs are less visible than the AIG or auto-company bailouts, but they seem to be helping. Borrowers with good credit, for example, now have an easier time getting loans.

How to tell when it’s getting better: A key sign of success will be the availability of loans, at reasonable rates, to people with fair or even subprime credit ratings. Many such borrowers still can’t get mortgages or car loans at any interest rate, which impedes normal economic activity. Many small businesses are shut out too, and desperate for capital in order to survive.

The stimulus plan. To counteract the cutback in consumer spending and jump-start the economy, Congress passed the $787 billion American Recovery and Reinvestment Act in February.

Obama’s plan: The biggest chunk of the money—about $288 billion – goes to tax cuts. Another $280 billion will go to states and municipalities to spend on infrastructure projects, Medicaid programs, and expanded unemployment benefits. Lesser amounts will go toward health care reform, green energy initiatives, and other projects.

Effectiveness: Too early to tell. The tax cuts might sound big, but they only amount to an extra $67 per month for the biggest beneficiaries. That’s a lot less than the average household income has fallen during the recession, and probably not enough to boost spending by much. The rest of the spending will take months or even years to filter into the economy. A recent Government Accounting Office report found that most states are off to a slow start in terms of applying for funds, with only about $50 billion due to be delegated by Sept. 30. The bulk of the funds won’t get spent until 2010, at the earliest.

How to tell if it’s working: When the economy stops shrinking and starts growing. GDP has fallen for three quarters in a row, and the International Monetary Fund predicts that overall the U.S. economy will shrink by 2.8 percent in 2009, and stagnate in 2010. Anything better than that probably represents success for Obama’s stimulus plan.

The auto bailout. General Motors (GM) and Chrysler had already received a combined $13.4 billion in federal aid when Obama took office. It was clear they’d be back for more, and sure enough, they asked for up to $25 billion more in February. Some economists have estimated that a total auto bailout could add up to $100 billion before it’s over.

Obama’s plan: On March 30, Obama and his automotive task force told both companies what they must do. Chrysler wouldn’t get any more aid unless it inked a rapid-fire merger, presumably with Italian automaker Fiat (FIATY.PK), by the end of April. GM has until the end of May to wrest major concessions from unions and creditors and present a convincing restructuring plan—or else face bankruptcy.

Effectiveness: Good. Obama’s auto-bailout plan is looking like one of his most decisive acts of governance so far. In contrast to the open-ended and often stealthy assistance given to banks, Obama has presented clear public guidelines to both GM and Chrysler—along with deadlines. In some respects the auto bailout is a good template for the way other bailouts ought to be handled.

How to tell if it’s working: With car sales down 40 percent, the domestic automakers are going to shrink, shed jobs, and lose customers no matter what. The ultimate test of whether the Obama’s tough love works is if the remaining companies—whether two or three—return to profitability by 2010 or 2011. With dealer inventories stuffed, meanwhile, consumers will continue to find good deals on most cars.

AIG. This mega-failure is a category unto itself, soaking up about $180 billion in government funding and other commitments so far.

Obama’s plan: Obama inherited this tar-baby, and there’s little to do but continue to support the dismantling of AIG, to unwind billions in risky derivative contracts that still threaten the global economy. If taxpayers are lucky, they may get their money back someday.

Effectiveness: Mixed. Obama and Geithner bungled AIG’s bonus controversy, unleashing a firestorm of outrage. But AIG is making slow progress selling assets and extracting itself from risky dealings with hundreds of companies.

How to tell if it’s working: Key developments will be the sale of AIG’s insurance divisions, auto-leasing business, and other valuable assets. If AIG hasn’t asked for any more government assistance by this time next year, consider that good news.

Unemployment. As the financial crisis bled into the “real economy,” it became inevitable that companies would start laying off workers and that unemployment would spike. And sure enough, over the last year, the unemployment rate has risen from 5 percent to 8.5 percent, with about 5 million jobs lost so far in the recession.

Obama’s plan: There’s no “jobs program” per se, but all of Obama’s recovery programs are aimed at improving the economy in general, so companies can stop firing and start hiring.

Effectiveness: Minimal so far. Even with the stimulus plan, which will help keep thousands of workers on the job, unemployment is like to rise well into 2010, probably peaking close to 10 percent. And it’s only expected to improve slowly after that, since companies that have slimmed down are often reluctant to hire aggressively until their profits improve.

How to tell if it’s getting better: The unemployment rate has been going up by about 0.4 percentage points per month. When that rate of increase starts to slow for a couple of months in a row, it will be an early sign that layoffs may be abating. Once the rate stabilizes, that may give workers a bit more confidence that the worst is past and their jobs are safer. That may be as good as the news gets, for awhile.

The federal deficit. It’s big. Really big. All of the bailouts and stimulus spending will add up to a federal deficit of about $1.7 trillion this year—more than three times the size of last year’s $459 billion deficit. By 2010, it should drift down to a mere $1.1 trillion, according to the Congressional Budget Office, but that’s still a staggering number. The picture gets a little better in the “out years,” but not much. Huge ongoing deficits could crowd out private investment and leave America in debt to much of the world, for decades.

Obama’s plan: So far, there isn’t much of one. In his February budget address to Congress, Obama pledged to cut $2 trillion in federal spending over 10 years. But so far he’s offered no specifics. Obama also recently told his Cabinet secretaries to find $100 million in spending they could cut this year. That’s right: "m" as in million, which is such a small portion of the federal budget that it barely registers as a distant decimal point.

Effectiveness: Poor.

How to tell when it’s getting better: When there are brutal, nasty spending battles in Washington. Cutting the deficit by a meaningful amount will require enormous cuts in popular programs, with lots of losers—and maybe some big tax hikes as well. It wouldn’t’ be surprising if Obama put this one off until his next 100 days—assuming he gets reelected in 2012.

Disclosure: no postions

Comments

[John D:]

He is rated high on my list - especially considering that given the state of the economy, the nation and the numerous areas in which he has been involved, he has managed to do a great job. There are not many right now that would like to be in his boots. He is obviously well respected about the globe, he is younger which allows him to have a whole different perspective of what needs to be done - right down to opening up to Cuba and breaking OLD trends!!

Apr 27 11:51 AM

[User 402922:]

I am very optimistic about the future of our country as a whole. I do think that another way to stimulate the ecomony is by allowing some credit card interest be allowed as an itemized deduction, which was in the past.

Apr 27 11:51 AM

[oliver waters:]

why does'nt the president extend unemployment pay?

Apr 27 12:05 PM

[Aloosekey:]

Considering the economic disaster handed to him by Dubya, I think Obama has done a good job. More pragmatic then liberal I think he will prove to be a very good president. It is refreshing to have a leader who can speak in complete sentences.

Apr 27 12:16 PM

[BjornM:]

Hmmmm, not particularly impressed with Obama. I know he has a difficult position to deal with, but lets face it, once we recover from this cyclical economic situation how are we going to deal with the HUGE level of expenditures we are making right now ?

Apr 27 12:29 PM

[Sabastian C...:]

Obama is a know nothing looting criminal. Anyone that thinks he has been doing a good job is a fool that doesn't understand reality.

The media sold this loser as a saviour, when in fact he is has never accomplished anything ever, is anti-America facist, and has made sure that a bad situation under Bush, who was also a criminal, was made worse.

Obama stands for nothing but everything un-natural and un-clean:

1. Gay marriage - against nature
2. Printing money - against nature
3. Illegal immigration amnesty - against reason
4. Goverment running banks - immoral
5. More war - just in case you good liberals didn't notice -stupid sheep
6. Free medical - provided by who? Run by who?
7. Free education - provided by who and controlled by who?
8. Criminals in his cabinet - but that's OK, because he is for the people, he is a good socialist

The list goes on, this guy stinks, they are looting the society, and the people think he is doing a good job. Hahahahaha. Idiots.

Librals embrace all that is wicked. I bet you guys think Castro did a good job too.

Sabastian Curry

Apr 27 12:32 PM

[butterflygo...:]

The stock market is surging?? Um, last I checked, the market is simply rebounding to 8000 after dropping to 6500 during Obama's first month in office. That's not growth in my book.

Apr 27 12:36 PM

[Sabastian C...:]

The Obama Song

Yes We Can
Throw Trillions of dollars into the wind
Yes We Can
Appoint Criminal Lobbists
Yes We Can
Force amnesty for illegals
Yes We Can
Remove Guns from Law Abiding Citizens
Yes We Can
Force productive people to pay their unfair share of taxes
Yes We Can
Hold up banners for the communist party
Yes We Can
Fly Mexican and other countries flags
Yes We Can
Hold up pictures of Che Guaverra
Yes We Can
Force healthcare without paying for it
Yes We Can
Get a free education on the taxpayers back
Yes We Can
Get free housing on the backs of those that played by the rules
Yes We Can
Go against nature and institute gay marriage
Yes We Can
Consume more than we produce
Yes We Can
Protest and destroy private property
Yes We Can
Have children and expect others to raise them
Yes We Can
Have free prescription drugs
Yes We Can
Have social security paid for by future generations
Yes We Can
Have children out of wedlock
Yes We Can
Have no skills but demand equal jobs
Yes We Can
Use all of the energy we want, but not produce enough
Yes We Can
Make excuses for radical Muslims
Yes We Can
Take the side of our enemy
Yes We Can
Demand reparations for those that were never slaves from those that never owned them
Yes We Can
Have a bilingual nation - a tower of Babel
Yes We Can
Tear down the border
Yes We Can
Side with killers and leftist radicals
Yes We Can
Prosecute the police, and stand with gangs
Yes We Can
Tear down crosses, mock Christianity, and hate morals
Yes We Can
Demand the unearned for the undeserved
Yes We Can
Erect Socialism, forgeting that its kind killed 150 million people last century
Yes We Can
Hate America, the country that is the beacon of light and freedom to the world

And, Yes we can, with nothing but our great numbers
Plunder, loot, and bankrupt what is left of America
YES WE CAN

Apr 27 12:37 PM

[dinobot2001:]

Obama has uncanny ability to complicate things that are very simple to understand and tackle
1. AIG is too big to fail but he hasn't broken it up into small pieces
2. Banks are taking very high risk. But he hasn't passed laws to break these banks up and limit risk taking to non banking arms
3. The credit card rates are high but he wouldn't set national lending rates using the same credit score matrix rates banks use
4. He keeps coming up with plans to get rid of toxic financial instruments from banks and spread the loss on to millions of Americans so he can say I solved the problem and That I say is indirect taxation and cronyism.
5. for crying out loud set a national mortgage rate range.
Eloquence comes from repeatedly speaking in front of crowds including class rooms he has proved he is good at that.
Saying things that people want to hear comes from political speech writers and he has proved he has a good one.
Being a visionary comes from watching a lot of people suffer and he has proved he has seen ample from his organizing days
WHAT HE LACKS IS CONVICTION AND RAZOR SHARP FOCUS IN CONTAINING AND SOLVING PROBLEMS.
He is proving to be a person who tells you how to build a clock when you ask him for time.
This I think comes from being a professor for too long.
Bernanke must resign. Banks should only be Banks. AIG should be broken up. National mortgage rate range should be set by Treasury linking it to 30 yr Bond rates.
He will also fall like all the other Presidents and fall big for he is proving to be two-faced

Apr 27 01:06 PM

[Justice Kinky:]

First off, rating Obama is pointless. The cosmetic job the media is doing 24/7 is going to keep the man afloat no matter what he does. I do believe he could very well sell the nation out from under us and we'd cheer him on...oh wait...he's doing just that and we're doing just that...never underestimate the massive intellectual power of we the people.

Even so, I'd give this administration a big "A" for

(a) Moving wealth out of the country fast

(b) Making big banks "special" (openly) as we always knew they were

(c) Bringing gold out from under everyone's underwear and getting them to sell it at "gold parties" for far less than value. (hey, who needs some FDR type Executive Order malaise when people are willing to gold party their gold into oblivion voluntarily)

(d) Panic and scare-mongering by drying up credit (always a good way to get people to sell their stuff for soon-to-be-debased dollars just to get by so that bargains can be picked up for pennies on the dollar.

Here, the trick is to first get people to sell stuff for low prices in debased currency, then get them to use the debased currency as it debases further to buy "new" stuff (like essentials) for inflated prices. Whew! Talk about transfer of wealth!

(e) Getting rid of the pesky industry that keeps plaguing this nation and preventing it from becoming about service and smiles.

(f) Having at least half of all Americans wear silly grins along with their disease-prevention gear and last-season's designer labels (now there's a feat!) while they rejoice that the "downturn" is showing green shoots and silver linings ad nauseam.

Not that any of it matters.

Instead, think about all that unemployment.

Best thing to do, if you can bring yourself to believe that Obama deserves an "A" for the above is buy into all things war-related. Gold is also good, You might also resort to fleecing your neighbors if you can stomach "partying" with idiots three days a week and feeling bad about yourself forever after.

Depends on your level of hardheaded cynicism.

Apr 27 04:01 PM

[conceptwizard:]

Let me see...if I started a new job that I had never done before.......even with my get the job done capabilities and giving away my 115 IQ compared to his 138 and they asked me to...

1.Save the world in 30 days, financially speaking.
2.Tell Isreal to lay off the Gaza Strip.
3.Make friends with Iran before they blow something or someone up.
4.Put out North Korea's hissy fit because they want to play with missles.
5.. Stop El kidea from taking Pakistans Nukes.
6. Stop Russia from putting a cork in Ukraines natural gas.
7. Play patty cakes with Castro.
8. Watch the county throw Boston tea parties.
9.Stomp on the largest car company in the world, and its little brother.
10. Fly around the world on a PR Trip.
11. Wear out a perfectly good money printing press.
12.Try to save 6 million jobs.
13. Buy a dog for my kids.
14. File my income tax returns on time and make sure I make contributions to charity.
15. Hire people to run the country that aren't crooked. (That was hard)
16. Be a Father, Husband and raise a family.
17.Oh and since i'm not to busy I'll deal with the swine flu epedemic.

All this and time for a swim at the beach in the buff for a photo shoot, and a game of basketball.

Holy crap, all for $250,000 per year. This has got to be the most ungrateful, unappeciated, stressful job in the world. He does this with a smile, calmly with absolutely no medication. All the results aside, this man is amazing.

Apr 27 09:43 PM

[jpiretti:]

What radio stations can you pick up with that tin foil hat?


On Apr 27 12:32 PM Sabastian Curry wrote:

> Obama is a know nothing looting criminal. Anyone that thinks he has
> been doing a good job is a fool that doesn't understand reality.
>
>
> The media sold this loser as a saviour, when in fact he is has never
> accomplished anything ever, is anti-America facist, and has made
> sure that a bad situation under Bush, who was also a criminal, was
> made worse.
>
> Obama stands for nothing but everything un-natural and un-clean:
>
>
> 1. Gay marriage - against nature
> 2. Printing money - against nature
> 3. Illegal immigration amnesty - against reason
> 4. Goverment running banks - immoral
> 5. More war - just in case you good liberals didn't notice -stupid
> sheep
> 6. Free medical - provided by who? Run by who?
> 7. Free education - provided by who and controlled by who?
> 8. Criminals in his cabinet - but that's OK, because he is for the
> people, he is a good socialist
>
> The list goes on, this guy stinks, they are looting the society,
> and the people think he is doing a good job. Hahahahaha. Idiots.
>
>
> Librals embrace all that is wicked. I bet you guys think Castro did
> a good job too.
>
> Sabastian Curry

Apr 28 10:37 AM

[HBWOW:]

As a puppet, I believe he is doing just what he is told, ie when he isn't out on the golf course. What I want to know is his golf scores and is he improving?

Apr 28 11:19 AM

[fireball:]

he has a nice smile.
he is a slicker llier than bubba.
he has been but kissing tyrants and terrorists.
he is crushing the middle class and their children to promote the promised equality.
he is aiding the fed (bankster cartel) to sieze assets and property.
he is pushing uss quickly to the promised socialism at an accelerated pace but it is the corporate fascist version.
he still whines about bush (as do the obamites) yet he is bush deficit multiplied.
he gets an a for being a politician like the rest of them.

Apr 28 12:58 PM

[sandidad:]

Sabastian Curry- Right on, very well said! This country is doomed if something isn't done soon to stop Obama, a closet Muslim set out to destroy this country. Liberals Democrats have to be the stupidest people on the planet. An honest Democratic is an oxymoron.


On Apr 27 12:32 PM Sabastian Curry wrote:

> Obama is a know nothing looting criminal. Anyone that thinks he has
> been doing a good job is a fool that doesn't understand reality.
>
>
> The media sold this loser as a saviour, when in fact he is has never
> accomplished anything ever, is anti-America facist, and has made
> sure that a bad situation under Bush, who was also a criminal, was
> made worse.
>
> Obama stands for nothing but everything un-natural and un-clean:
>
>
> 1. Gay marriage - against nature
> 2. Printing money - against nature
> 3. Illegal immigration amnesty - against reason
> 4. Goverment running banks - immoral
> 5. More war - just in case you good liberals didn't notice -stupid
> sheep
> 6. Free medical - provided by who? Run by who?
> 7. Free education - provided by who and controlled by who?
> 8. Criminals in his cabinet - but that's OK, because he is for the
> people, he is a good socialist
>
> The list goes on, this guy stinks, they are looting the society,
> and the people think he is doing a good job. Hahahahaha. Idiots.
>
>
> Librals embrace all that is wicked. I bet you guys think Castro did
> a good job too.
>
> Sabastian Curry

Apr 28 04:39 PM

[a. palmer jr.:]

I'm afraid Sabastian has it nailed...I do hope that he's wrong but it's not looking good.

Apr 28 05:46 PM

[JulieCJ:]

If any of you who have choosen to trash our President (which, of course, is your right) think you can do the job better, please, by all means, run for President in 2012!!

The 'same ol, same ol' of past administrations and self-serving politicians that got us into this mess in the first place. Things had to change, and lots of people can't handle change, especially if they are inconvenienced by it.

He inherited a huge mess and is dealing with it in new and inventive ways. He's done more for this country in his first 100 days than most presidents did in their whole administrations!!

Personally, I wouldn't want the job - way too much stress - but I credit him for giving it his all! No one is perfect, but he's undaunted in his task!

Rather than name-calling and complaining endlessly, roll up your sleeves, pitch in and help.

Apr 28 07:50 PM