A lot of time, effort, and money goes into presidential and national elections in the United States and this year is no exception. But combing through the data since 2009 shows that no matter who was in power, the economy seemed to be equally driven by global events, demographic developments, and decisions made in the White House.
The period from 2009 to 2024 covers both of Barack Obama’s two terms in the White House, plus the single presidential terms of Donald Trump, and Joe Biden, which is slowly coming to an end.
Looking back at Obama, Trump, and Biden
There were two major disruptors during this time for the economy. The first was the financial crisis that started before Obama took office and the COVID-19 pandemic that struck during Trump’s time in office.
The financial crisis led some to fear the collapse of the entire banking system. Soon afterward General Motors and Chrysler declared bankruptcy to reorganise themselves and the housing market—specifically mortgages—was spinning out of control.
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The COVID-19 pandemic had a more immediate impact on the US and global economies. Lockdowns, shortages due to delicate supply chains, and the closure of borders caused chaos, deaths, and massive job losses. Partly through large stimulus checks, the US managed to get out of the pandemic slump fast, picking up where the economy left off, creating a strong recovery.
American GDP versus other giants
One problem comparing the impact Presidents and their policies make is the lag in time it takes for them to make a difference. Investing in infrastructure or industries like chipmaking is necessary, but the benefits are way in the future. Tightening the border with Mexico may keep out some migrants, but the impact of missing workers takes time to hit supermarket prices.
Another problem is assessing the impact of presidents separately from decisions made together with policymakers in Congress or independent institutions like the Federal Reserve.
Since 1990, American GDP per capita has grown each year except 2009 and that was another knock-on effect of the financial crisis. Last year, the country’s GDP per capita was over $81,000 (€74,700).
At the same time, when it comes to the annual percentage of growth per capita, China and India have had stronger growth. Despite this higher growth rate, America’s per capita GDP is still three times higher than China’s and eight times higher than that of India.
In 2023, America’s overall GDP was an astounding $27.36 trillion, making it by far the biggest economy in the world. China came a distant second at $17.66 trillion, followed by Germany and Japan.
A lot of jobs for a lot of people
In the first few months of Obama’s time in office, unemployment went up because of the financial crisis. From April 2009 to September 2011, it was at 9 per cent or more. After that, it slowly crept down until it reached its lowest level since the 1960s, before a short-lived spike during the COVID-19 pandemic put many out of a job. This year it has hovered around 4 per cent.
On another front, American workers are more productive than others thanks to innovation, spending on research and development, and the willingness of workers to change jobs or move.
Pay inequality at the bottom
Another measure that has increased is pay inequality. America is the most unequal country in the G7 group. The top 1 per cent of Americans hold a huge proportion of the country’s wealth. In the US, to get into the top 1 per cent of earners requires an annual household income of around $1 million a year before taxes. In the UK it only takes around $2,50,000.
Company bosses’ pay was over 250 times more than their average employee, wrote Barack Obama in The Economist in October 2016. Moreover, in 1979 “the top 1% of American families received 7% of all after-tax income. By 2007, that share had more than doubled to 17%,” he wrote. More positively the proportion of people living in extreme poverty fell.
Migration is changing America
The exact number of illegal crossings into the US is hard to measure. Legal migration on the other hand can be counted. One measure of this is the number of green cards granted and from 2009 to 2022 over 14 million people were given such status.
The foreign-born population living in America, legally or otherwise, has grown considerably over the past 50 years in size and share of the population, according to a report issued by the US Census Bureau in April.
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In 1970, there were 9.6 million foreign-born residents. By 2022, there were over 46 million, or nearly 14 per cent of the total population. Of the overall total, nearly one-third of the country’s foreign-born came to the US in 2010 or later and half live in just four states: California, Texas, Florida, and New York. More than half have become citizens.
High inflation comes to America
Since January 2009, inflation has gone on a wild ride based on the Consumer Price Index. When Obama took office, inflation was at zero, went into negative territory, and eventually climbed to a high of 9.1 per cent in June 2022. This past September, it was down to 2.4 per cent, the lowest since February 2021.
This relatively short period of higher inflation is having a long afterlife and has led to big cost of living increases for many Americans. Consumer prices are up, and voters are very unhappy about it. It is one of the most important issues this year and could decide the election in swing States. It is also one of the hardest things for any President to control.
