End of Obama’s Mandate

president-approval-ratingshttp://www.economist.com/news/briefing/21708216-americas-president-writes-us-about-four-crucial-areas-unfinished-business-economic

 

The Economist link above takes you to Barack Obama’s text summarizing in a few pages his two mandates as a president of the United States of America and the remaining tasks for the next one.

He addresses many points that during these years we have been concerned about in and out of the USA: declining productivity, rising inequality, excessive importance of finance in modern economies, less than acceptable accountability of capitalist organizations within democratic societies.

The text of the President gives us a positive feeling about his digital education (the age of the two candidates and their apparent behaviors looks very dissimilar). Consistently with the beliefs supported by his party, he sees the importance of the fiscal side to complete the economic management of the country (his words sound alarmingly similar to the ones of the president of the ECB, falling on deaf ears, when he insists in saying that monetary policy has nearly completed what it could do, it is up to governments now to act). The limited use of the fiscal policy during his years is due in an important way to self-imposed constraints than to real limits (what would he say if were reasoning about Europe? How would Mr. Schauble fare within the Republican Congress? How would the USA be today if they had been ruled by Mrs Merkel?).

He rates education as one of the most critical infrastructures for the future growth of the country (in Italy we have been speaking about the “Bridge over the Strait” between mainland Italy and Sicily for over a century, it seems that the costs already paid for it sum to about € 600 million, 128.597.000 of which between 1982 and 2005).

Modern and responsible unions are called to play an important role in the future of the USA, reading this line the mind goes inevitably to Europe, where a need of a Schumpeterian creative destruction can be perceived.

His sensibility to real life situations belonging to common people distances him from the caste feeding the citizens strong disaffection with the establishment. The comparison with many “minus habens” populating useless, fully self-referential, organizations elsewhere is striking.

His Obamacare success takes only two lines to be described (here the disinformation organized by the impacted industries has been very effective). Exhibit 1, 2 and 9 below details the importance of the health care reform for the sustainability of the welfare offer in the USA. The data show the space for improvement still existing in the filed: by suffering a higher cost than many other economies, the delivered effect is largely inferior. Something here is not working, a lot still missing, at least the first step had been done.

Health care Is one of the largest costs for the USA society, its inflation has been much higher than the average consumer price inflation in the USA (the annual cost has been increasing at a rate three times faster than GDP), the trend was unsustainable and going towards a sure bankruptcy, it was just irresponsible not to address the issue.

One document worth reading to get a more complete picture of the accomplishments reached during the years of Obama administration is “How should we think about this recovery?” by Jay Shambaugh (member of the Council of Economic Advisers) downloadable at the internet address of the White House https://www.whitehouse.gov/sites/default/files/docs/20160914_cea_shambaugh_macroadvisers.pdf.

A great president is leaving, the debates we are assisting in the selection process to elect the next one tend to be miserable. A lot has been done in very difficult years, a lot still needs to be done in years that will not be much easier, we still need to see more comforting projects then just the vacuous statement “make America great again!”

Exhibit 3. Select Population Expected Life at Birth in 2013
Australia 82.2
Canada 81.5
Denmark 80.4
France 82.3
Germany 80.9
Japan 83.4
Netherlands 81.4
New Zealand 81.4
Norway 81.8
Sweden 82
Switzerland 82.9
United Kingdom 81.1
United States 78.8
OECD Median 81.2
Source OECD Health Data 2015
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