Obama answers skeptics after recession is declared officially over

From foreclosure to food shortages, the economic downturn set in motion by the financial crisis of 2008 is having a broad and deeply-felt global impact.
By Neil Irwin and Nia-Malika Henderson
Washington Post Staff Writers
Tuesday, September 21, 2010; 3:22 AM

On the day that the Great Recession was officially declared to be part of history, President Obama confronted deepening angst from business leaders and ordinary Americans who have little faith that the recovery is for real.

The determination that the U.S. recession ended in June 2009, made by a panel of private economists who are the arbiters of business cycles, confirms that the 18-month downturn was the longest recession of the post-World War II era.

The nation - and the political system - remain haunted by that downturn. Vast majorities of Americans think the nation is still in recession, regardless of what scholars say. And with the unemployment rate at 9.6 percent and growth too slow in recent months to drive the rate down, economic distress has become the defining backdrop of Obama's first two years in office.

The crisis may be over; the stock market has risen 42 percent since he was inaugurated, including 9 percent this month. But the frustration over the slow recovery remains. Obama took the stage at the Newseum in Washington on Monday in an hour-long town-hall-style meeting sponsored by the financial cable network CNBC, facing questions that reflected the nation's deep discontent.

A 30-year-old law school graduate said he's no longer able to make the interest payments on his educational loans, much less afford a mortgage or a family. He said that he had been inspired by Obama's campaign. But now, "that inspiration is dying away," he said. "I really want to know: Is the American dream dead?"

"Absolutely not," Obama replied. "There is not a country in the world that would want to change places with us. ... We are still the country that billions of people in the world look to and aspire to."

Another woman, who said she voted for Obama, told him she was deeply disappointed with her lot. "My husband and I thought we were beyond the hot dog and beans of our lives. ... Is this my new reality?" she asked.

"I understand your frustration," Obama said. He defended his administration's efforts to help the middle class, listing achievements such as better protection for mortgage loans and health insurance for those with preexisting conditions.

He also sought to instill confidence among the investor and executive classes, who have deserted him in droves over the past year.

Obama's tone was different than in recent appearances, as he eschewed some of the more populist touches that have accompanied his attacks on Wall Street bankers. Moderator John Harwood, CNBC's chief Washington correspondent, asked early on whether the president was "vilifying business."

"Absolutely not," Obama said. "Look, let's look at the track record here. When I came into office, businesses - some of the same commentators who are on CNBC - were crying, 'Do something!' because, as a consequence of reckless decisions that had been made, the economy was on the verge of collapse. Those same businesses now are profitable; the financial markets are stabilized."

Although he avoided business-bashing rhetoric, Obama defended his history on a range of policies, pushing back against the idea that his record on health-care reform, financial regulation and intervention in the automobile business has hurt the markets and business community. He said that Wall Street is thriving, pointing out billion-dollar bonuses, and that the auto sector has been revived.

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