Crisis Legislation – The 2008 Financial Crisis and Economic Legislation

Essay , 2009 , 7 Seiten , Note: 2.5 (B+)

Politik - Thema: Globalisierung, pol. Ökonomie

The 2008 Financial Crisis and subsequent economic recession made economic legislation a priority for newly-elected President Barack Obama. The American Recovery and Reinvestment Act of 2009, better known as 'The Stimulus,' provided a case study in the domestic politics of 'crisis' legislation.

On September 14th 2008, Lehman Brothers filed for bankruptcy and the presidential election between Barack Obama and John McCain transformed to a one-issue race: the only issue on the minds of Americans became the economy. The economic crisis that helped secure Obama a victory in the 2008 presidential election also created a unique opportunity for Obama to advocate for Congress to legislate an enormous spending bill to act as an economic stimulus package, which he eventually signed into law in February 2009. Barack Obama’s used the authority of his recent election work as a mandate for “change” during an economic recession guaranteed the successful passage of The American Recovery and Reinvestment Act of 2009.

The Obama administration’s attitude towards the election results is best described by Rahm Emanuel, who said in a statement after accepting his appointment to White House Chief of Staff, “We have work to do, and Tuesday Americans sent Washington a clear message - get the job done.”^[i] The perceived mandate in the midst of an economic crisis opened the door for Obama to pursue the passage of $787 billon stimulus bill which a heavily Democratic Congress drafted for him. As President-elect, Obama employed his recent electoral success to establish the necessity of a stimulus bill to combat the deepening recession. “I don’t believe it’s too late to change course, but it will be if we don’t take dramatic action as soon as possible,” he said in the address, delivered at George Mason University. “If nothing is done, this recession could linger for years.”^[ii] While Obama spoke at George Mason University, his senior advisor David Axelrod met with House Democrats to work on the direction and substance of the stimulus legislation.^[iii] Obama was not yet President, but as President-elect he was already conveying his message from a bully pulpit and his administration was already energetically engaged in fulfilling his call for a stimulus package.

The energy Obama brought to combating the financial crisis inspires thought of Hamilton’s advocacy for a vigorous executive. In Federalist No. 70, Hamilton asserts, “Energy in the Executive is a leading character in the definition of good government.” (Hamilton, 447) Hamilton advocated a strong, central government as necessary to the protection of liberty and the security of the nation; however, Hamilton failed to foresee an energetic, unitary executive as acting destructively in a self-interested manner. The stimulus package, passed during a financial crisis, would have almost definitely lacked the force if the same legislation had the scenario been different. “Rule one: Never allow a crisis to go to waste,” Mr. Emanuel said in an interview on Face the Nation, “They are opportunities to do big things.”^[iv] Obama flexed the power and force of his electoral success while operating during a financial crisis, but was his economic policy really a necessary measure to stave off financial meltdown? The substance of the legislation points to a more self-interested motive. The Wall Street Journal Opinion Journal points out, “This is a political wonder that manages to spend money on just about every pent-up Democratic proposal of the last 40 years.”^[v] As Speaker Nancy Pelosi put it, "We won the election. We wrote the bill."^[vi] The obvious partisan nature of the substance of the massive appropriations bill lends itself to scathing scrutiny to anyone interested in whether the bill had the ingredients to stimulate the economy. Russell Roberts, a professor at George Mason University wrote,

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^[i] Rochelson, Dave. “Emanuel to be Obama’s White House Chief of Staff.” http://change.gov/newsroom/entry/emanuel_to_be_obamas_white_house_chief_of_staff

^[ii] Goldman, Julianna. Miller, Rich. “Obama Warns of Prolonged Crisis Without Stimulus Plan.” http://www.bloomberg.com/apps/news?pid=20601087&sid=azAp..che8Xc

^[iii] Ibid.

^[iv] Zeleny, Jeff. “Obama Weighs Quick Undoing of Bush Policy.” http://www.nytimes.com/2008/11/10/us/politics/10obama.html?_r=1

^[v] Opinion Journal. “A Forty-Year Wish List.” http://online.wsj.com/article/SB123310466514522309.html

^[vi] Ibid.

• Veranstaltung: Introduction to American Government
• Note: 2.5 (B+)
• Autor: Conor Cummings (Autor:in)
• Erscheinungsjahr: 2009
• Seiten: 7
• Katalognummer: V210761
• ISBN (eBook): 9783656390473
• ISBN (Buch): 9783656391487
• Sprache: Englisch
• Schlagworte: crisis, legislation, financial, economic