Obama Must Focus on Recovering the Economy

As the Democrats failed to maintain their majority in the House of Representatives, and considering their weakened status in the Senate, President Barack Obama has invited the Republicans to the White House for a meeting on Nov. 18 to consolidate a plan for the two parties to collaborate.

Obama has admitted that the Democrats were “defeated” in the midterm elections; hence, it is necessary for him to work with the Republicans. However, the effectiveness of the collaboration is still in question. Although the Republicans have won, they still have less than two-thirds of the seats in the House; on the other hand, the Democrats happened to maintain the majority in the Senate, although they lost a lot of seats. It is more likely for the two parties to remain in a deadlock.

Nevertheless, the economic crisis is a topic that the two parties cannot ignore. It was obvious that the defect of the Democrats in the midterm elections was due to Obama’s failure to fix the economy after the financial crisis. The results of a survey, performed right at the exits of the polling stations, truly reflected most voters’ feelings: Through this election, they wanted to express their worries about the economy and their dissatisfaction toward the Obama administration. Of the participants, 88 percent thought that the economy was in bad shape and were worried the problem would persist through the upcoming year; half of them were, in fact, “extremely worried.” The public survey also showed that two-thirds of the voters cast their votes only based on their concerns regarding the economy, and of that group 53 percent supported the Republicans, while 44 percent supported the Democrats.

Although the majority of the voters decided to hand the House over to the Republicans, according to the survey, it was not, however, because they supported the Republicans. It was merely an act to express their dissatisfaction toward the federal government. Most of them did not agree with the direction of the federal government; 25 percent said they were angry, and close to 75 percent disliked the current Congress. In other words, to a lot of voters, both Democrats and Republicans are “bad apples,” but they had no choice but to pick one.

Two years ago, Obama became president with his slogan of “change,” and Democrats took over both the House and the Senate. Right now, he is facing pressure to change his course. Democrats and Republicans disagree on most of the major issues. For example, Republicans are totally opposed to Obama’s health care reform and demand for it to be abandoned. They also object to the White House increasing government expenses and the deficit; meanwhile, they demand tax cuts and a smaller government. The rising Tea Party is also on the same page. Therefore, it will not be easy for the two parties to compromise on the major issues.

While facing these difficulties, President Obama will need to get out of the dead end he is in at all costs within the remaining two years. In the history of America, presidents such as Ronald Regan and Bill Clinton lost the midterm elections during their presidency and managed to make comebacks while their parties were the minority in Congress. However, it was only because they fixed the economy.

During the first two years of his presidency, Obama put too much energy into health care reform. Although he managed to get the bill passed, he was completely drained. Whether he totally ignored the issues on the economy and unemployment, or was just too busy working on other issues, he failed to pull America’s economy out of the bottom in the past two years.

The unemployment rate remains high (it has almost reached 10 percent), and a lot of people can no longer afford their mortgages and rents. With the uncertain recovery of the economy, it is understandable that people’s worries and resentment toward the government are rising.

Some people suggested that since things would not go smoothly in Congress, Obama should attempt to find a way out through foreign affairs. It may be feasible; however, in order for it to work, overseas achievements still must meet the needs of the American people. There is actually only one path for Obama to take: He must find a light of hope for the economy within the next two years.

Hence, he should rethink his strategy of manipulating the money in the Federal Reserve. Without a system to control the outflow of the currency, the recent second round of the quantitative easing not only brought pressure to devalue the U.S. dollar, but countries outside of the United States also worried that it will create global excess liquidity, excess hot money, currency appreciation, inflation and bubbles to the stock market. Not many choices are left for Obama; in the next two years he must focus all his resources on fixing the economy, or he will not be able to make a comeback in 2012.