In early 2009, the economic situation facing the United States was truly frightening. I had joined the president’s campaign in the summer of 2008 and watched as the collapse of the housing bubble, the bankruptcy of Lehman Brothers, and staggering, widespread financial losses left the country plummeting toward a second Great Depression.
In January 2009 alone, the month that President Barack Obama took office, our economy lost more than 750,000 jobs, and unemployment was on its way to a peak of 10 percent.
In February 2009, I traveled with the president to Elkhart, Ind., his first visit to an American city after taking office. Elkhart had been hit harder by the recession than almost anywhere else in America: the area’s unemployment rate more than quadrupled during the crisis, peaking at 19.6 percent as thousands of local manufacturing workers lost their jobs.
In Elkhart, Obama laid out a path toward recovery, rebuilding, and resurgence, beginning with the Recovery Act. It took an unprecedented set of policy responses across the government to stave off a second Great Depression. The president acted boldly to reinvest in our economy; to rescue the auto industry from near-collapse; to cut taxes for working families and strengthen the safety net for those who had lost their jobs; to help struggling homeowners refinance their mortgages; and to shore up the financial system.
Sign Up and Save
Get six months of free digital access to the Lexington Herald-Leader
Thanks to these tough choices we made in the depths of the recession, and most importantly the hard work and resilience of millions of Americans, our economy has experienced a truly remarkable recovery. On June 1, Obama will return to Elkhart, where unemployment is down to 4.1 percent, to celebrate how far we have come.
These hard-earned benefits of the recovery are also making an impact in Kentucky.
The unemployment rate in Kentucky is currently 5.3 percent, down from its peak of 10.9 percent. Since the start of the recovery, Kentucky has added 166,000 jobs. Homeowners have returned to stronger footing, with home prices rising and the share of mortgages 90 days late or in foreclosure falling from 7.0 percent to 3.5 percent. And thanks to the Affordable Care Act, 94,000 Kentucky residents were enrolled in health insurance through the Marketplace in 2016.
In 2016, the American economy is in the midst of the longest streak of private-sector job growth on record, with businesses adding 14.6 million jobs over 74 straight months. Unemployment has been cut in half from its peak the recession and now stands at 5 percent. Rising home prices have brought millions of American homeowners back above water. The auto industry has added over 660,000 jobs since Chrysler and GM emerged from bankruptcy.
And we’ve taken historic steps to strengthen our economy in the long term. Twenty million more Americans now enjoy the security of health insurance thanks to the Affordable Care Act. The Dodd-Frank Wall Street reform has made our financial system safer and stronger, with less leverage and risk-taking.
None of this would have been possible without our forceful response in the early days of the downturn. Economists Alan Blinder of Princeton University and Mark Zandi of Moody’s Analytics have estimated that without those actions, unemployment would have peaked at nearly 16 percent and remained over 2 percentage points higher in the middle of 2015, with 3.6 million fewer jobs in the economy.
But there is still more work to be done. In his remarks in Elkhart, Obama will lay out some of the challenges that remain for the U.S. economy, especially in fighting the long-term trends that have left some Americans behind over the past decades.
That includes raising the minimum wage so that parents working full-time do not raise their children in poverty. It means ensuring that high-quality pre-K and two years of community college are available to all. If we make sure that those at the top pay their fair share of taxes, we can fund new investments in infrastructure and R&D.
And we can support more high-paying jobs by passing high-standards agreements like the Trans-Pacific Partnership that give American workers and businesses a fair chance to compete in the global economy.
The effects of the steps that the president took in 2009 can be seen today in Elkhart, in Kentucky and across the United States. Thanks to these tough choices, we have turned what could have been a second Great Depression into a robust recovery. As we focus on the challenges that remain, the entire Obama administration will continue our work to grow the economy and to strengthen opportunities for all Americans.
Jason Furman is chair of the White House’s Council of Economic Advisers.