Former President Obama tweeted in honor of the anniversary of signing the American Recovery and Reinvestment Act of 2009.
Eleven years ago today, near the bottom of the worst recession in generations, I signed the Recovery Act, paving the way for more than a decade of economic growth and the longest streak of job creation in American history. pic.twitter.com/BmdXrxUAUf— Barack Obama (@BarackObama) February 17, 2020
Nicknamed “The Recovery Act,” President Obama urged Congress to pass this $800 billion economic stimulus package to keep the nation from slipping further into a recession that “we may be unable to reverse,” following an official visit to my hometown of Elkhart, Indiana.
The “RV Capital of the World,” Elkhart county’s unemployment rate jumped to 20 percent – the highest in the country – in 2009.
I was a sophomore in high school at the time and the majority of my friends’ parents’ were laid off or underemployed. Everyone, no matter their socioeconomic status, struggled.
Most RV factory workers who had been laid off mowed lawns to make ends meet. Most RV suppliers went out of business. In 2008, our local accountant lost more than 100 small business accounts.
Service industry-based businesses were taking any job they could get just to keep their doors open.
I remember in Obama’s first speech at Concord Community High School, an optimistic president promised that under his administration, we would be able to rise above our current struggles. Jobs would be created, everyone would have healthcare, and we would reinvest in our roads, bridges, and other infrastructure.
Elkhart was pushed to diversify its industry and was promised millions of dollars of grants to jump-start an electric car industry, specifically. With a $39.2 million federal grant, officials at Navistar Inc. predicted they could create 700 jobs.
But, that project – and many others – never came to fruition.
In 2012, I had the opportunity to interview Robert Gibbs, former White House Press Secretary, about what else was going to be done by the administration to aid Elkhart County. He touted that we [Elkhart] should be, “proud of the current unemployment rate.”
At that time of that interview, the unemployment rate was around 10 percent.
In 2016, President Obama returned to Elkhart for a PBS town hall to defend his economic record. Promises and policies like cleaner air and water, universal healthcare, and higher wages were said to have contributed to some of Elkhart’s successes during the broadcast, even though this administration polluted the Animas River, severely worsened the national debt, and is rewarding states for Affordable Care Act exchange failures.
More than a decade later, Elkhart, Indiana is an example of America’s recovery from the greatest financial crisis since the Great Depression. Despite all the government waste and abuse, Elkhart has thrived. As of Dec. 2019, the unemployment rate is 2.4 percent.
But if stimulus money didn’t help, then what did?
The answer is a bit complicated.
Stan Glanders, the owner of Master Automotive and former Elkhart City Councilor, credits the city’s comeback to faith in the economy.
“There was more tax, more oppression, more regulation. No one believed that the economy was going to get any better,” Glanders said.
“People were so tight with money that we experienced some pent up demand, much like what we saw at the end of World War II,” he said.
My Dad, also a businessman, mentioned that it’s important to note specifics about the state of the RV industry at the time.
“It’s not enough to say, ‘Oh, the RV industry wasn’t doing well,’” he said. “It wasn’t doing well because no one could get the financing they needed to buy an RV.”
And no one could really get proper financing for anything when banks relied on mark to market accounting while asset prices tanked. Some economists believe that the economy turned around when the U.S. Financial Accounting Standards Board eased the mark to market accounting rule in 2009.
Overall, it’s delusional to attribute the comeback of my hometown to the government that initiated Quantitative Easing, bailed out the banks that sold subprime mortgages, and imposed the taxes and the regulations that slowed economic growth.
As Ludwig von Mises once said, “Once the principle is admitted that it is the duty of the government to protect the individual against his own foolishness, no serious objections can be advanced against further encroachments.”