April 28, 2011

IBD Takes Up the Reagan-Obama Recovery Comparison

Filed under: Economy,Taxes & Government — Tom @ 11:45 pm

The Investors Business Daily graphic below pegs the beginning of the Reagan recovery as the first quarter of 1983 instead of the fourth quarter of 1982. The NBER says the 1980s recession ended in November 1982, while the last quarter of actual contraction was the third quarter of that year.

That’s a quibble at this point in comparison to IBD’s overall message, which is the following — The Reagan recovery was outstanding in virtually every way, while Obama’s “Rebound? What Rebound?” sort-of recovery has been unprecedentedly pathetic:

ISSjob_110429

Here is about half of of the related editorial — read the whole thing:

A Tale Of Two Recessions And Two Presidents

It’s been nearly two full years since the recession officially ended, and the economy is still struggling to get off the ground. It didn’t have to be this way.

When the Commerce Department released its estimate for first-quarter growth — a meager 1.8% — President Obama’s chief economic adviser, Austan Goolsbee, at least conceded that “faster growth is needed to replace the jobs lost in the downturn.”

And granted, the economy needs to expand by at least 2.5% just to keep up with growth in the labor force. So at 1.8%, we’re essentially losing ground, a fact that last week’s 429,000 initial jobless claims underscores. But what Goolsbee didn’t acknowledge is that the economy could be growing at a much faster rate, and would be if it weren’t saddled with Obama’s reckless policies.

How do we know this? Compare the two worst post-World War II recessions. Both the 1981-82 and the 2007-09 downturns were long (16 months and 18 months, respectively) and painful (unemployment peaked at 10.8% in 1981-82 and 10.1% in the last one).

What’s dramatically different, however, is how each president responded.

Obama massively increased spending, vastly expanded the regulatory state, and pushed through a government takeover of health care. What’s more, he constantly browbeats industry leaders, talks about the failings of the marketplace and endlessly advocates higher taxes on the most productive parts of the economy.

In contrast, Reagan pushed spending restraint, deregulated entire industries, massively cut taxes and waxed poetic about the wonders of a free economy.

The result? While the Reagan recovery saw turbocharged growth and a tumbling unemployment rate, Obama’s has produced neither.

Sensible conservatives need to hammer the IBD graphic above into Keynesians’ collectivist minds until they beg for mercy and become supply-siders. Why? Because, as the editorial states, we know what works, and we’ve just experienced what doesn’t.

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4 Comments

  1. I would call this episode under Obama as Stagflation. The technical requirement though is wages not rising while retail prices are versus the drawing that assumption based on high unemployment keeping down wage increases. Do we have a chart on wage data showing less than inflation increases? If you do then it would be official.

    Of course the Obama regime would scream the CPI is showing little inflation when the real CPI (without lies) shows 10%. As you know I contend inflation is higher than what is officially reported and thus the GDP figures showing growth are misleading due to the faulty adjustment subtracting out inflation. I contend we NEVER exited the recession because the GDP is as artificial as the Treasury rates, both being manipulated to save face of the Obama Regime’s policy failure. You can’t have it both ways when you print excess money, either inflation cuts down the GDP OR Treasury rates must increase to reflect the true cost of borrowing. Since Obama and Bernanke are trying to have it both ways, the whole thing is going to blow up in OUR faces. They only lose their jobs, but we have to pay for it.

    Comment by dscott — April 29, 2011 @ 8:24 am

  2. [...] Investors Business Daily noted Thursday evening: “It didn’t have to be this [...]

    Pingback by BizzyBlog — April 29, 2011 @ 8:56 am

  3. Ha! Dick Morris agrees with me. More and more people are beginning to realize we are in a period of STAGFLATION.

    Inflation at 10%: http://www.shadowstats.com/alternate_data/inflation-charts

    And as I contend we are still in recession, we never came out: http://www.shadowstats.com/alternate_data/gross-domestic-product-charts

    HOW THE FEDS CONCEAL INFLATION

    http://www.dickmorris.com/blog/how-the-feds-conceal-inflation/

    Comment by dscott — April 29, 2011 @ 9:07 pm

  4. It’s official we are in Stagflation: The annualized wage increase rate nationally is 1.6% as of March and CPI is 2.7%

    http://www.bls.gov/news.release/eci.t08.htm

    The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.5 percent in March on a seasonally adjusted basis, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index increased 2.7 percent before seasonal adjustment.

    http://www.bls.gov/news.release/cpi.nr0.htm

    Comment by dscott — April 29, 2011 @ 9:21 pm

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