The Wall Street Journal has updated its version of the Reagan v. Obama post-recession GDP comparison at the immediate right. (Update, 7:30 p.m.: Yours truly’s version is at the far right, showing that the Reagan post-recession outperformed Obama’s by a factor of over 2.5 in two years, and by a fact of over 4 in its second year.
Its editorial says the right things, but its solution paragraph is perfunctory and fails to go to the heart of the problem — namely President Barack Obama and his grim band of “progressives” (bolds are mine):
The Obama Recovery
Why there is a growth recession, and what to do about it.
Americans already know that economic growth is flagging, but Friday’s second quarter GDP report confirms it: The current recovery, already one of the weakest on record, nearly stalled in the first half of 2011.
… The historical pattern is that the deeper the recession, the more robust the recovery.
… This tale of two recoveries is an object lesson in economic policy. Taking office in 2009, President Obama embarked on one of the greatest reflation bets in history. He deployed the entire arsenal of neo-Keynesian policies to lift domestic demand, much as former White House economist Larry Summers still instructs at Harvard and most of the media still recommend.
… The bet was that with all this stimulus the economy would rebound as it did in the 1980s. Most of Washington and Wall Street believed that Mr. Obama was set up beautifully to inherit a normal recovery, claim victory for his policies, and ride easily to re-election. The problem is that the policies haven’t worked. We are left with slow growth, high unemployment and $4 trillion in new debt.
The architects of this Keynesian debacle now offer the ex-post explanation that recoveries that follow financial panics are always slower. And there is no doubt that the financial meltdown has required banks, businesses and consumers to shore up their balance sheets and pay down debt.
But this is all the more reason to have pursued policies that nurture business and consumer confidence, rather than frighten them into taking fewer risks. An economy recovering from financial duress needs incentives to invest again, not threats of higher taxes. It needs encouragement to rebuild animal spirits, not rants against “millionaires and billionaires” and banker baiting. …
… these folks (in the liberal political class) are intellectually tapped out. They can’t explain their current failure any more than they could the stagflation of the 1970s.
The only way out of this mess is to return to the growth policies that nurtured the boom of the 1980s. The circumstances aren’t the same, so some of the policy choices will have to be different. But the principles are the same: Encourage businesses to expand, rather than government; let markets allocate capital, rather than politicians; liberate entrepreneurs by reining in the regulatory state.
The Obama malaise wasn’t inevitable and needn’t continue. It will end when our political class admits that its nostrums have failed and it is time to once again free the creative energies of the American people.
The second-last excerpted paragraph ignores what cannot be ignored: This president, and this administration cannot abide by a recovery that isn’t achieved on their terms. They would prefer no recovery at all to a recovery which involves the 1980s-like policies which worked. Nothing short of their removal from power or utter marginalization will bring about a legitimate recovery.