President Obama often asks the voters to understand that he inherited a very bad economy, and he did. But in many ways it was not as bad as the economy Reagan inherited from Carter.
On Reagan’s Election Day in 1980, unemployment was at 7.5 percent and headed for 10.8 percent; inflation was at 12.5 percent, headed for 13.6 percent, and interest rates were at 15.5 percent, headed for 21.5 percent by Christmas, well before Reagan was sworn in.
Obama inherited an unemployment rate of 6.8 percent and no inflation problem. Inflation was only 1.1 percent in comparison to the crushing 21.5 percent left by Carter. By the time Reagan was sworn in in January business men, farmers and home buyers (if you could find one) were paying 23 to 24 percent interest rates on loans.
Reagan wasted no energy on blaming Jimmy Carter. He approached the problem by lowering marginal tax rates in gradual steps over three years. He eased the regulatory burden on businesses, making it simpler to open or expand a business. His infectious optimism reminded people “the best is yet to come.” America was still “the shining city on the hill,” and Reagan reversed the country’s mood from a Carter-induced “malaise” to a can-do spirit.
In stark contrast, Obama did just the opposite with predictable results. He increased the regulatory environment increasing the cost and difficulty of opening or expanding a business. He introduced new law burdening business with new costs that are significant and beyond measurability at the same time. He fought for a return to higher taxes before acquiescing. Obama made his belief clear that America never was a shining city on a hill; it was a country in need of complete transformation. For America’s leader to wear a flag pin on his lapel was to honor a nation that was undeserving of such respect, a country that was in no way exceptional.
Reagan’s policies worked. By the end of his first term, inflation was down, employment was up, the economy was in good shape again and the mood of the nation had gone from morose to bright and cheery. In the bid for a second term, Reagan won every state with the sole exception of Minnesota.
Today we are where we are because of the president we picked in 2008, not because of what he inherited.
This post was adapted on an article by Peter Hegseth.
“People know that vast personal incomes come not only through the effort or ability or luck of those who receive them, but also because of the opportunities for advantage which Government itself contributes. Therefore, the duty rests upon the Government to restrict such incomes by very high taxes.”
Who said that? It was not our current president. Here’s a clue – It was the only President in our history who presided over an even longer economic recovery than Barack Obama. It was Franklin Delano Roosevelt in an address to Congress in 1935. It is no coincidence that the economic policies of both presidents failed. Minds that think alike produce results that look alike. Roosevelt ordered thousands of young pigs to be destroyed to raise the price of pork – in a depression! Obama ordered thousands of serviceable cars destroyed which raised the cost of transportation for lower income families — in a recession.
As the opening quote attests, Roosevelt sought to siphon money from the employer class to pay for federal government programs. Obama seeks to do the same. Roosevelt’s plan for recovery was to put people to work on the taxpayer’s payroll, not in the private sector. See the CCC and WPA. Obama’s plan is to rebuild roads and bridges (WPA) and subsidize unprofitable environmental programs like the Solyndra (CCC).
Roosevelt took measures later declared unconstitutional by the Supreme Court. See The Schechter Brothers and the NRA (National Industrial Recovery Act). Obama has also been at odds with the Supreme Court. Both presidents felt restrained by the Court, as well they should. The Court is there to protect the people from an overreaching government. Both presidents sought powers beyond those stipulated by our founders, albeit for different reasons.
When two presidents think so much alike and manage economic recoveries with results that are so much alike, it’s not coincidence. It’s because their policies don’t work. And what are those different reasons? Roosevelt’s goal was to restore the economy and benefit lower income workers. He just didn’t know how to do it. Obama’s goal is to put a choker on capitalism and completely transform America. He knows what he is doing. It’s up to the voters not to let him do it.
Posted in Economy, Opinion, Political philosophy, Political polemics
Tagged economic recovery, jobs, National Industrial Recovery Act, Obama, Roosevelt, Solyndra, Supreme Court, unemployment
Unemployment has been 8% or higher for the last 41 months and Barack Obama said in Ohio on Friday that the country is headed in the right direction. If that’s the case, I have to ask just where it is he thinks we should go?
The U6 number which includes would-be workers who have given up and dropped off the stats is pushing very close to 15%. The country hasn’t experienced such economic malaise lasting this long since the Great Depression, literally.
Increasing taxes on the rich won’t create jobs. Adding an immeasurable cost of doing business with a health care plan when we still don’t know what’s in it won’t create jobs. Blocking energy programs like the Keystone Pipeline and placing moratoriums on drilling in the Gulf doesn’t create jobs. Subsidizing green energy programs like Solyndra hasn’t created any net jobs. The Joint Economic Committee led by Congressman Kevin Brady issued a report saying that the Obama recovery now ranks dead last in modern times. Spending stimulus, housing bailouts, auto bailouts, financial bailouts, cash for clunkers, extending unemployment benefits and $5 trillion in deficit spending left the Obama recovery dead last in modern times.
If you are a President, how do you create jobs? You don’t. Business creates jobs; you clear the road stand aside and cheer. You don’t stand in the middle, over-regulate and jeer — and then blame the lack of progress on your predecessor.
People vote their pocketbook and their deepest convictions. Economics, abortion, gun rights and distaste for the opposing party are the four factors, broadly defined, that figure prominently in any election. The Walker recall attempt only involved two, economics and opponent distaste. Economics was the determining factor.
When campaigning for office in 2009, Scott Walker pledged to bring down the cost of state government and to deliver on the economy. He did both. Imagine that, a politician who keeps his promises. It didn’t go unnoticed. Wisconsin’s unionized government workers were among the very highest paid in any state and so far above their private sector equivalents that a sense of unfairness prevailed among the voters. Why should I subsidize a government worker with my tax dollars when he or she already makes more than I do for the same work?
Unemployment in Wisconsin is 6.7%, far below the 8.2% national average. On a per capita basis that translates to nearly 20% fewer people out of work in the state.
A lot was at stake here and everyone knew it. An all out effort to defeat Walker was made by the unions and the Democratic Party. The campaign was vicious at times and turned downright dirty when desperate Democrats introduced an unsubstantiated rumor at the last minute that Walker had fathered a child out of wedlock. Feelings of opponent distaste ran high. Nevertheless, some 11% of self declared Democrats voted for the Republican. Fair is fair.
Wisconsin is a blue state. Some pundits now say it will be in play in November. I don’t know. But one thing is sure; the wind is blowing our way.
You hit me first!! No I didn’t. YOU hit ME first!!
While Obama blames today’s American unemployment on France and Europe, French Foreign Minister Laurent Fabius threw it back at Barack Obama saying the threat of the European debt crisis originated in the United States. “Lehman Brothers was not a European bank” Fabius said.
The PIGS, Portugal, Ireland, Greece and Spain not to mention France and Great Britain have been spending at unsustainable rates ever since they recovered from World War II and now it’s our fault that they ran out of money. Here at home, our own government set up a house-of-cards in the mortgage market that inevitability had to fail like a Ponzi scheme. When it did, we chose a socialist to solve the problem and he blames France.
The Brits have Monty Python; we have Washington.
The answer to the question “What is the U.S. unemployment rate?” is another question – which unemployment rate? The U.S. Labor Department reports unemployment several ways.
U-3 Unemployment is the statistic most often quoted by the press. But U-3 only counts as unemployed those people who have applied for a job in the last 4 weeks and have registered their application(s) with a government unemployment office. So what the popular U-3 statistic counts is not people who are unemployed; it counts people who are currently looking for work. There is big a difference. In fact, it doesn’t even reflect all the people who have looked for work in the last 4 weeks, only those who reported their search to the government. Job seekers who are no longer eligible for unemployment compensation and who apply directly to an employer instead of through an employment office are not unemployed as far as the U-3 number is concerned. U-3 is currently 8.2%
U-6 Unemployment counts people who have applied in the last six months and also includes people only working part time on involuntary workfare in order to qualify for government benefits. Obviously U-6 catches more of the truly unemployed. However even U-6 doesn’t include the long term unemployed or anyone not actively seeking work. U-6 is currently in the range of 15%.
In good economic periods the spread between U-3 and U-6 is much lower and therefore less important. U-6 is by far the more realistic number reflecting true unemployment. Reporting U-3 is more favorable to Barack Obama but this is not another case of MSM bias. U-2 has always been the standard reference because it is less volatile.
You remember Rick Santelli. He is the floor trader whose spontaneous outrage gave birth to the Tea Party. Here is his assessment of the just released 8.3 % unemployment figure, a number that put a smile on the face of Barack Obama. Santelli finds that the favorable looking number resulted from two not so favorable causes, an adjustment in the calculations and more people dropping off the unemployment list because they have given up seeking for work.
The unemployed number is intended to count only those people who want work, so students who have yet to enter the work force and retired folks are excluded. That makes sense. However, people who do want work but have given up and dropped out of the system are also excluded. That is a distortion. Statistically speaking, they are neither employed nor unemployed. They don’t have jobs but are treated as though they do not exist.
There is no official tally of their numbers but various estimates say the published unemployment rate would be somewhere between 12 and 19 percent if these truly unemployed were considered officially unemployed.
Click here for the Santelli video.