A year and a half after Obama’s inauguration, the economy has lost another 3 million jobs. Republicans/Conservatives/Libertarians are claiming they told us so, and are happily bringing up Obama’s low approval ratings. It's not uncommon to see clever logos on shirts and Facebook pages messages like "NOBAMA" and "GTFO" using Obama 2008 campaign logo colors. Alongside this, seems to be an almost religious-like notion among many (no doubt, mainly conservatives) that Reagan stepped into office and cleaned Jimmy Carter’s ‘mess’ virtually overnight. That what we really need is a Reagan (or for that matter, a Ron Paul). With their fiscally responsible economic theories and eloquent lip service to the free market, America would find itself in a faster recovery.But taking employment numbers from the Bureau of Labor Statistics, we can see things didn’t work so smoothly for Reagan. And we see yet another example of how, for all the superficially impressive “cutting spending” sounds, its actual application has been a complete failure. In comparing time lines (the year before being inaugurated to the year after), we can see what Reagan’s progress would look like during this time in President Obama’s time in office.
Obama was inaugurated as the economy was losing jobs (in fact, nearly 800,000 jobs were lost the month he was inaugurated). Within a few months, we see the job losses level out and even slightly recover.
Reagan was inaugurated as the economy was gaining jobs. Within a few months, we see this trend reverse, and job losses would continue beyond the period being measured.
In comparing unemployment rates, it looks like this (note the unemployment rates change after Obama and Reagan’s policies).
In fact, this is what Reagan’s poll numbers looked like around this time. As you can see, during this time in his presidency, the unemployment rate was worse and his approval ratings were in the toilet. Anyone predicting his re-election at this point in his presidency would sound crazy. His re-election took place with the unemployment was still around 9%. Unemployment will likely hover around 7.5-8% when the 2012 election cycle comes around.
Fiscal conservatives are also fond of reciting Reagan’s tax cuts and how they grew the economy. The problem with this is that the “growth” is virtually indistinguishable with a typical economic recovery phase of a business cycle. This ‘growth’ is also dwarfed by the growth that preceded Clinton’s raising taxes on the top income earners (important to keep in mind considering conservatives are arguing against Obama’s pledge to allow the Bush tax cuts on the top earners to expire). The Clinton-era growth goes well beyond a typical recovery. It was true economic growth that grew even a fully employed economy. Raising taxes on the top earners apparently didn't prevent economic growth.
Whether or not we can really attribute unemployment rates and GDP growth to the policies passed under these presidents is debatable. The point is, religious-like memory of Reagan is false, and the constant lambasting of Obama is based on partisan bias and/or a misunderstanding of economic recoveries.
In understanding the usual trends that come with recessions and looking back at previous cycles it's not at all surprising the economy is taking awhile to recover. It's easy to point the finger at Obama (in fact, before Obama was even inaugurated, Fox news was already referring to the "Obama Recession") and assume it's his fault businesses aren't hiring. But the more you compare this to previous recessions and take into account that the financial crisis threatened to be the next Great Depression, the less likely you are to play the blame game (and that includes blaming Bush).
Unfortunately, it seems we've mostly been conditioned to think in the short term. We assume that if a President makes the right decisions the effect will be felt overnight. Instead of learning about recessions and realizing that stock market rallies and GDP growth precede job growth, and that job growth doesn't happen overnight, we simply look to point fingers at politicians. It never quite occurred to me what Gore Vidal meant when he says that we live in the United States of Amnesia until I really began to follow politics and current events 2 years ago.
