President John Doe – A Fictional Tale of A Real Recovery
WARNING: RANT AHEAD (feel free to skip ahead to the article below)
Having grown up in Oklahoma I have always heard that Ronald Reagan was simple the best president of the past 150 years, but I have rarely heard much of an explanation as to why beyond tax cuts, and that he beat communism. I think that the explanation that I’ve gotten about Reagan has often been overly simplified. Over the past couple of years I have discovered that I do respect and love Reagan as a person (a lot) but that we did have some disagreements (which is ok) and that he seems to be inaccurately portrayed by some conservatives. President Reagan did fight against and many ways dismantled communism, and I think that’s great. But the side that I never heard about growing up includes facts like: he raised taxes (after lowering them), left a failing war (in Lebanon), wanted to get rid of all nuclear arms (although he had a funny way of showing it), and gave amnesty to illegal immigrants (although he intended for this to be a one time thing). I have heard a lot of conservatives claim Reagan and then say things that would not fit with his political philosophy. I don’t mean to hurt feelings, but I truly would like to better understand where a lot of this rhetoric comes from… I love Reagan for being a principled man, even though his policies seemed to have hurt many people in the lower tax brackets. However, I think that he actually believed that the markets would eventually help them.
My most current problem with all I this is the complete joke of a campaign against President Obama. It seems like people are constantly inventing some caricature of him that isn’t actually real… I am open to the idea that the recovery could’ve been better dealt with, but I also think that it would make sense that the more natural rate of growth for a recovering economy like ours should maybe look like ours (key point being that Reagan’s economy was essentially subsidized by tax cuts and borrowing foreign money, and yes tax cuts in the end are another form of government spending if they aren’t offset by something that would have otherwise been paid for going away…).
I respect a lot of conservative thinkers, and I often think that they might be right about how things would most efficiently work, but the conversation about our president has just become so blatantly dishonest (even just by the omission of specific facts) that I find myself compelled to ask why this is happening. One example of a conservative who I usually agree with is David Brooks (New York Times) as he will regularly talk about how he disagrees with the president, but that this disagreement is philosophical and not just because he is Dumb, or anything like that. It is ok to have different philosophies and approaches to the world. You do no have to agree with Obama Philisophically but I am so tired of hearing the B.S. If you don’t like automobile company bail outs bring it up and explain why, there is plenty to discuss. If you are against the government trying to help college students with their loans by making the cheaper and forgiving a portion of them with certain stipulations because we just can’t afford it (or you simply think that it’s picking winners and losers) that is a fine argument to have – but please don’t be confused about the philosophical debate and you being on the side of good and them being on the side of evil… For goodness sakes, Republicans were the ones who originally proposed the idea of a mandate on health insurance in the 1990’s, and now it is the worst thing that has ever happened to them. Mitt Romney wrote an opinion editorial in 2009 suggesting that the country have this mandate, and now he is pretending that this never happened and that President Obama is a jerk for actually doing it. I only bring up Governor Romney to say that he is supposed to be the opposite, but history doesn’t seem to show that to be true. I don’t think it’s too difficult to make the connection that he is afraid of the same backlash that he has seen go after Obama (and these are the same people who he is hoping to get votes from). I actually think that Romney seems like a nice guy in the middle of a very tough fight. I disagree with him a lot, but I agree with him from time to time. If you really think that the other side from you is actually evil I beg that you would really try to approach them with an open heart and sympathize if at all possible as to why they have certain opinions.
I love debating people about their world views, and it doesn’t hurt my feelings because I do not lose respect for someone else because they are being honest with me about how they feel – if anything that makes me respect them more (even if I might think that they are being irrational). I’ve rambled on enough, I just want to challenge a lot of my conservative friends to open up your hearts and minds to what other people think/believe and why. If you feel like this does not apply to you then awesome, I’d love to talk to you about these things, but make sure that you aren’t so sure that you are open-minded that you are actually closed off to the idea that you aren’t completely open-minded. Ok I’m done, enjoy the article.
Obama vs. Reagan: A tale of two recoveries
NEW YORK (CNNMoney) — Faced with a strong jobs report Friday, Republicans tried out a new rhetorical message: This isn’t a disaster, but Ronald Reagan could have done better.
“It didn’t have to be this way,” said Rep. Cathy McMorris Rodgers of Washington. “There is a different approach that we could’ve taken. President Reagan took a very different approach.”
On the other side of the aisle, Democrats have been careful not to compare the recovery to anything like Reagan’s fabled “Morning in America.”
Alan Krueger, chairman of the White House’s Council of Economic Advisers, said that while the jobs report “provides further evidence that the economy is continuing to heal,” it is “important not to read too much into any one monthly report.”
So the parties are in agreement: The recovery of today is not like the recovery of 1983 and 1984.
And that’s true.
“The Reagan recovery had one of the fastest rates of growth we ever saw,” said Barry Bosworth, an economist at the Brookings Institution. “If anything it was too strong. It was spectacular.”
Just take a look at the numbers:
The economy grew at 4.5% in 1983, with a few quarters of growth north of 8%. In 2011, meanwhile, the economy grew just 1.7%.
In just one month — September 1983 — the economy added more than a million jobs. For the full year, the economy added almost 3.5 million jobs, a trend that continued into 1984, an election year in which Reagan captured 49 states in a landslide victory.
Obama can claim job growth of 1.8 million in 2011. A welcome comeback, but still tepid by comparison.
Looking ahead to 2012, Obama could replicate the 243,000 jobs created in January over each of the next 11 months and still not approach Reagan’s total for 1984 of 3.9 million.
Reagan had an advantage over Obama: The recession of the early 1980s was caused by runaway inflation, which the Federal Reserve countered by hiking interest rates. When inflation dropped, the Fed lowered rates and a massive economic boom resulted.
“The monetary policy run by [Fed chairman] Paul Volcker was extremely successful,” said Rudolph Penner, a former director of the Congressional Budget Office. “When inflation went away, that laid the groundwork for a very rapid recovery.”
The major causes of the recession that started in December 2007 were a banking crisis and housing bubble that exploded during President George W. Bush’s final months in office. Plus, interest rates were already low heading into the recession.
The damage to the economy was not easy to fix in the short-run, said Greg Valliere, chief political strategist at the Potomac Research Group.
“We nearly fell off a cliff, and people have short memories. I think the threat to the country was far greater in 2008 than in the early 80s, which was a garden variety recession.”
Another difference: With comparatively small debt loads, Reagan was able to push through a 23% across-the-board cut of individual income tax rates.
With revenue lower today, a tax cut of that magnitude is, according to Bosworth, something “we can’t really afford anymore.”
Obama entered the presidency with substantial budget deficitsand an economy contracting at a rate of 6.7%.
And both Bosworth and Penner agree that the stimulus package Obama did end up with could have been much better.
“The stimulus was poorly designed and didn’t get the bang for the buck we could have gotten,” Penner said.
Still, it is possible to draw comparisons between the two recoveries within the context of the election cycle.
Just consider the good news in Friday’s report: The unemployment rate dropped to 8.3%, the lowest it has been since February 2009, after peaking at 10% in October 2009.
Beyond that, the private sector added jobs for the 23rd straight month.
At this point in Reagan’s first term, the unemployment rate was 8%, down from a peak of 10.8%. He ultimately was elected when unemployment was 7.2%.
“The pattern here in 2012 looks a little like 1984 in that the economy is beginning to accelerate and the unemployment rate is starting to come down,” Valliere said. “I think we can get to a little under 8% by Election Day.”
Some political scientists say a more useful predictor of electoral success is the general trend and how Americans feel about the economy.
“You can start at quite a high level of unemployment,” Penner said. “But so long as things are improving around the election, that improves the incumbent’s chances considerably.”
But the White House has a long way to go to convince most Americans.
According to an NBC News/Wall Street Journal poll conducted late last month, only 45% of Americans approve of the way Obama is handling the economy, while 50% disapprove.
And a few stumbling blocks — the Eurozone debt crisis and domestic housing market — are still lurking.
“Obama’s had a couple of good months, but keep in mind this has happened a few times over the last couple years,” Bosworth said. “I think people are getting too excited.”